Googled: The End of the World as We Know It

CHAPTER TWO. Starting in a Garage

In early 1998, Bill Gates couldn’t envision what was to come. Microsoft was at the apex of its power, with revenues that would reach $14.5 billion by year’s end, with ever-rising profits, a soaring stock valuation, more than twenty-seven thousand employees, and a market share of computer operating systems that encompassed more than 90 percent of all desk and laptop PCs. The government had not yet sued it for monopolistic practices, or convinced two federal courts that Bill Gates’s company was guilty. At the time, Microsoft was so flush that it had flirted with investing in Hollywood, having already dispatched its chief technology officer and dealmaker, Nathan P. Myhrvold, to spend an anthropological week with DreamWorks cofounder Jeffrey Katzenberg.

It was in that confident time that I visited Gates in his office on the sprawling Microsoft campus in Redmond, Washington, in 1998. In the course of our interview, I asked him to describe his competitive nightmare: “What challenge do you most fear?” He rocked gently back and forth, sipping from a can of Diet Coke, and silently pondered the question. When he finally spoke he did not recite the usual litany of prominent foes: Netscape, Sun Microsystems, Oracle, Apple. Nor did he cite the federal government. Instead, he said, “I fear someone in a garage who is devising something completely new.” He had no idea where the garage might be-or even what country it might be in-nor could he guess the nature of the new technology. He just knew that innovation was usually the enemy of established companies.

As it happens, in 1998, in a Silicon Valley garage, Bill Gates’s nightmare came alive courtesy of Larry Page and Sergey Brin. Page and Brin had met three years before, at orientation for incoming Stanford graduate students. They had much in common. Their fathers were college professors and their mothers worked in science; both were born in 1973 and raised in homes where issues were rigorously debated; both attended Montessori elementary schools, where they were granted freedom to study what they wished, and as public high school students they were besotted by computers; both were pursuing Ph.D.’s in computer science. They shared what John Battelle described as “a reflexive belief that whatever the status quo is, it’s wrong and there must be a better solution”; both, as Mark Malseed observed, had a “penchant for pushing boundaries-without asking for permission…”

SERGEY MIKHAILOVICH BRIN’S PATH to Stanford started in Moscow, where he was born into a family steeped in science. His grandfather was a math professor; his great-grandmother had left the Soviet Union to study microbiology at the University of Chicago; his parents, Michael and Eugenia, were mathematicians. There were obstacles to their pursuit of science, though. Despite Michael’s Ph.D., anti-Semitism impeded his career: at Moscow State University he was not permitted to study his preferred subject, astrophysics, because it fell into the same department as nuclear research, and Jews were deemed too untrustworthy to enter that field. Eugenia Brin, a civil engineer, was more welcome in the renowned research lab of the Soviet Oil and Gas Institute, but she, too, felt constraints. “We were quite poor,” recalled Sergey, describing a three-hundred- to four-hundred-square-foot Moscow flat he shared with his parents and his grandmother, an English teacher. “My parents, both of them, went through periods of hardship. My life, in comparison, has been easy.”

In 1977, Michael Brin attended an international conference in Europe, and when he returned home he insisted that the family must apply for visas to escape the USSR. When he submitted an application the following year, though, he was abruptly fired. Warned of retribution, Eugenia quit her job. They eked out a life doing temporary work, schooling four-year-old Sergey at home. It wasn’t until two years later that their exit visas were granted. With assistance from the Hebrew Immigrant Aid Society, they immigrated to America, leaving most of their possessions behind.

They rented a cinder-block house in a multiracial, working-class suburb of Baltimore, near the University of Maryland. As in Moscow, they were poor, relying on the support of local Russian Jews. “My parents sort of lived in the dining room,” Sergey remembers. “There was no wall between the dining room and the kitchen. They used that as their bedroom.” Eventually, Michael became a professor of mathematics at the University of Maryland, where he specializes in Riemannian geometry; Eugenia Brin became a scientist at NASA’s Goddard Space Flight Center. They had a second son, Sam, fourteen years Sergey’s junior.

Sergey enrolled in the local Montessori school where classes were comprised of students in a three-year age range. Typical of Montessori programs, the school adapted itself to the child. “It’s not like somebody is telling you what to do,” Sergey said. “You have to plot your own path.” Because he initially spoke little English, he retreated into math puzzles, science projects, and maps. For his ninth birthday, his parents gave Sergey a Commodore 64 computer, a seminal gift for a man who now gleefully describes himself as a nerd. Some years later, when a friend got an early Macintosh computer, they began to devise artificial intelligence programs and software to simulate gravity.

Sergey’s prowess at math was encouraged by his father, a stern tutor, who sometimes graded student papers with the salutation “My sincere condolences.” Family meals featured intense discussions. Sergey was not much interested in listening to music or watching TV Nor was he an avid reader of books, though he was engrossed by the life of Richard P. Feynman, a winner of the Nobel Prize in Physics who “not only made big contributions in his field,” Sergey once said, but wanted to be “a Leonardo, an artist” as well as a scientist. “I found that pretty inspiring.” Although he says he “probably had more nerdy interests than most of my peers,” his heroes-Feynman at a young age, Steve Jobs and Warren Buffett later-suggest the breadth of his ambition.

He was also a rebellious child. When he was thirteen, his parents took him to visit the Soviet Union and he threw pebbles at Soviet policemen, causing a scene that his parents defused only by pledging to the irate authorities that he would be severely punished at home. Sergey is still very emotional about autocratic governments and anti-Semitism. But even though he was raised as a Jew and attended Hebrew school for a few years, he was nonpracticing, did not have a bar mitzvah, and was put off by traditional Jewish celebrations, which he once told an Israeli reporter he “associated with getting lots of gifts and money, and I was never comfortable with that.” When he was married on an island in the Bahamas in May of 2007 to Anne Wojcicki, cofounder of 23andMe, a genetics research company, the couple stood in bathing suits under a chuppah, the traditional Jewish wedding canopy, but no rabbi officiated.

Then, as now, he was uncomfortable with introspection. Asked by the same Israeli reporter if it was a coincidence that his wife was Jewish, he said, “I believe there are lots of nice non-Jewish girls out there. My wife is, I guess, half Jewish.”

So was it a coincidence, the reporter pressed, that his wife was half Jewish?

“That wasn’t a concern for me,” he responded. “I don’t know, maybe it was for her.”

I once asked him, “What part of your success do you trace to qualities in your parents?”

“It’s hard to say,” he answered.

After much coaxing, he added, “A certain love for science and learning and the beautiful mathematical things I have been able to put into practice is part of my upbringing.”

He attended Eleanor Roosevelt High School in Baltimore, a public school where muscles counted more than brains. This setting didn’t diminish Sergey’s cocky swagger, though, and he blitzed through in three years, gathering enough college credits there to allow him to also graduate from the University of Maryland in three years. Although he was just nineteen, Sergey flourished at college, where he was a math and computer science major and was treated by the faculty as a peer. “I was a pretty advanced student,” he said.

After graduation, he received a National Science Foundation scholarship to study computer science at Stanford, where he believed he was “better prepared” than classmates. His special interest, data mining, was a relatively new field in which computers are used to extract and analyze information from enormous fields of data. He expected to get a Ph.D. and maybe become a professor. As at Montessori, he worked at his own pace. His father once told authors David Vise and Mark Malseed for their book, The Google Story, “I asked him if he was taking any advanced courses one semester. He said, ‘Yes, advanced swimming.’” Craig Silverstein, a fellow data-mining student who would become Google’s first employee, remembers that Sergey rarely studied, yet “he passed all his tests in the first year, and didn’t take any in the second year. Already he had this reputation as a kind of genius.” Brin recalled taking eight comprehensive tests: “When I first tried, I passed all seven. The one I thought I was best at, I didn’t pass. I went to the prof and debated the answers. I wound up talking him into it. So I passed all eight. I think I was the only one.”

Brin was athletic but uninterested in team sports; he lost himself instead in gymnastics, swimming, Rollerblading, and biking. Still, Brin was more outgoing than many self-described geeks and enjoyed playing practical jokes. He also took on extra projects that aroused his interest; a typical project was the numbering system for the rooms in the Computer Science Building (donated by Bill Gates, who would become a nemesis). In the building, each room was identified with a four-digit code, which Brin felt did not convey the most useful information to the building’s tenants. “We were offended at having four-digit numbers when you don’t have ten thousand rooms,” he said. Along with computer science professor Vaughan Pratt, he set out to devise a better system, one that would enable someone leaving a given room to calculate the distance to his destination. “We came up with a sensible three-digit numbering system. It was quite elegant. Most buildings are numbered in a really stupid way. The architect or somebody sits down with the blueprint and they collate across and they number things. It looks great to them when they are looking at the blueprint. When you’re actually walking around, it makes no sense at all. The Gates building is fairly simple. I just had the numbers roll around the building. Even numbers were exterior, odd numbers were interior… The second digit told you how far around the building you had to go. It was very intuitive, if I may say so myself.”

