This book summary and review of Googled: The End of the World as We Know It was prepared by Allan Sjue while an Accounting student in the College of Business at Southeastern Louisiana University.
The world has been Googled. Users don’t search the internet, they “Google” it. More than 70 percent of all internet searches are done through Google and users get their personalized results in about half a second. A Google search uses a set of algorithms, known only by Google’s engineers, to rank results based on pages the user previously viewed, searches they’ve done, and results that other users have found useful. As Google’s chief economist, Hal Varian, says, “The internet makes information available. Google makes information accessible.”
Google’s mission is to make all information accessible to everyone, for free. Google is attempting to digitalize every book ever printed, allowing their content to be searched. Newspaper and magazine stories from anywhere in the world are just a Google search away. Google News aggregates over 25,000 news sites daily. Google’s YouTube, which boasts two-thirds of all web video traffic, allows users to upload and search for almost any video they want. Because the videos are user uploaded it is difficult to enforce copyrights and Google’s innocence, or possibly arrogance, towards dealing with copyrights is evident. The owner of copyrighted videos has to enforce it themselves by filing a complaint with YouTube each time they want a video taken down. There are inherent copyright issues with digitalizing every book every written as well. But Google continues to push the limits of copyright, changing the culture of the internet. They, like many users, believe that information should be free.
Google doesn’t just push the limits of copyrights; they’re an unconventional company that strives on finding a better way to do something. This constant innovation requires an excellent team of engineers that always ask, “Why?” Google only hires the best, with a focus on grades and education, and all applicants are interviewed by the founders themselves. Larry Page and Sergey Brin have created a culture at Google that encourages innovation. Employees are given massages, meals, haircuts, and medical attention, all for free. Engineers are required to devote 20% of their time to individual projects of their choosing. The “20% time” has lead to Google Maps, Google Earth, and Gmail, among others.
The Ten Things Managers Need to Know from Googled
1. Ken Auletta, the author, has written eight books and has written the “Annals of Communication” column for The New Yorker since 1992.
2. Larry Page and Sergey Brin are the founders of Google. They are engineers who met at Stanford University.
3. Google operated at a loss for its first three years before turning a profit.
4. Page and Brin were offered millions of dollars multiple times to sell Google before it was profitable. They refused to sell; believing their commitment to do right by the end user would eventually make them money.
5. Eric Schmidt was hired as Google’s CEO in 2001 and became a partner of Brin and Page. The “troika” made all the business decisions together and they’re now all billionaires.
6. Companies, especially in the search and media businesses, aren’t fond of Google because they claim that Google makes money off of other peoples’ content.
7. Google owns YouTube but has yet to turn a profit on it. YouTube was purchased for $1.65 billion.
8. Despite being visited by over 90 million unique viewers a month, YouTube has yet to turn a profit and has operated at a loss of at least $200 per year.
9. One of Google’s goals is to become the first media company with $100 billion in revenues. They had over $23 billion is 2009.
10. Googled is more of a history lesson on the company than a business novel.
Full Summary of Googled
Messing with the Magic
The novel begins by illustrating Google’s culture through a story from 2003, when Google was nearly five years old. Mel Karmazin, then the president of Viacom, was dressed in a suit and tie as he walks across the Google campus, passing employees in Google T-shirts working on their laptops. Karmazin is paranoid about competitors and two of his largest ones, AOL and Time Warner, had just merged, forming the largest media conglomerate in the world. Mel was looking for a new business partner.
When Mel Karmazin meets Page and Brin he finds them awkward, as most people do when the first meet the founders. They’re wearing T-shirts and jeans and their eyes are often fixed on the floor. Karmazin says that the “magic” of advertising is that advertisers have to spent money to advertise without knowing if it will increase sales. He boasts that he can coax advertisers into paying millions for advertising while the advertiser doesn’t know if the ad is effective. Page and Brin were appalled, the felt that he was cheating advertisers out of their money. They explained to Karmazin how Google’s cost per click method only charged advertisers when their ad was opened. They even provide advertisers with a tool for tracking the ad, GoogleAnalytics. It was ambition to answer the legendary line “I know half of my advertising works, I just don’t know which half.” Karmazin was equally appalled and ended the meeting by protesting, “You’re fucking with the magic!”
