The headline of this blog is also the name of an excellent book by Ken Auletta (The Penguin Press, NY 2009) that explains the meteoric rise of Google, the search engine that has conquered the world and completely changed our lives.
Today, we’re living in a world far different from 21 years ago. In 1991, there was no World Wide Web, no DVDs, no digital cameras, no iPads and no blogs.
Now, jump ahead to May 2009 when Nielsen reported that 230 million Americans had Internet access, 93% had high-speed (broadband) and digital cable service and 228 million used a mobile phone.
What sets this era apart from others is velocity. It took telephones 71 years to penetrate 50% of American homes, electricity 52 years and TV 30 years. By comparison, the Internet reached more than 50% of Americans in just 10 years.
Who created Google?
The brilliant minds behind Google are Larry Page and Sergey Brin who met at Stanford when they were pursuing PhD degrees in computer science. They had much in common. Their fathers were college professors, both attended Montessori elementary schools, where they were granted freedom to study what they wished and, as public high school students, they were intrigued by computers.
How did they do it?
The sole aim of Page and Brin was to build an efficient search engine. Their breakthrough came through the creation of an algorithm (defined in the dictionary as “a step-by-step procedure for solving a mathematical problem — by a computer”). Their algorithm, called PageRank after Larry, managed to take into account the number of links into a particular site, plus the number of links into each of the linking sites.
Instead of relying only on keywords, as earlier search engines had, PageRank did a link analysis, counting the sites that were most frequently visited by users and jumping them to the top of the search results.
How could they make money?
Initially, Google was simply a technology company that forfeited advertising revenue by refusing to allow advertisers (as competitors like GoTo did) to pay to get their products ranked higher in search results.
Realizing that they had to build a sales force to secure revenue, and ultimately creating a successful advertising formula meant that Google finally turned a profit on $7 million in 2001. The next year, Google’s profits rocketed to $100 million.
How did they spend it?
In 2003, Google’s investment in computers, servers and data centers was $200 million and was soon to climb to $3 billion annually. This level of computing power is not needed for text searches — rather, it is required for mobile phones and applications, and for cloud computing.
Google has dozens of data centers all over the world (the exact number is a state secret), and within these data centers are housed what may be the world’s most massive computer system, millions of PCs that have no keyboards or screens are arranged in stacks and have been repurposed as servers to process searches.
By spreading these data centers all over the world, Google became more efficient. Or, as a Google software engineer says, “It takes a couple of milliseconds to go between a data center on the East coast and one on the West coast or in Europe.”
(Continued: Part 2 will appear on July 5.)