THE SERGEY BRIN WHO was obsessed with efficiency would find a soul mate in Larry Page. Larry was born in Lansing, Michigan, where his father, Dr. Carl Victor Page, was a professor of computer science and artificial intelligence at Michigan State. His mother, Gloria Page, had a master’s degree in computer science; she taught at the university before becoming a database consultant. With Larry and his older brother, Carl, the Pages lived comfortably in a middle-class neighborhood. By age seven, Larry was proficient on the Exidy Sorcerer computer his dad had brought home, and this ignited his interest in technology, as did the technical magazines and electrical engineering assignments his father also brought home, and his brother Carl’s skill at taking things apart. Larry’s family, like Sergey‘s, welcomed argumentative challenges. The Pages were readers, and Larry fondly remembers vacations to Oregon when they’d take an empty suitcase to fill it with books from the renowned Powell’s Books, in Portland. Unlike Sergey, however, he was conspicuously quiet, and had a bad case of acne. He was a loner, someone who as an adult friends would describe as shy and strangers would describe as asocial. He chose not to follow his mother’s faith, Judaism, but like his father chose not to embrace a religion. Perhaps this was but one reflection of an unsettled home; his parents divorced when he was eight, and his father married a colleague at Michigan State. Carl, nine years older, left home after high school to get a computer science degree. He later was a founder of eGroups.com, an Internet company sold to Yahoo in 2000 for about four hundred million dollars.

Just as Sergey was fascinated by Richard Feynman, Larry was inspired at age twelve by a biography of Nikola Tesla, whose pioneering work led to the development of electricity, power grids, X-rays, and wireless communication. Tesla was an extraordinary but unsung scientist, an Edison without the fame or wealth and who, despite his discoveries, died bitter and destitute. Page told me he learned from Tesla that “you can invent the world’s greatest things, but if you just invent them it doesn’t accomplish that much… I found it very sad. You can imagine if he were slightly more skilled in business, or with people, he’d have gotten a lot more done.” Brilliant ideas alone would not suffice. Timing and follow-through, and raising resources, really mattered.

“I realized I wanted to invent things, but I also wanted to change the world,” Page once said. He became convinced that in order to effect scientific change he needed to start a business. Inventing things, he once said, “wasn’t any good; you really had to get them out into the world and have people use them to have any effect. So probably from when I was 12, I knew I was going to start a company eventually.” When he thought about the kind of company he wanted, Larry told me, he thought of his grandfather, an assembly-line worker in the Chevrolet plant in Flint, Michigan, who during sit-down strikes fearfully carried a heavy iron pipe wrapped in leather as protection from what he described as strike-breaking “goons.” Happy employees, Larry came to believe, are more productive.

The rival for Larry’s attention was music. He had begun playing the saxophone as a child, and he played with considerable skill. After finishing his first year at East Lansing High School, Larry was among the talented musicians chosen to attend summer sessions at the prestigious Interlochen Arts Academy in Northern Michigan. But the lure of engineering soon triumphed over music. Like his father, mother, and brother, Larry enrolled at the University of Michigan. He didn’t have much choice. “My dad actually said to me when I was deciding what school to go to, ‘We’ll pay for any school you want to go to-as long as it’s Michigan,”’ he once said.

With his short dark hair and stark black eyebrows and 5 o‘clock shadow, he looked like Italian tenor Andrea Bocelli, but his high-pitched voice made him sound like Kermit the Frog. He remained an introvert while studying engineering at the university. Nevertheless, he imagined that one day he might start a company, and insisted on taking business courses. He also stood out; a brilliant student, he served as president of Eta Kappa Nu, a national honor society for electrical and computer engineering students. Preoccupied with finding more efficient ways to do things, he led a still nascent effort to build a monorail that would replace forty buses to connect the North and the Central Campus. He attended a leadership training program at the university, where he encountered a slogan he would often repeat as an adult: “Have a healthy disregard for the impossible.”

For his graduate studies, he had his heart set on Stanford, a university where even the names of the buildings attest to the men whose careers were spawned there: William R. Hewlett, David Packard, Jerry Yang, James Clark. Yet for all of his ambition and achievements, he feared he was not up to the task. “I kept complaining to my friends that I was going to get sent home on the bus,” he once told Michigan ’s alumni magazine. “It didn’t quite happen that way.”

THE STANFORD CAMPUS, designed by Frederick Law Olmstead, is spread over eight thousand acres. Like the Google campus that Page and Brin would one day build, Stanford offers free bus service, plentiful food, a bucolic setting, and shared spaces where students can collaborate. By the time Larry arrived in 1995, Sergey had been there two years; he was on the orientation team that welcomed Larry to campus. Sergey, as was his wont, immediately began needling Larry with questions. “We argued a lot,” recalled Brin, mostly about local zoning and city planning. The field didn’t particularly interest Brin, but arguing did. “We ended up talking a lot.” The other students were content to tour San Francisco; Larry and Sergey were curious about other things. Even today, their idea of a relaxing time is to attend the annual Consumer Electronics Show and ask questions about the cool new technologies on display, or quiz astronauts about space flight.

Larry found an academic mentor in Terry A. Winograd, a computer science professor who had won a National Science Foundation grant to explore the future of online information. Larry bolted upright one night from a dream, he said many years later when describing how he suddenly had a vision for search. “I was thinking: What if we could download the whole Web, and just keep the links… I grabbed a pen and started writing!” He told Professor Winograd, “It would take a couple of weeks to download the Web.” Winograd nodded, he said, “fully aware it would take much longer but wise enough to not tell me.” Larry downloaded the entire link structure of the Web, not quite knowing what he’d do with it. He realized that links weren’t organic; they were the result of conscious effort. In a sense, users were voting for the best links when they chose to visit a site, or when they included a link on their own site. He had a bold idea to craft a different kind of search engine that would use these links to catalogue not just an island of the Web but the entire ocean.

His new friend Sergey was intrigued. He had been working with computer science professor Rajeev Motwani on data mining for the Web, still a nascent field in which one had to collect links, print them out, and study the printout to derive answers. The audacity of Larry’s effort appealed to him. The math problems-how to count not just the original page links but the links affixed to the links-were the kind of challenge he tackled with gusto. “It was,” Brin said, understatedly, “an interesting source of data.” Sergey signed on, and the two became inseparable; when speaking of them, colleagues began to roll their names together, LarryandSergey.

The two were working at the dawn of the digital age. In 1993, two years before Brin and Page met, a mere fifteen million people in fifty countries used the Internet, and there were just over one hundred Web sites. The Mosaic browser had just been introduced, and Linus Torvalds empowered a community of software hackers to produce the open-source operating system called Linux. But the digital world was moving at breakneck speed, with the Internet doubling in size every year. In 1995, just two years later, Yahoo was born, and its major online competitor, AOL, had nearly five million subscribers; the Mosaic browser had been renamed Netscape Navigator the prior year, and did for the Internet what Lewis and Clark did to open the West.

Mighty Microsoft was late to spot the menace Netscape and the Internet posed to its packaged software business. Microsoft’s misreading of the Internet threat is conveyed in a sixteen-page November 15, 1994, memo to Bill Gates from Myhrvold deriding the “hype” surrounding the Internet, and asserting-just as dismissively as Sumner Redstone was that same year in his speech to the National Press Club-that it was just a distribution platform dominated by “hobbyists.” Although Myhrvold presciently warned of the advent of a Web browser, Microsoft was slow to comprehend the impact of the Netscape browser, which liberated consumers from behind the walls AOL and other portals erected, allowing them to surf the Web. When Microsoft finally reacted, it was not tentative. Bill Gates galvanized his troops with a May 1995 memo, “The Internet Tidal Wave,” warning of this disruptive technology.

The year 1995 was also when a Morgan Stanley analyst named Mary Meeker teamed up with a fellow analyst, Chris DePuy, to author The Internet Report, a thick volume that heralded a brave new world. “In this report,” they wrote on page one, “we attempt to describe what may be one of the hottest new markets to develop in years-the growth of PC-based communications and the Internet.” They said the “market for Internet-related products and services appears to be growing” faster than such early media start-ups as printing, telephones, movies, radio, recorded music, television. With a multiplying base of about 150 million PC users, they predicted e-mail “should become pervasive,” and the Internet would serve as “an information distribution vehicle” for companies, slashing costs, birthing new competitors-“the next Microsofts, Ciscos, Oracles, and Compaqs…”

The report was viral. The press heralded it. Companies downloaded more than a hundred thousand copies from Morgan Stanley’s Web site. HarperCollins published it as a book. Within days, Meeker received an e-mail from someone who lived at Three Lighthouse Road in New Zealand -to thank her. “He had a dial-up Web connection and he was able to connect to me from a remote location,” she recalled. “This was the power of the Internet. That was a magical moment, for it represented what the report was about.” Barron’s would dub Meeker “Queen of the Internet.” Wireless communications were exploding, and that year Americans spent twenty-two billion dollars on wireless services, as telephone companies and others vied to buy spectrum space that would speed the digital revolution.

Also that year, Nathan Myhrvold wrote a memo to Bill Gates in which he drew a distinction between incremental changes (like CD-ROMs or computers that double in speed every year) and “revolutionary” sea changes. He predicted computers that would be connected to networks, opening markets for e-commerce, information services, and video on demand; a “shift from a products business to a service business” that will allow services to be downloaded rather than sold in packages, opening the possibility that software companies like Microsoft would be able to charge per transaction; and new multimedia platforms that would permit the transmission of CD- quality audio and crisp video pictures. He also predicted there would be a radical change as we “move to an intelligent operating system,” an intelligent agent or navigator that would free consumers to locate what they want on their PC or the Web.