Larry Page and Sergey Brin see themselves as missionaries, aiming to organize information and make it accessible. Karmazin’s only mission is to make money.
Starting in a Garage
Page and Brin are engineers who met one another while they attended Stanford University. Larry Page grew up inventing things and had an ambition to change the world. As self-professed computer geeks, they began a project to index the whole web and find an efficient way to search it. Efficiency for the end user has always been the driving force for the Google search. As Page said, “You can replace the system. You can’t replace the user.”
They found four investors to each write them a check for $250,000. One of them was a computer science professor at Stanford who also introduced Page and Brin to the other three. For $1,700 a month the company rented a two-car garage and two downstairs spare rooms from a friend. Their new office space consisted of three tables, three chairs, an old washer and dryer, and a ping-pong table that they didn’t have room to open. The decks were old pine wood doors straddled across sawhorses. Despite still being in the beta testing, Google was getting 10,000 searches daily in 1998.
Buzz but few Dollars (1999-2000)
In early 1999 the company had very little money after the one million dollars from the initial investors. Google had indexed about 10% of the web and was now getting over half a million searches daily. But the growth brought more problems than it did dollars. They needed more computing power, much more. They relocated to a 5,000 square-foot office where they balanced more doors as tables.
By the end of the year 2000 the investors had begun complaining to Page and Brin to hire a CEO. They needed a “suit” to make sure all these engineers were trying to make money, not just change the world. The founders did not hire a CEO, had no professional managers, and there was still no plan to make money.
Prepping the Google Rocket (2001-2002)
Google was on its way to becoming the biggest search engine but was still making little money. The venture capitalists have been ruthlessly encouraging Page and Brin to hire a CEO to run the company. They had interviewed a few with no real intent to hire any of them because the founders didn’t want a “suit” to come in and change the company’s focus. One of the venture capitalists persuaded Eric Schmidt, then CEO of Novell, to speak with the founders. Schmidt has a Ph.D. in computer science and speaks the language of engineers; Page and Brin had found themselves a partner. The troika wanted to devise a cohesive mission statement and come up with ‘Don’t be evil.’
Under the lead of a CEO they trusted, Google started advertising, in their own way. They refused to allow ads to clutter their home page or allow advertisers to ‘bribe’ their way to the top of search results; instead they sold a small space to the right of search results through a program called AdWords. The ads would come up when they were associated with the user’s search and the advertiser would be charged per thousand people that saw the ad (would later be changed to charged per click on the ad). Google would then come up with its second money gusher, AdSense. Users would see ads as they typed emails when they typed a word that was selected by advertisers. As with AdWords, advertisers would only be charged when their ad was clicked. For the first time in 2001, Google turned a profit of $7 million.
Innocence or Arrogance? (2002-2003)
In May of 2002 Google was doing 150 million searches daily but wanted to do more. It secured a risky deal with AOL to provide their searches and give AOL 85 cents of each dollar it collected. As it turned out, the deal would provide a huge revenue boost for both Google and AOL. With the expanded revenues, Google began expanding. It launched Gmail, which featured enough storage space so that no user would have to delete emails, ever. As such, there was no delete button but one would later be added as users feared for their privacy. Larry Page built a book scanner, which he planned on using to digitalize every book ever printed. Naturally, they did not bother to consult with publishers or authors about copyrights and later would encounter a lawsuit. Google News was launched and newspaper companies felt that Google was stealing their content.
Business people couldn’t agree on whether Google was an innocent company run by two young engineers or an arrogant company, pushing the laws of copyright to its limit. But one thing that was for sure was that Google was growing fast. By the end of 2003, Google was soaring above other search engines. The word Google had become a verb; “I’ll Google it.” Despite its growth, old media companies didn’t yet realize the threat Google posed to them, but they were about to.
Google Goes Public (2004)
To continue their growth, Google needed more investment capital and decided it had to go public. The founders refused to go about going public the usual way and instead created their own solution to what they saw as the science problem of going public. Instead of allowing bankers to set a floor price and distribute shares, the founders set their own price and allowed anyone to bid online for a minimum of 5 shares. They only paid 3% to Wall Street underwriters instead of the usual 7% and they would implement dual class stock so that the core values of the company would be maintained. When they finally released their financial statements, reporters couldn’t believe the story that they had missed. This once-small company was making millions and growing at an alarming rate; everyone wanted “to get the Google story.”
The New Evil Empire? (2004-2005)
Now in the public eye, the business world and media looked at Google as the next Microsoft but users felt differently. Lawsuits about Google digitalizing books began to spring up, thus Google couldn’t allow free public access to all books. However, they were allowed to show “snippets” under the laws of copyright. A “snippet” was not defined as to how long it can be by law, so Google pushed the limit on that as well. Google’s advertising revenues were soaring while traditional media sources like cable networks, radio, and magazines/newspapers were in decline. Those in traditional media had distain for Google because they had changed the “magic” of traditional advertising, resulting in old media losing money.
While becoming unpopular in the business world, none of these dealings changed the consumers’ view. But what happened in China did. The Chinese government wanted to control its citizens’ searches. It threatened to outlaw Google if the company did not comply and for the first time, Google agreed to censor and manipulate its searches. Executives had to make the tough choice between denying Chinese citizens some searches or all searches.
Chasing the Fox (2005-2006)
In October of 2006 Google shocked the media world when it purchased YouTube for $1.65 billion. By acquiring YouTube, Google was admitting that GoogleVideo was a flop. This was the first time Google would admit to something failing, although they didn’t do it directly. Though it made no money, Google believe that if they could find a way to effectively sell advertising on YouTube that it would be like the birth of the CBS network in 1927. TV networks didn’t want to follow in the steps of the music business and ignore the online threat. Fox and NBC invested Joost.com, later renamed Hulu to attempt to combat YouTube. CBS however, worked with YouTube, licensing content to the video site.
War on Multiple Fronts (2007)
Copyright issues are no stranger to Google, and Viacom’s Sumner Redstone went to war with YouTube. He demanded that YouTube remove over 100,000 copyrighted clips and he felt that Google was lackadaisical about copyright. He was frustrated that YouTube could successfully block spam but not block Viacom’s copyrighted content. Google says they’ll remove any clips that Viacom requests they take down, but felt it was the job of the copyright owner to monitor their material. This cost Viacom money and time to employ a staff devoted to protecting their content, and outraged Redstone.
Google had begun to worry that Facebook would become the next “walled garden” such as AOL, stealing away searches from their engine. But while keeping an eye on Facebook, they purchased DoubleClick for $3.1 billion dollars, causing outrage from media companies. DoubleClick is an ad platform that targets users and provided rich data-mining possibilities; Google outbid Microsoft and Yahoo to purchase it. With DoubleClick, Google would need no middleman and could become the backbone of advertising online.
Waking the Government Bear
There was fear that the Google/DoubleClick merger would provide Google with a monopoly on online advertising. DoubleClick would allow Google to track users, what they searched for, what they liked, and what they clicked on. This would allow Google to target ads at people that would be more likely to click the ad. Despite lobbyists urging the FTC to reject the merger, it was approved and the Bush administration let the free market play out.
With this incredible power that Google posses, maintaining trust with their users became even more essential. In 2006 the U.S. government subpoenaed internet companies to turn over child pornography searches. Google took the government to court and won, instead just turned over 50,000 suspicious URL addresses. Google’s competitors however, turned over their user’s searches. Protecting its users isn’t the only reason people trust Google; they also sacrifice revenues by not allowing intrusive ads or junk mail.
Google Enters Adolescence (2007-2008)
Google has often been criticized for being a “one trick pony”, they only know how to do search and sell advertising off those searches. Google begins making more efforts to make YouTube profitable, even looking into providing some original content to make it more desirable to advertisers. Google was frustrated with many of its function’s capabilities on mobile phones and so they also begin working on an operating system for phones, called Android. The goal is to get all of Google’s products working smoothly and increase mobile phone searching.
Is “Old” Media Drowning? (2008)
The “old” media is struggling to keep up with Google and the internet movement. Placing an ad online costs between 5 to 10 percent of the cost of placing the same ad in a newspaper and would be seen by more people. The book market is in slightly better shape but, when adjusted for inflation, sales are down dramatically. The future is also unsure as the industry is losing young readers; nearly half of Americans between the ages 18-24 read no books per year, and the percentage of 18-44 year olds is decreasing. Radio, with the notable exception of sports and talk radio, is struggling greatly. More and more users are getting their music online, whether through paying iTunes, listening for free on YouTube, or illegally downloading.