It was at places like Stanford and in classes like Terry Winograd’s that these systems might be designed. To tug his computer science students down from their theoretical heights and ground them in a sense of “how things work and an understanding of the user,” Winograd assigned them to read Donald A. Norman’s The Design of Everyday Things. The thesis of Norman ’s book is that those who design things-from video recorders to computers to impossible-to-open plastic packages-typically don’t design from the vantage point of consumers. Thus they make products that are overly complicated and confusing. This, he wrote, is “the paradox of technology: added functionality generally comes along at the price of added complexity.”

This idea became an obsession of Larry’s. Years later, he called it a “seminal” book, and remembered being amazed when he first read it “that people are so focused on outside things and are not focused on the functionality of things.” (It still drives him mad to stay in a hotel and not be able to figure out how to turn the lights off “in less than three minutes.”) The book, he said, strengthened the attitude he brought to designing the Google search engine, which was the opposite approach from existing search engines like Alta Vista. If you did a search for university on Alta Vista, it heaved at you every text that contained the word university, without ranking value or assessing whether people were actually using the links. Doing the same search, Google relied on the collective intelligence of its users and returned with the top ten universities. Thinking that “your customer or users are always right, and your goal is to build systems that work for them in a natural way, is a good attitude to have,” Page said. “You can replace the system. You can’t replace the user.”

Page and Brin wanted to build an efficient search engine, one that didn’t waste users’ time. Efficient use of time was paramount for them. Neither Page nor Brin eagerly read novels or went to many movies or concerts, and they disdained games like golf that took too long to play. Once, during the early days of Google, Time magazine had arranged to photograph Sergey in a white lab coat. When the photo shoot ran over the allotted time, Sergey abruptly called out, “Red alert,” and simply walked away without explanation.

Page and Brin together, it was said, were “two swords sharpening each other.” They were not breathtakingly more brilliant than their peers, said Winograd, observing that brilliance is commonplace among top Stanford engineering students. What was unusual about them, he said, was their boldness. “Page and Brin’s breakthrough,” writes Battelle in The Search, his book on the history of search, “was to create an algorithm-dubbed PageRank after Larry-that manages to take into account the number of links into a particular site, and 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. They believed this “wisdom of crowds” approach was a more objective way of measuring which Web pages were most vital. The goal was to get better answers to search queries. They understood one big thing: They were establishing a formula that would harness the growth of their search engine to the growth of the Web. What they needed was massive computing power to conduct lightning-fast searches, and huge servers to store the millions of indexed Web pages.

In 1996, Larry Page’s father, a polio victim as a child, died of pneumonia. He was only fifty-eight. Bereft, Page threw himself into his project. To crawl and index the Web required enormous amounts of Stanford’s computer system, and Page and Brin were not shy about using it. Together, he and Brin harassed the computer science department to grant them extra resources. Terry Winograd, who worked on the project, recalled that “they had more of a feel of teenage kids than most graduate students-‘Don’t tell me what to do!’” Professor Rajeev Motwani, who also worked on the project, said, “They didn’t have this false respect for authority. They were challenging me all the time. They had no compunction in saying to me, ‘You’re full of crap!”’ He recalled, “The fondest memory I have of Sergey is of him walking into my office when I was sitting at my desk and he would say, ‘Bastard!’ That was the kind of thing he would do. Larry was sitting outside. It was a joke. But behind the joke was that he wanted something from me: more computer time.”

Once, Winograd said, they snuck onto the loading dock where new Stanford computers were delivered and “borrowed” them to expand their computing power. Page and Brin brought a cart to transport the crates. Some years later, Page confessed that their embryonic search engine in 1997 hogged so much computer capacity that “we caused the whole Stanford network to go down.”

The new search engine, at first called BackRub, was an object of some secrecy. Spurred by Page’s obsession with Tesla, who unwittingly gave away his inventions by sharing them with others, Page and Brin zealously guarded the algorithms that created PageRank. But as Ph.D. candidates, they were expected to present their work, so to satisfy Stanford’s academic requirements they agreed to deliver a paper in January 1998. At the time it wasn’t clear whether they wanted to be entrepreneurs or academics. “We almost didn’t start Google,” Page said. “We wanted to finish school,” as their fathers had. Page remembered the words of Stanford professor Jeffrey Ullman, who urged them to leave the university: “You guys can always come back and finish your Ph.D.’s if you don’t succeed.” This argument ultimately proved persuasive, but not before the paper was delivered.

The database they discussed consisted of 24 million Web pages; a typical search took one to ten seconds. They chose the name Google to replace BackRub because, they said, “it is a common spelling of googol, or 10¹⁰⁰ and fits well with our goal of building very large-scale search engines.” (Actually, they wanted to name it Googol but that domain name was taken. They also thought of The Whatbox, Brin said a few years later, but “we decided that Whatbox sounded like Wetbox, which sounded like some sort of porn site.”) Their paper stated that their search technology offered “two important features that help it produce high precision results. First, it makes use of the link structure of the Web to calculate a quality ranking for each web page. This ranking is called PageRank… Second, Google utilizes” links-518 million hyperlinks at the time-to make maps that “allow rapid calculation of a web page’s ‘PageRank.’” They presented some calculations to describe how they approximated “a page’s importance or quality.”

Page and Brin’s paper was attempting to advance a belief that both their fathers had passed on to them: artificial intelligence (AI) was the next scientific frontier. The search engine would supplement the limited human brain. “Brin and Page,” Nicholas Carr would write years later, “are expressing a desire that has long been a hallmark of the mathematicians and computer scientists who have devoted themselves to the creation of artificial intelligence.” They were following the lead of René Descartes, the French philosopher/mathematician who four centuries ago argued that “the body is always a hindrance to the mind in its thinking,” and mathematical formulas were the preferred route to “pure understanding.”

Their paper derided search engines that had become “commercial” and “advertising oriented,” and offered an example of how “the advertising business model” did not correspond “to providing quality search to users.” Suppose, they wrote, a user did a search for cellular phones and the top result was a report on how the use of cell phones was a dangerous distraction while driving. Although this search result might be judged highly important by their PageRank algorithm, it would be likely to provoke protests from cell phone advertisers. Thus, they concluded, “we expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers.”

The search system they proposed-shaped around teams of engineers who shared information, beta tested everything, and treated users, not advertisers, as kings-was in turn shaped by the Stanford and Web culture of the time. “They were,” observed Harvard Law professor Lawrence Lessig, an author and intellectual guru to a generation of Webheads, “part of an engineering tribe that defined itself as the anti-Microsoft. What it meant to be on the other side was to develop the exact opposite intuitions. Microsoft’s approach was: ‘You’re going to live by my rules.’ The opposite is: ‘No, I’m going to build it and you’re free to use it however you want. I’m just going to empower you to do what you want.’ It’s the Unix philosophy: Give me a little pile of code and you can plug it into anything you want. That was Stanford in the nineties.” It was the Netscape philosophy too, for the same January 1998 month Page and Brin presented their paper, the company that grew out of the browser invented by Marc Andreessen announced that it was revealing the source code to its browser; the new open-source browser would later be named Mozilla.

The presentation was a hit among the “tribe,” the professors and graduate students in the audience. Page and Brin had solved a problem for Internet users, said Motwani, who thought: “This is going to change the way the Internet is used!” The word of mouth was electric. Motwani was certain Internet companies would jockey to purchase the technology, and soon after, Brin said, the two partners began speaking to various Silicon Valley companies. Yet all passed on possibly acquiring Google. Even new media companies, it appears, were slow to peer over the horizon.

IN 1998, the year Google was incorporated, utopianism radiated from Silicon Valley and across the Web. Nicholas Negroponte, the founding director of MIT’s Media Lab, published a book, Being Digital, proclaiming that the Web would usher in a new generation “free of many of the old prejudices… Digital technology can be a natural force drawing people into greater world harmony.” The Internet promised freedom from subscriptions and rental charges, and from the crass and misleading advertising dominating television. Digital companies giddily extolled their “traffic” and “page views” and “market valuations,” ignoring their sparse revenues and nonex istent profits. “New media” executives marched to conferences attended by “old media” and gleefully insulted them: “You guys don’t get it!” they’d say. “Open up. Share your content. Dump your expensive printing presses. Use the Internet as a promotional platform and your business will grow.” But how to make money? No one knew.

Greed was also in the air, provoked by dreams of untold riches. Business students flocked to Silicon Valley. Optimism was the drug of choice. Page and Brin opened Google’s first office in the living room of the two-bedroom graduate housing unit in Escondido Village that Sergey shared with a roommate. The Google computers and server were stored in the living room of Larry’s graduate residence. Their machines placed a serious strain on the limited electrical supply, and they learned to break into the basement of Larry’s building to reset the circuit breaker. “Fortunately, I had taken up lock picking so I could get us into there,” recalled Brin. He had read a book written for the very purpose: The MIT Guide to Lock Picking.

Page and Brin had definite ideas and were not easily swayed. They “thought it was sleazy,” Motwani said, to allow Web sites to pay to appear near the top of searches, as other search engines permitted. They were determined to build a computer system that would never lack capacity, as the one at Stanford sometimes did. To build user trust they wanted a simple, functional home page without advertising or pictures; they wanted to serve users by getting them off the Google site as quickly as possible and on to their destination. Page and Brin wouldn’t spend a penny to market Google. Anyway, they didn’t have a penny; they had just about maxed out their three credit cards. They believed in word-of-mouth advertising: they had the best search engine, and they were sure word would spread.