Compete or Collaborate?
Google wasn’t done with the courtrooms yet. Old media was sticking out their chests as Viacom filed a lawsuit against YouTube for copyright infringement. While Fox and NBC didn’t join in the lawsuit, they were fearful of YouTube cannibalizing their audience and finally launched Hulu in an attempt to convince internet video viewers to continue to watch their content.
Microsoft, like Viacom, treated Google as an enemy. They made an offer to buy Yahoo for a whopping $44.6 billion dollars, 62% more than Yahoo’s stock price at the time. The two companies traded back and forth with indecision as to whether Yahoo actually wanted to sell and if Microsoft actually wanted to buy. While the two companies were indecisive, Google was increasing its market share. Venture capitalist Roger McNamee observed, “The two biggest forces competing against Google have banged heads and knocked themselves unconscious.”
Happy Birthday (2008-2009)
September of 2008 marked Google’s 10th birthday, making the company ancient in internet years. But this didn’t slow the company down. Google already offered such services as Gmail, Google Earth, Google Maps, Google Scholar, Google Finance, Google Product Search, Google Calendar, Google Desktop, and Google Docs. Google created its own web browser to host all of these applications, Chrome. Because Google is not in the packaged software business, these applications live through the Chrome browser and are intended to run more smoothly than with other browsers.
Google’s next big thing was the release of the Android operating system project that they had been working on. While not an immediate cash cow, the operating system gives Google some leverage over phone companies and gives them a new platform for the other services, as well as a platform to help move into the mobile phone industry.
Google is a wave maker. They knew they had the ability to do search better than anyone, and were unwavering on their determination to server users. It’s too early to tell if companies like Facebook, YouTube, Twitter, or Wikipedia will have lasting impact of if they’ll begin fading out like MySpace. The planet however, has been Googled. Larry Page says Google has become “part of people’s lives, like brushing their teeth.”
Where is the Wave Taking Old Media?
Barry Diller, CEO of IAC, claims that, “The world is moving towards direct selling – no middleman, no store.” Couldn’t it be said that Google itself is a middleman, bringing together users with information, web sites, and advertisers? Could original content be successful on YouTube, thus making it more attractive to advertisers than television?
The foreseeable future for some old media is bleak. Book publishers are losing young readers and the young people that do read are moving to digitalized books. The internet has a culture that everything should be free, and Google only enhances that. As digitalized books become more popular, they’ll become more pirated as well. Newspapers are losing readers in chunks but are gaining online readers. The newspaper industry’s disdain for Google is somewhat baffling however. Google is essentially giving them free advertising every time their columns come up in a Google search, increasing page views and time spent on the page, thus increasing the amount they can charge from online advertisers.
Where is the Wave Taking Google?
Larry Page once told a Stanford class, “If you can solve search, that means you can answer any question. Which means you can do basically anything.” Everything Google does extends the company’s reach. Google likes to claim that they don’t compete with old media and instead refers to old media companies as partners. But as an innovative company run by engineers, working with content providers could easily teach the Google engineers of inefficiencies in the industry. That could lead to Google to solve problems and become a competitor to companies that it claims to be partners with.
Google appears to be in a great position for the future. The company is making billions, is loved and trusted by the vast majority of users, and they’re run by engineers who believe in the Google way and are given the freedom to create. But there will always be threats and few companies maintain dominance. At one point the Big Three auto companies seemed impregnable, the three main television networks were perfect, and AT&T, IBM, and AOL were untouchable. And who thought that Apple and IBM would ever rebound from their serious missteps? No company is guaranteed to be dominant forever, and Google is no exception, but for the foreseeable future Google appears to be in fantastic market position.
Image via Wikipedia
The Video Lounge
This clip is of Google’s author, Ken Auletta, talking about newspapers attempting to block online search engines from distributing their stories for free. However, if they were to put firewalls and online subscriptions in place, as the newspapers are considering, they would drive customers away to competitors, increasing their competitors’ ad revenue.