Their first employee, Craig Silverstein, joined them in Sergey’s living room in 1998. Silverstein, who today is the company’s director of technology, had the foresight, he laughs, to “negotiate the lowest salary. Instead I said, ‘I’ll take stock.’” It was phantom stock, and what the founders needed was real capital. That winter, a Stanford computer science professor, Jeffrey Ullman, introduced them to Ram Shriram, a well-connected angel investor in the Valley. After making his fortune at Netscape Communications, Shriram had recently launched Junglee.com, an online product search site. Larry and Sergey instinctively liked and felt comfortable with the Indian-born Shriram, an affable, unpompous man who asks pointed questions with the finesse of a politician. They wanted to demonstrate their search engine and Shriram suggested “a blind test” in which he picked a keyword and searched it on Google and three other search engines. Shriram was impressed with the speed and relevance of the results. But he told them, “I’m not sure there is room for another search engine.” He offered to introduce them to InfoSeek, Yahoo, and Excite, and suggested they sell the technology. Larry and Sergey were still ambivalent; they wanted to build a great search engine themselves. But months later, in May, Shriram remembers, they called again and said they had completed the meetings he recommended. He assumed they had been rejected, but reluctantly agreed to meet.

Larry and Sergey drove to Junglee’s offices in Sunnyvale and described each of their visits, the most interesting of which was with the founders of Yahoo, Jerry Yang and David Filo. Yahoo was a thriving company that attracted visitors with a broad menu of content encompassing finance, news, and other services. Yang and Filo, they reported, were impressed with their search engine. Very impressed, actually; their concern was that it was too good. Yahoo was a public company, and the more relevant the results of a search were, the fewer page views users would experience before leaving Yahoo. Instead of ten pages, they might see just a couple, and that would deflate the number of page views Yahoo sold advertisers.

“That was for me the aha moment,” said Shriram. “For the first time, I saw this as something disruptive.” Companies like Yahoo and Excite were more interested in being portals than in improving search, leaving an opening for Larry and Sergey. They were still piggybacking on the Stanford system, and they told Shriram that their search engine consumed so much computer capacity that the university wanted them to stop. They needed money.

Shriram offered to make an initial investment and help them incorporate. He also helped them work out a licensing agreement with Stanford so the university would benefit if their two graduate students were successful. On September 7, 1998, the day Google officially incorporated, he wrote out a check for just over $250,000, one of four of this size the founders received. The first was signed by Sun Microsystems cofounder and then Cisco executive Andy Bechtolsheim, who wrote his in August. He had been introduced to Page and Brin by Stanford computer science professor David Cheriton, who became the third initial investor. At the time, Shriram was in the process of selling Junglee to Amazon.com, and in August would start spending most of the week in Seattle as vice president, business development, at Amazon. This link produced the secret fourth investor, Amazon founder Jeffrey Bezos. One day Bezos asked Shriram what was interesting in the Valley. When he touted Google, Bezos asked Shriram to arrange a meeting with Larry and Sergey. “I just fell in love with Larry and Sergey,” Bezos recalled; he wrote his check in November. His enthusiasm was ignited less by the idea, and “certainly not by the business plan. There was no business plan. They had a vision. It was a customer-focused point of view.” In September, Shriram was asked to join Page and Brin as one of three Google directors, a seat he continues to hold on a board that now consists of ten members.

For $1,700 a month, the just-formed company sublet new office space: the two-car Menlo Park garage and two downstairs spare rooms of an 1,800-square-foot house in Menlo Park. The owners were friends: Susan Wojcicki, an engineer at Intel, and her husband Dennis Troper, a product manager at a tech company. The newly constituted Google had found its way to them because Sergey had dated Susan’s roommate at Stanford Business School. The house was not located in the upscale sections of Menlo Park, near the Sand Hill Road offices made famous by the venture capitalists whose offices are there, or in nearby Atherton, where many of these venture capitalists live and in 2008 an acre of land could sell for $3 million. Rather, it was on a dreary flag lot at 232 Santa Margarita Avenue.

A concrete driveway led up to the garage, where a whiteboard had been attached with the legend, “Google Worldwide Headquarters.” Inside were three tables, three chairs, a dirty turquoise shag carpet, a tiny refrigerator, an old washer and dryer, and a Ping-Pong table that was kept folded because there wasn’t space to leave it open. They kept the garage door open for ventilation, and used a bathroom on the first floor of the house. Their desks were old pine doors that straddled sawhorses. On Monday mornings, Shriram met with Page and Brin in the cramped bedroom they used as an office, before flying to Amazon for the week. Days, nights, and weekends, Page and Brin and Silverstein lived and worked there, often leaving well after midnight in Silverstein’s ancient Porsche. “He’d start it and it would backfire five times-rat-tat-tat-tat-tat,” Brin said. “It sounded like a machine gun going off. We started pushing his car out onto the street before we’d start it.”

Although it was still in beta testing in the early fall of 1998, Google was getting ten thousand search queries daily. “I was really getting excited about Google,” said Shriram. The founders were getting excited too. “Larry said, ‘We’ll be at the doorstep of information,’” Susan Wojcicki recalled. Brin told her the company “was going to be worth billions of dollars.” That was also what they told visitors from search and portal companies who came to Wojcicki’s living room to discuss the possibility of acquiring Google. Even though the founders had no interest in selling, Wojcicki recalls that they’d propose an outrageous price, knowing it would deflect suitors. They also used the house for their first press interview, with a correspondent from the German magazine Stern, in which they displayed a combination of grandiosity and zeal. Search really “does have a potential to really change things forever,” Brin said. It can “play a really important role in people’s lives, determining what information they get to look at,” said Page, adding, “and that’s an important thing to do for the world.” Although Google had scant income, Page and Brin believed that if they built Google, people would come.

CHAPTER THREE. Buzz but Few Dollars

(1999-2000)

In early 1999, Google didn’t look like a company that would one day menace Microsoft. Aside from the one million dollars received from its four initial investors, and small amounts collected in the past half year from a handful of other angel investors like Ron Conway, Brin and Page had just a few sources of income: a twenty-thousand-dollar-per-month contract to provide specialized search results to Red Hat, a North Carolina consulting firm that advised companies using Linux and other open-source software, and the licensing of its search to several Web sites. Google had indexed only about 10 percent of the Web, and relied on a relatively primitive computer system to process search traffic that would explode from ten thousand to as many as five hundred thousand daily, each of which took three to four seconds to fetch results. To grow, Page and Brin knew their search engine had to “scale”: it had to crawl the entire Web, which would require vast computing power.

The first priority was recruiting engineers. By the end of 1998, a total of six Google employees were crammed into the garage and two small bedrooms. They’d need more room if they were going to expand. So in early 1999 they relocated to a five-thousand-square-foot second-floor space over a bicycle store in downtown Palo Alto, where they balanced more pine doors on sawhorses to make desks and began hiring engineers to fill them. The result was “a graduate-student Disneyland,” Michael Specter wrote in The New Yorker in 2000, stocked with hockey sticks, Rollerblades, granola, PowerBars, “urns of coffee, and coolers of fruit juice to drive anybody through to 4 A.M.-which is not an unusual time to find people in the office.” Even then massages were part of the Google culture; there was a sign advertising that the service was available in the conference room-when the room was not being used for work. A green Ping-Pong table served as their conference table, and that was where, in April 1999, they interviewed Marissa Mayer, then completing a computer science degree from Stanford. It was the peak of the Internet bubble, and the cream of graduating engineers like Mayer had their pick of jobs. Mayer is a brilliant engineer and a proud computer nerd, but with her porcelain skin and lustrous blond hair she seems far from the stereotype-until one hears her jarring high-pitched giggle and tries to follow her words, which gush so rapidly that they collide. Brin, aware of her interest in using math to solve puzzles like how to make a Web site user-friendly, quizzed her for more than an hour. “Larry said nothing the entire time. At the end of the interview I asked, ‘Do you speak?’”

She fit right in, and was invited back the next day to be interviewed separately by three engineers, who put her through the equivalent of a Ph.D. oral exam. Before making her an offer, Brin posed to his colleagues what has become known around Google as the airplane test. How would you feel, he asked, if you were stuck next to this person on a plane for several hours? Any candidate who failed this test was unlikely to be a good collaborator or team member. Mayer passed the test and became one of Google’s first twenty employees. (Because she was hired before completing school, Mayer is only certain she was between the fifteenth and twentieth employee.) Like all new employees, she was granted stock options that would one day make her wealthy, in her case enough to own a five-million-dollar penthouse apartment at the Four Seasons Hotel in San Francisco, filled with Andy Warhol and Roy Lichtenstein paintings, and a large, three-level Cape Cod house in Palo Alto.

Google now had a team of engineers but no idea how to attract new investors. Ram Shriram recalled telling Brin, “We need a business plan,” to which Brin replied, “What’s a business plan?” Weeks earlier, Salar Kamangar, a biology major at Stanford who was taking a fifth year to study economics, had volunteered to work for free. With Shriram as a tutor, he was drafted to draw up the business plan. Kamangar, employee number 8, prepared, he said, “a binder on what other companies were doing in search and what was different about Google.” Page and Brin were pleased, and asked him to develop a PowerPoint presentation to show potential investors that Shriram and Bechtolsheim were introducing them to. The founders also asked Kamangar to attend these meetings, but first needed to give him a title. They decided, he said, on “senior strategist.” In their first business plan, Google had a sketchy idea that they’d make money by charging companies for advanced search results and by getting digital advertising companies like DoubleClick to sell online ads of some kind. The revenue plan wasn’t very impressive, but the search engine was. Users were multiplying. Secrecy was the watchword. While Google search was still small, he knew it was much larger than competitors anticipated: “We were in stealth mode,” Kamangar said. “If first Yahoo and then Microsoft knew that our number of searches was so much larger, they would be more aggressive.” Repeatedly, Page explained his mania for secrecy by invoking the example of Tesla.

Google had to sell the venture capitalists (VCs), but they also had to build a sales force to secure revenues, and for this task they required an experienced senior strategist and salesman. Netscape had just been acquired by AOL, and Shriram knew that Omid Kordestani, the Iranian-born vice president of business development at Netscape, was ready to move on. He orchestrated a meeting between Kordestani and the founders. On paper, Kordestani was a perfect fit for vice president of sales and business development. He held an MBA from Stanford’s business school, an undergraduate degree in electrical engineering, and the natural enthusiasm and agreeable personality of a salesman. But first he had to endure a free-for-all Ping-Pong table grilling by the founders and the engineers. Brin opened the interrogation by saying, “I’ve never interviewed a business person before.” From that inauspicious beginning, Kordestani remembers, “They drilled me for five hours.” At the end, no job offer was tendered. The founders had an aversion to business executives, stereotyping them as bureaucrats, not entrepreneurs, and they wanted reference checks. They asked the angel investor who wrote their first check, Andy Bechtolsheim, to make some calls.

“It was a very thoughtful process,” Kordestani said, perhaps euphemistically; the eventual job offer was followed by two weekends of intense negotiations in February 1999 with the founders and then with David Drummond, Google’s outside counsel at the powerhouse Valley firm of Wilson Sonsini Goodrich amp; Rosati. (That the hiring process was so laborious would provide good preparation for Drummond; he himself would undergo a milder version of it in 2002, when he was hired as Google’s chief legal officer and vice president of corporate development.) Drummond remembers how in the early days of Google, Page and Brin would visit Wilson Sonsini’s offices and minutely inspect every legal document, asking him to explain each detail. Kordestani was finally hired, and received a hefty 2 percent of the phantom stock, more than any Google employee aside from the founders and Eric Schmidt, who joined in 2001; when Google’s stock soared, Kordestani was a paper billionaire.

The hiring process at Google in some ways paralleled the algorithmic approach to search. Although the founders applied the airplane test, that criteria was less important than the premium they placed on SAT scores and on grades and degrees from the best colleges. Real-world experience counted less than objective measurements. The thought that an entire human being could be judged by objective criteria was preposterous. It was a reminder of the tunnel vision Brin and Page-like so many young entrepreneurs-brought to their work. One reason they succeed is that they refuse to be diverted from their goal. But aside from the business books Page read before he started Google, he and Brin were relatively narrow in scope, without a 360-degree view of the world.

The hiring process did have its light moments. David Krane was working in public relations at a software company when he heard about Google. He was taken with the quirky sensibility he found when he clicked on the “About Google” button on their Web site. The son of a nuclear physicist, Krane once harbored hopes of becoming a musician. He was enamored of technology and was a rarity among PR people in that he could explain the difference between PQA (palm query application software, which allowed Web material to be seen on a handheld device) and HTML (hypertext markup language, the dominant Web language). A friend passed his ré sume to Google’s then vice president of corporate communications, Cindy McCaffrey, who was hired in July 1999 as employee number 26. She interviewed him, as did countless other executives over the next four and a half months. Finally, separate interviews were arranged with Page and Brin, both of whom found public relations and marketing a form of huckster-ism. It was no surprise that the first question Brin asked was, “Explain something technical to me? Topic of your choice.”

Ideas rushed to Krane’s brain, and he made a surprising choice. He explained how to make a reed for a clarinet, how to file and test and tweak it so the musical tone was clear and warm.

Brin listened, then quickly moved on to his second question: “Have you ever heard of Slashdot?”

Slashdot was a technology news site that encouraged user-generated comments, a pioneer of what came to be known as blogging. Krane smiled and pulled from his pocket a geeky badge of honor: a Palm 7, which permitted a wireless Internet connection to one of his favorite sites, Slashdot.com. “I thought,” said Krane, “I had aced the interview!”

Brin shook hands and left, and Page entered. “He greeted me in a very reserved way. He asked me the equivalent of a tell-me-about-yourself ice-breaker question.” Krane waltzed through his life, his interests, his passion for Google. “I wasn’t getting any kind of signal back from Larry. It was like talking to a stone wall.” He thought, “I’m sinking!”

Desperate, he began to talk about music, and his musical training. He completed maybe three sentences when Page excitedly interrupted, “That’s where I know you!”

Krane was mystified.

“That’s where I know you! I was at Interlochen too, that same summer! And I also played saxophone!” They swapped memories of the three months at Interlochen Arts Camp. “We figured out that we sat next to each other. Larry was in my left ear in the same jazz band. I played tenor sax and he played alto sax. We were both joined by acne, big glasses, and blue corduroy pants and light blue polyester short-sleeved shirts with a big butterfly collar, the Interlochen uniform.” Days later, Krane was hired on as employee number 84. Today he is Google’s director of global communications and public affairs.

As the business took shape, the founders thought more and more about aesthetics. They wanted a home page that was both playful and uncluttered, so they hired a Stanford design teacher named Ruth Kedar. Her instructions, she recalled, were clear: “Google wanted to create a unique logo that would clearly differentiate them from the other search players at the time… These other players were commercial portals first, and search engines second. Google wanted to convey that it was a search provider first and foremost… Google as a brand should repudiate all things corporate, conventional or complacent.” The design was meant “to look almost non-designed, the reading effortless. The colors evoke memories of child play.”

Years later, Page and Brin demonstrated their playful irreverence. It was April 1, and the white space on the Google home page suddenly carried a line under the search box: “A Cool World: Enjoy a rosier future as a Virgle Pioneer.” When the link was opened, an invitation appeared to sign up for an “Adventure of Many Lifetimes.” The invitation read: “Earth has issues, and it’s time humanity got started on a Plan B. So, starting in 2014, Virgin founder Richard Branson and Google co-founders Larry Page and Sergey Brin will be leading hundreds of users on one of the grandest adventures in human history: Project Virgle, the first permanent human colony on Mars.” The site described the alleged deprivations, including low broadband rates and physical hardships and potential death. It was an April Fools’ joke.

The home page design, and a few glowing mentions about its search prowess in media like PC Magazine, generated some buzz about Google in the Valley. Ron Conway, the angel investor, recalled a reception attended by Shawn Fanning, the founder of Napster, who had become a poster boy for the digital revolution. Brin and Page were unknowns and Conway remembers them approaching Fanning and saying, “What does it feel like to be on the cover of all those magazines?”

“You guys have a really cool search product,” responded Fanning. “You’ll be more famous than I am!”

Danny Sullivan, a former reporter who left newspapers in 1996 to publish a Web newsletter called Search Engine Watch (now called Search Engine Land), and who is the closest approximation to an umpire in the search world, remembers the early buzz about Google. The initial search engines-AltaVista, Highbot, Lycos, Excite, Infoseek, GoTo, Yahoo-were more interested in becoming “sticky portals” that trapped users on their sites, which diluted their focus on search. And when they performed a search, they were not impartial, allowing advertisers to buy their way to the top of the search results. Google, by contrast, “was really dedicated to search,” and refused to allow advertisers to distort the “science” of their search results.

Despite their young age-they were twenty-six-and the tight focus of their education, Brin and Page had extraordinary clarity about what search users might want. They rejected the conventional wisdom embraced by AOL and Yahoo and Microsoft’s MSN to create portals and try to keep users in their walled garden with an array of content. They believed the right approach was to get users out of Google and to their search destination quickly. They rejected advertisers who wanted to place banner ads alongside search results, because the banners slowed results, were not intrinsic to search, and were a distraction. In the late nineties, when pop-up ads were the dominant way to advertise on the Web, the founders had the Google tool bar block them. They declined to place ads on their most valuable piece of real estate, the uncluttered opening Google page containing the search box.

Brin and Page resisted ads because they shared an allergy then common among Webheads and many folks who attended Burning Man: that advertising was like a rude stranger interrupting a conversation to sell you something you neither wanted nor needed. “These guys were opposed to advertising because they had a purist view of the world,” said Shriram. Like some Burning Man attendees, Page and Brin were-no other word will do-odd. Barry Diller, the CEO of the InterActiveCorp, a diverse collection of such e-commerce sites as Expedia and Ticketmaster, recalled visiting Page and Brin in the early days of Google. As they talked, Diller was disconcerted to see that Page did not lift his head from his PDA device; and Brin arrived late, on Rollerblades. “It’s one thing if you’re in a room with twenty people and someone is using their PDA,” Diller recalled. “I said to Larry, ‘Is this boring?’”

“No. I’m interested. I always do this,” said Page.

“Well, you can’t do this,” said Diller. “Choose.”

“I’ll do this,” said Page matter-of-factly, not lifting his eyes from his handheld device.

“So I talked to Sergey. I left thinking that more than most people they were wildly self-possessed.”