Why I think:
· The author is one of the most brilliant people around…or is full of $%&#, because:
Ken Auletta is good writer who goes very in depth about Google’s history and the people who played a part in it. There great information on the founders’ lives in college, Google’s resistance to give in to advertisers during its early years, how they went public, and how they became the powerful, borderline monopoly they are today. However, with the exception of explaining some management policies in order to illustrate the Google culture, the book gives little information on how Google is actually run.
· If I were the author of the book, I would have done these three things differently:
1. Focus less on some of the people in the book. Some people in Google’s history, such as founders Sergey Brin and Larry Page, deserve many pages devoted to them and their past. However, Auletta devotes too much space to the lives of less significant people in Google’s history.
2. Add more information about how Google is being run from a management perspective.
3. The author seemed to take some shots at the old media. While they made mistakes in assessing the internet’s affect on media, in describing it Ken almost seemed to have some disdain for networks and newspapers.
· Reading this book made me think differently about the topic in these ways:
1. The company behind the blank white screen with the friendly, colored word Google and search box is a very powerful company.
2. Google’s founders aren’t afraid of spreading themselves too thin, and it seems to be working for them. They make so much money off their search engine that they have the ability to throw money at projects to find the next cash cow that comes out of its “20% time” policy.
3. Prior to reading the book I didn’t think about why Google was so much more successful than Yahoo. Yahoo isn’t really a search company, it’s a portal designed to keep users on its pages. Google is a true search company devoted to engineering a perfect search.
· I’ll apply what I’ve learned in this book in my career by:
1. If you do something better than everyone else, stick to it. The money may not come right away but keep doing what you do best and the money will come.
2. Don’t just go with traditional way of doing things. Keep searching for improvements and keep asking, “Why?”
3. Treat your employees well and provide them with good benefits and you’ll be rewarded with loyal, hard-working employees.
· Here is a sampling of what others have said about the book and its author:
“In “Googled,” Mr. Auletta has not only amplified such earlier portraits through new interviews with the company’s principals, but he’s also drawn on his own experience writing the “Annals of Communications” column for The New Yorker magazine to situate Google’s rise and global expansion in context with the digital revolution and the crisis that traditional media faces as old sources of revenue dry up and people increasingly turn to the Internet as a provider of news, movies, music and video.
Already, Mr. Auletta writes, much of “the planet has been Googled, with the company becoming, as Larry Page has said, ‘part of people’s lives, like brushing their teeth.’ ” Mr. Auletta writes that Google has “transformed how we gather and use information, given us the equivalent of a personal digital assistant, made government and business and other institutions more transparent, helped people connect, served as a model service provider and employer, made the complex simple, and become an exemplar of the oft-stated but rarely followed maxim, ‘Trust your customer.’ ”
Google has become such a household term that its name has morphed into a verb. “Its index contained one trillion Web pages in 2008,” Mr. Auletta writes, “and according to Brin, every four hours Google indexed the equivalent of the entire Library of Congress.” Having acquired YouTube, the largest user-generated video Web site, in 2006, and DoubleClick, the foremost digital marketing company, in 2007, he goes on, Google boasted 40 percent of both the $23 billion spent to advertise online in the United States and the $54 billion worldwide online advertising. He adds that the company conducts some three billion searches a day, stores two dozen or so petabits (about 24 quadrillion bits) of data and plans to digitize more than 20 million books.” – The New York Times
Most of the reviews of Googled have been good. They cite that Ken Auletta has told more of Google’s story than previous novels based on the company. I found the book to be great, with the exception of too much focus on some less significant individuals in the company’s history. Overall, it’s a good book with a very detailed story of Google’s history.
1.) Auletta, K. (2009). Googled: The End of the World as We Know It. New York: Penguin Press.
2.) Kakutani, M. (2009, December 7). Still Counting the Ways to Infiltrate Daily Lives. The New York Times. Retrieved from http://www.nytimes.com/2009/12/08/books/08book.html?_r=2&ref=books.
Contact Info: To contact the author of this “Summary and Review of Googled,” please email Allan.Sjue@selu.edu.
David C. Wyld (email@example.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of works he has helped his students to turn into editorially-reviewed publications at the following sites:
· Management Concepts (http://toptenmanagement.blogspot.com/)
· Book Reviews (http://wyld-about-books.blogspot.com/) and
· Travel and International Foods (http://wyld-about-food.blogspot.com/).