The founders may not have had a clue how to make money at Google, but they were clear that their mission was to build a great search engine and offer this search for free. Susan Wojcicki, the engineer who rented her garage to the founders and became employee number 18 and who later introduced her sister, Anne, to Brin, said the founders “were on a mission to build the best search engine,” and “early on understood that what mattered were users.” Their initial mission statement declared that they aimed “to organize the world’s information and make it universally acceptable.” This mission on its face was not as crassly commercial as Microsoft’s. Bill Gates’s quest was to put “a computer in every home and on every desk.” Each computer sold increased Microsoft’s dominance over the software market for the PC. Google’s missionary zeal, coupled with the fact that its search was free, cloaked its lust to also build a profit-making machine.

Building the machine, however, required capital. Relying mostly on original angel investors Shriram and Bechtolsheim for business advice, the founders decided early on to seek funding from more than one venture capital firm, so as not to rely on a single source of funds, and to assure their independence by selling no more than one-quarter of the company. They set out to recruit two of the most prominent VC firms in the Valley, Kleiner Perkins Caufield amp; Byers, whose senior partner John Doerr was a trained engineer who had helped fund such start-ups as Amazon, Netscape, and AOL, and Sequoia Capital, where Oxford-educated former Time magazine reporter Michael Moritz was a partner and an early backer of Yahoo and PayPal. Doerr remembers the meeting vividly. They met in the conference room next to his glassed office on Sand Hill Road. Page and Brin made a brief PowerPoint presentation to establish the most telling facts: by the end of 1998 they had indexed twenty-six million Web pages and were now doing half a million searches a day. Doerr was impressed. Instead of a long-winded explanation of their mission, Page and Brin made a high-concept pitch consisting of eight words: “We deliver the world’s information in one click.”

“I asked Page,” Doerr recalled, “‘how big will Google’s business be?’”

“Ten billion,” he said.

“Surely you mean market cap?” asked Doerr.

“No, revenue,” answered Page. He did not volunteer that they had no plausible revenue plan; instead he expressed faith that they would find a way to monetize their exploding search traffic. Pulling out a laptop, they demonstrated how much faster and more relevant a Google search was than those of other search engines.

“I almost fell out of my chair!” Doerr said. It was “one of the most extraordinary conversations I ever had in my life. I knew in that first meeting I wanted to invest in this business.” Page and Brin were similar to other founders he had funded-young men who had dropped out of school, who spoke quickly and were consumed by their work-but Doerr was struck by what he calls their audacity and singular focus. Doerr had been an investor in Excite, an early search engine, and had seen how the company lost focus as it chased becoming a portal. Moritz, too, was sold on Page and Brin’s “devotion to their dream. They were on a mission. We’ve learned over the years to pay close attention” to this kind of clarity. Besides, he added, “Their product was better.”

The plan was for Doerr and Moritz to sign a contract certifying that the two firms valued Google at $100 million and would invest a total of $25 million. There were some hitches, though. Each VC wanted to do the deal alone, but Page and Brin would not budge, insisting they do it together or not at all. And Doerr and Moritz were worried that Page (the CEO and chief financial officer) and Brin (the president and chairman of the board of directors) had between them roughly zero management experience; they wanted the founders to recruit professional managers. After protracted discussions, they finally reached a verbal agreement. “The understanding when we invested was that a CEO would, among others, be hired over time,” Moritz said. The founders would ignore this understanding, which later created some friction. They hit one other speed bump. While the parties were haggling, recalled Shriram, Brin phoned him and said he had met with another venture capital firm, one Shriram had earlier recommended. The VC told Brin that Google was worth $150 million, substantially more than the current estimate. “Should we do it?” Brin asked. Should they dump Doerr and Moritz in favor of the higher valuation?

“You’re already committed,” Shriram told Brin.

Nevertheless, Shriram recalled later with a smile, “Sergey mentioned this to Doerr and Moritz and it speeded up the process!” Brin, he said, is no Boy Scout, but rather a sly, dexterous deal maker: “I think of him as Kobe Bryant, a game changer.”

ON JUNE 7, 1999, Google issued its first press release announcing that Kleiner Perkins and Sequoia had invested twenty-five million dollars in Google. They also held their first press conference, in a small room in the Gates building at Stanford. Page and Brin, wearing white tennis shirts with the Google logo, sat at a Formica table flanked by Doerr, Shriram, and Moritz. Andy Bechtolsheim, Rajeev Motwani, and Terry Winograd sat in the audience with five reporters. As the journalists looked on, the founders gave a lengthy explanation of the technicalities of PageRank, their methods for indexing the Web and devising algorithms, their notions of “latency” and “scale,” and just about anything else they could think of.

At last a reporter asked the obvious question: How does Google plan to make money?

“Our goal,” Brin said, “is to maximize the search experience, not to maximize the revenues from search.”

At what appeared to be the conclusion of the press conference, Brin rose with a broadly smiling Page beside him and said, “If you want to ask more questions, fine.” He invited the reporters to stay and take a Google shirt and share refreshments. Unlike today, where their press appearances are not frequent and are treated, certainly by Page, as occasions to be endured, a home video of the press conference suggests that the two of them would happily have lingered all day.

Google’s next business breakthrough came later that same month. Omid Kordestani negotiated a deal with Netscape and its new corporate owner, AOL, to designate Google as the default search engine for the popular Netscape browser. The deal boosted Google searches to more than three million per day. “That was pretty exciting,” said Brin. “That was a big deal for us.” It was a major endorsement of Google. It was also a major test, bringing in huge numbers of searchers. “We got overwhelmed with traffic. It was our first big search engine crisis,” remembers Craig Silverstein. “We shut off Google.com that day to everyone but Netscape-till we could buy more computers!” They were burdened by another traffic jam, remembers senior software engineer Matt Cutts. When he joined the company in 1999, among his first tasks was to figure out how to block pornography searches, which accounted for one of every four queries. His solution was to assign a lesser weight in the Google algorithm to the words commonly used in porn searches, or for Google’s engineers to misspell the keywords in the Google index so the porn was difficult to retrieve. First he had to figure out the pertinent words. He spent hours poring over porn documents. Then his wife came up with the idea of baking cookies and awarding one “porn cookie” to each engineer who discovered a salacious keyword. Porn search traffic plummeted.

By the summer of 1999, Google was flush with cash and had outgrown the five-thousand-square-foot Palo Alto office, where forty employees now knocked knees when sitting at their desks. They needed to move, so Susan Wojcicki called in a real estate agent, who suggested the founders clear their schedules to visit possible sites. The founders thought this was a waste of their time. They knew what they wanted: to re-create the feel of the Stanford campus. Wojcicki remembers their saying to the agent, “Why don’t you go look at buildings and take some pictures and bring them back to us?”

In August, Google leased part of a two-story building rimmed by trees on Bayshore Boulevard in bucolic Mountain View. Initially, they rented the second floor but quickly expanded to the first, then to another building next door. It had obvious attractions: it was barely a ten-mile bike ride north to Stanford University, and in the distance to the west, the Santa Cruz Mountains formed a visible border. But unlike Palo Alto, where employees could walk to lunch, a meal in Mountain View required driving. The offices quickly became littered with pizza boxes and Chinese-food containers. The founders decided they’d need a chef. They’d select one in the same way fraternities and sororities at Stanford did: by having a Chef Audition Week. One chef, Charlie Ayers, “blew everyone away” with his array of “gourmet comfort food-like spaghetti and meatballs,” said Marissa Mayer. (It helped that Ayers was the former chef for the Grateful Dead.) He was hired in November to supervise the preparation of favorites like pizza and hamburgers, and also what he called big-ass barbecues, as well as vegetarian stir-fry, salads with lush tomatoes and fresh vegetables, carved turkey, fiery chili, lamb chops, steak, and generous slabs of sushi, to which he affixed an attractive New Age explanation: “The fat found in fish helps make the cell membranes round the brain more elastic and more able to absorb nutrients easily”

In addition to free food, the founders signed off on an abundance of other amenities that made venture capitalists uneasy. “I think they were a little bit perturbed to see the front-page stories in the San Jose Mercury News that we were hiring a chef and a masseuse,” Brin concedes. “But I think the actual economic and productivity outcome of this they grew pretty quickly to accept. They just didn’t think we should be known for that [profligacy].” He explained how he and Page approach free food and employee benefits: “A lot of it is common sense, a combination of common sense and questioning rituals.” Generous benefits help recruit and retain employees, he said. Compelling employees to drive for meals, and find parking “would be a real productivity sink… and they’d probably not eat healthy food.” Besides, he added, waiting in line to pay would waste more time.

For all its intensity, Google could be a playful place to work. The first place in the Valley Al Gore visited after he left the vice presidency in January 2001 was Google. He had championed the Internet while serving in Congress and as vice president. His first meeting with Brin, Page, and Kordestani in February 2001 went smoothly, he said. “I liked them and they asked me to help them out and, initially, to join their board,” which he declined because he wasn’t sure whether he’d again seek the presidency. Instead, he said, “They asked me to be-the phrase they used was, ‘a virtual board member.’”

Al and Tipper Gore went on a long European vacation. They returned later in the spring, and newspapers carried pictures of the full beard he had grown. “When I went back to Google, Larry and Sergey and Omid-there weren’t that many of them-all ten of them had false beards on. It was hilarious!”

Google was growing into an informal, open place. At around 4:30 p.m. each Friday, employees now gather in the largest open space on campus, Charlie’s Cafe in Building 40, for TGIF. Refreshments-nachos, mini-hamburgers, pretzels, beer, soft drinks-are available. Employees sit on chairs arranged in a semicircle, with employees at other Google locations around the world on video conference. Brin and Page stand on a small raised platform to share corporate news and to answer questions from thousands of employees. New employees hired that week sit up front, wearing Noogler beanies with propellers on top. Loud music blasts from speakers. The affectionate bond between the two founders is displayed every time they make a presentation together or at these weekly Friday appearances. On stage, Brin is funnier, and tends to dominate, yet in the dozens of times I’ve watched them together, I’ve never noticed a hint of exasperation from Page, who is an intense person but nevertheless laughs easily at Brin’s jokes.

At the first TGIF I attended, in October 2007, Brin appeared wearing what looked like a green pilot’s jacket and Page wore a black one. They were in jeans and sneakers, and took turns talking-introducing the Nooglers; telling of some deals Google had made the past week; showing a video clip of former Alaska senator Mike Gravel, who was a stealth candidate for president, as he gave a speech on campus in which he described his visit as comparable to “an intellectual orgasm.” Brin cracked, “We’ll use that as a recruiting tool!” They fielded questions from employees. And they had a surprise guest calling in from an airplane. The guest was competing with static, and didn’t sound like himself, but managed to say hello.

“I heard that you won something today,” Brin said.

Up on the large screen behind them appeared a picture of Al Gore, who on this day had won the Nobel Peace Prize for his work on behalf of the environment, an award that was featured in the morning papers and dominated the news.

“We all feel grateful to you,” Brin said.

“Thank you, Sergey. And to you and Larry and Eric and the entire team. One of the fun things in my life is to be part of the extended Google family.”

A roar of applause cascaded from the balcony and throughout the cafe, and soon Gore was gone.

“He sounded a little like Stephen Hawking,” joked Page.

The hand of an engineer who spends too many hours in front of a computer screen shot up. “Larry and Sergey,” he asked. “Which prize?”

The personalities of the founders permeate the company. Doerr described Sergey as the “more exhuberant” of the two. “Sergey is more creative, more experimental than Larry is.” One longtime Google executive decribes him as a ham. “I love Sergey,” the executive adds. “He’s an exhibitionist. He needs more attention than Larry does.” Brin does most of the talking, and joking, at Friday TGIF gatherings. In the early days of Google, when they took the entire staff camping for a weekend, everyone had a canoe partner, except Brin. “He said, ‘It doesn’t matter. I’ll swim.’” Wearing a lime-green Speedo swimsuit, he jumped into the lake, becoming the center of attention. One cannot imagine Larry Page agreeing to appear on the game show To Tell the Truth, as Brin did in March 2001. The question posed was “Who is the real Google guru?” Each of the three contestants wore a Google T-shirt, and after questioning them, the four celebrity panelists unanimously guessed that the real guru was panelist number 3, who turned out to be a professional bowler. Only 22 percent of the audience guessed that Brin was the guru. But when it came time to stand and identify the real guru, Brin histrionically pretended to stand, then sat, then rose to shocked audience applause, reciprocating with a slight but delighted smile.

Despite the playfulness, few would describe the founders as ideal mediators. They are often too brusque and intimidating for that role. “Larry can be a little raw, but never unkind,” said Megan Smith, vice president of new business development. A part of the rawness is due to the fact that they are geeks, more comfortable staring at a computer screen than schmoozing, and too zealously impatient to waste time.

Page is more reclusive, and odder. He was once asked at a dinner, according to a dinner guest, “What’s the most important thing the government should be doing?”

“Colonize Mars!” Page said.

Most of the dinner guests nodded as if he had said something profound.

Page can be almost monklike. He ruthlessly guards his time, and can treat those who ask him to make a speech or meet reporters as if they were thieves trying to steal his time. A longtime Google employee describes Page this way: “Larry is like a wall. He analyzes everything. He asks, ‘Is this the most efficient way to do this?’ You’re always on trial with Larry. He always pushes you.”

While Brin is more approachable than Page, he, too, can be awkward around strangers. His wife Anne Wojcicki’s company, 23andMe, was feted at a fashionable cocktail party in September 2008 that was cohosted by Diane von Furstenberg and her husband, Barry Diller, Wendi and Rupert Murdoch, and Georgina Chapman and her husband, Harvey Weinstein. The event was held at Diller’s Frank Gehry-designed IAC headquarters in Manhattan. Brin appeared wearing a dark crewneck sweater and gray Crocs. He and Google are investors in her company and he is openly proud of her work. But she had to quietly beseech him to stay. He did, but hid behind his oversized Canon camera, moving about the vast room or retreating to a corner, always snapping pictures.

THE YEAR 2000 BEGAN with two bangs. The first was that Google entered the new year averaging seven million searches a day, a massive jump from half a million at the beginning of 1999. The second was the sudden crash of technology stocks. Between March and October, the NASDAQ Composite Index, which lists most tech and Internet companies, fell 78 percent. Yahoo’s stock at one point plunged from $119 a share to $4. As a private company, Google was both spared and offered opportunities. “As in any successful venture, there’s a lot of luck,” said Hal Varian. “One of the great things from Google’s point of view was the dot-com collapse in 2000. A lot of talent became available.” Google cherry-picked some good engineers.

But the company was burning through its cash. While Google’s revenues would total $19.1 million in 2000, its losses would be $14.7 million, more than double those of the previous year. And they’d had “zero discussion” about any kind of Google advertising until late 1999, recalled Salar Kamangar, who crafted Google’s first business plan and became vice president of product management. The founders feared ads would slow searches. They still believed Google could outsource monetization to ad firms like DoubleClick, or sell their search services to corporations. Page and Brin were relying on their faith that a way would be found to make money. This faith produced more friction with their two major investors, but Page and Brin were undeterred.

In The Search, John Battelle describes an encounter around this time between Page and Brin and Bill Gross, the founder of the Go To search engine. Gross had come up with an idea: he was convinced advertisers or Web sites would pay more for certain keywords if they could pay on a cost-per-click (CPC) basis, meaning they paid only if the user showed enough interest in a given ad to click on their link and perhaps make a purchase. The price for the keyword and the placement of the ad would be set in an online auction process. By mid-1999, GoTo had a network of eight thousand advertisers, with some paying by the click and others paying a fee to appear at the top of the search results. Gross approached Page and Brin to propose that the two companies merge, reports Battelle, but “Brin and Page turned a cold shoulder to Gross’s overture. The reason given: Google would never be associated with… a company that mixed paid advertising with organic results.” (Gross later changed his company’s name, GoTo, to Overture, and in 2002 would sue Google for allegedly stealing its cost-per-click model.)

Meanwhile, Google decided to offer its search to other Web sites and to share any revenues. It was a way to extend its reach, and to be paid for the use of its search engine. The most significant deal, signed in June 2000, established Google as Yahoo’s official search engine. Google paid dearly for the privilege, granting Yahoo a warrant to acquire 3.7 million shares of Google when it was issued. And few users knew they were conducting a Google search, because Yahoo wouldn’t allow Google’s branded search box on its page. For Google, the deal was another milestone. Its search traffic doubled to fourteen million on the first day of the partnership.

While most experts by the end of 2000 thought Google had the best search engine, this claim was conjectural. What was indisputable was that Google was now the most-visited search engine on the Web, with one hundred million daily search queries and a worldwide market share of about 40 percent. Yahoo had given Google a boost, but “it was really about the quality of the search,” said Search Engine Land editor Danny Sullivan. “People were coming to Google because they heard about it.” The rapid growth would provide Google a vital and at the time overlooked asset. More searches generated more data for Google about users, which led to better searches, which would eventually lead to more ad dollars.

The question of how to monetize search by turning traffic and data into cash remained unanswered. Unlike AOL, Google didn’t have subscription revenues. And unlike portals such as Yahoo, it didn’t have content sites on which to place banner or display advertising. In October 2000, Google introduced its first advertising program, called AdWords. It was a small beta test, available to 350 advertisers who paid for a selection of search keywords that allowed the advertiser’s small text ads to appear on the side of the search results. It was a self-service program. Companies gave Google their keywords and went online to retrieve data on the number of times users typed their keywords into the search box. The effort was clunky, and grew very slowly.

Although AdWords was a new media advertising effort, it borrowed an old media CPM (cost-per-thousand) model. Much in the way that a television network might know that millions of viewers were exposed to a thirty-second spot, but not whether they actually watched it or made a purchase because of it, advertisers paid based soley on the number of times their ad appeared. There was a link to the advertiser allowing users to learn more about a product, though Google did not get paid if the user clicked through. The program was also limited in that Google could not easily syndicate AdWords to partners because GoTo had already tied up other search engines, making Google less attractive to advertisers. In addition, prominent advertisers were not inclined to place their dollars on search keywords. Giving credence to something that seemed so puny was alien to the brand advertising they were accustomed to. Because Page and Brin insisted that all advertising be relevant to the keywords, Google only allowed ads to appear in 15 percent of all searches, which meant that Google was forgoing advertising dollars if the ads were not judged “relevant.” Page and Brin liked to boast that Google could move on a dime, but their company was moving ever so gingerly to embrace advertising.

They were moving too gingerly for Doerr and Moritz, who admit they were frustrated by Google’s mounting losses. In the eyes of investors, the issues of monetization and management were twined. Good managers would impose the discipline every profit maker requires. “The understanding when we invested was that a CEO, among others, would be hired over time,” said Moritz. The venture capitalists finally persuaded Page and Brin to hire a headhunter to find a CEO, but the young founders were resistant, fearful that “a suit” would subvert the Google culture. They met with about fifteen candidates, all accomplished executives who were invited to attend TGIF, to share meals with the founders in the cafeteria, to sit in on staff meetings. Brin went heli-skiing with one prospective CEO who boasted that he was an expert at the sport. (He wasn’t.) “They thought everyone they had talked to was a clown,” Paul Buchheit said. “The candidates didn’t understand technology.” Omid Kordestani said Page and Brin “knew in their gut that they wanted a fellow intellectual.”

The VCs feared the founders would find an excuse to reject every candidate, which was true. Marissa Mayer said she believes the CEO search was so protracted in part because “they were not convinced it needed to happen.” Mayer knew Page and Brin’s thinking. She was a central member of the engineering team. And she and Page were dating, as they would for about three years. Like most company founders, they believed they could better manage their baby, better ensure the implementation of their vision, better preserve the culture. Asked if the founders resisted, Moritz now responds like a State Department official: “They resisted hiring ordinary people, and that’s a wonderful tribute to them. One of the many lessons I learned from the Google investment is the importance of hiring spectacular people. Sometimes it frustrated us, but they were spot-on.”

Moritz, however, did not feel that way at the end of 2000. “All of us on the board, in particular John and Mike, felt we needed someone who had been there, done that. You can call it adult supervision,” said Ram Shriram. Caught between the VCs and the founders, his “job was to keep the two sides talking,” he said, describing his role as that of “a coach.” Some at Google even feared a VC coup. “The VCs figured, ‘Once we get a CEO in there we’d get control,’” said one early Googler.

Doerr and Moritz arranged for Page and Brin to meet with the founders of other Valley companies, such as Intel, Intuit, and Apple, to talk about management issues. “We like Steve Jobs!” Page and Brin chorused, to the annoyance of the VCs and, eventually, to the consternation of other Google executives. One new hire that year, Tim Armstrong, the president of advertising and commerce, said, “It was chaos when I got to Google.” Executives were needed to manage the brilliant engineers and help set priorities, he said. Under pressure internally and externally, the founders interviewed two computer scientists who met their standards, said Marissa Mayer. One was from New York, the other from the Valley. Both were offered the job, she said. But the New Yorker did not want to relocate his family, and the other thought he was on the CEO fast track at Intel. Both declined the offer.

By the end of 2000, Google had indexed one billion Web pages. But no CEO had been hired, nor had any professional managers, and there was still no clear path to making money. Google had built it, the traffic came, but the revenue had not followed. The venture capitalists worried that Page and Brin were humoring them-and maybe leading Google astray.

CHAPTER FOUR. Prepping the Google Rocket

(2001-2002)

While Google’s venture capitalists fretted that Page and Brin were spinning their wheels and that the company cried out for professional management, the Internet was growing and changing at warp speed. January 2001 brought two innovations that profoundly disrupted the existing order. Steve Jobs launched Apple’s iTunes application, and within seven years, iPod owners had purchased and downloaded five billion songs. Already reeling from piracy, the big four music companies felt compelled to allow individual songs to be sold at a price Apple chose (ninety-nine cents), inevitably undermining the sale of entire CDs, the centerpiece of their business model. That same January, Jimmy Wales and Larry Sanger launched Wikipedia. Within seven years this nonprofit effort would contain ten million entries in 253 languages, changing the way people gathered information. Wikipedia and iTunes were reminders, as if any were needed, that we had entered the dawn of a new digital democracy that granted more power to individuals.

Page and Brin were convinced that Google would become an even more profound disrupter of the existing order. Their philosophy, Page told a class at Stanford, can be distilled into two words: Don’t settle. He defended the exhaustive process of hiring at Google, and finding managers who respected and nurtured Google’s engineer-is-king culture. But there were too many kings. It wasn’t until January 2001 that Google finally hired its first vice president of engineering operations, Wayne Rosing, who had held a series of senior management positions at Apple, Sun Microsystems, and the Digital Equipment Corporation. The process was laborious, but eventually Rosing was hired. That was “the real turning point,” said employee number 1, Craig Silverstein. “He brought a professionalism to management we had not had before.” When he stepped into the chaos at Google, a shocked Rosing found that one senior engineer “had 130 direct reports.” Instead of doing what most companies did by relying on financial management software made by companies such as Intuit, Page and Brin had insisted that Google engineers invent a new system.

DOERR WAS EAGER to find a CEO for Google, and thought his friend Eric Schmidt might be a perfect fit. Because Schmidt held a Ph.D. in computer science-making him the rare professional manager who could speak the language of engineers-and did not have an oversized ego, Doerr assumed he could work with the founders. At the time, Schmidt was the chairman and CEO of Novell, a computer networking and software company then in the midst of a merger with Cambridge Technology. He wasn’t thrilled with the job; the commute from his home in the Valley to Novell’s headquarters in Provo, Utah, was arduous, and Novell was underperforming. One night, Doerr and Schmidt were chatting at a cocktail party. Doerr asked Schmidt what his plans were, and Schmidt said he hadn’t thought deeply about it.

“I think you should look at Google,” Doerr said.

“I can’t imagine that Google would be worth much,” said Schmidt.

“I think you should have a talk with Larry and Sergey,” said Doerr.

As it happened, he already had. During the process of vetting Wayne Rosing, Brin had called Schmidt, a former colleague of Rosing’s at Sun, for an opinion. The call lasted forty-five minutes and ended with Brin inviting Schmidt to visit Google.

Schmidt visited Google in December 2000. He knew Building 21 well, for he had worked there when it was Sun’s headquarters. In the office Page and Brin shared, he found two desks, a sofa, and the same lava lamps Sun had had on display. In contrast to the carefully groomed Schmidt, Page and Brin seemed to use their fingers rather than a comb to tidy their dark hair; Page’s shorter hair is pulled down and clings to his forehead, while Brin’s wavy locks are pushed back and one sideburn is longer and slants more sharply than the other. To his surprise, Schmidt saw his bio projected on the wall above the couch. There was little foreplay. “They started going at it,” Schmidt recalled. “They said I was mistaken in my business strategy with regard to proxy caches, a method Novell was using at the time to try to speed up Internet connections. Their thesis was that there was so much bandwidth coming down that such proxy caches were a bad business and would be unnecessary. I, of course, disagreed, and disagreed violently. This was a forty-five-minute meeting that went on for an hour and a half. I could not get them to accept the brilliance of my argument. They started from the data they saw at Google, and peppered me with questions. I hadn’t had that good an argument in all my years at Novell.” Page and Brin were also pleased. They appreciated Schmidt’s technical prowess, and he passed the airplane test when he revealed that he, too, was a regular attendee at Burning Man. How much of a suit could he be?

Schmidt was born April 27, 1955, in Falls Church, Virginia, and like Page and Brin was raised in an academic family. Wilson Schmidt, his father, was a professor of international economics at Johns Hopkins and worked for a time in Richard Nixon’s Treasury Department; Eleanor, his mother, received a master’s degree in psychology but stayed home to look after Eric and two brothers. Eric attended public schools, where he got hooked on time-share computers, which in those prehistoric days still relied on punch cards. Another solo-sports enthusiast, he earned eight high school letters as a distance runner. After graduating, he was accepted at Princeton as an architecture major, but switched to electrical engineering because, he said, “I lacked creativity.” He became adept at programming. “All of us never slept at night because computers were faster at night,” he said. He worked summers at Bell Labs, where he was skilled enough to write a software program called Lex, a code that facilitated the writing of text. He received an electrical engineering B.S. from Princeton in 1979 and an M.S. and a Ph.D. in 1982 from the University of California, Berkeley. Graduate school summers were spent working at Xerox PARC, the famed lab that hosted the creation of computer work stations, that forged the technology that became the mouse, laser printers, and the Ethernet. After completing Berkeley, he joined the research staff in the Computer Science Lab at PARC, where he worked alongside such software pioneers as Bill Joy (who became one of four founders of Sun Microsystems) and Charles Simonyi (who would oversee the development of Microsoft Word and Excel).

His first corporate job was at Sun, which he joined in 1983. Over the next fourteen years, Schmidt would demonstrate a repertoire of talents: as a manager who hired and supervised ten thousand engineers, as a scientist who nurtured the innovative programming language Java, and as Sun’s chief technical officer. He left in 1997 to become CEO of Novell. By his own admission, he failed to do proper due diligence before he took the job. “When you grow up in a company that is well run, it’s hard to imagine a company not well run,” he said. Novell was not well run. When he arrived, Novell had a $14,600,000 shortfall to declare in its quarterly report, and executives there proposed they tap their reserves to cloak it. Schmidt chose to report the shortfall, and Novell’s stock took a dive. Chapter 11 was a real possibility. “Getting near bankruptcy is a pretty good experience for being a tough CEO,” said Schmidt. Looking back on his tenure at Novell, Schmidt candidly said, “I did an undistinguished job.”

Still, his skills and temperament were attractive to Page and Brin. More conversations ensued, and in February of 2001 they offered him the CEO job. Schmidt could not accept until the Novell merger was completed; it was in March that he was named chairman of Google. He assumed the title of CEO in August, and Page was named president, products, and Brin president, technology. According to SEC documents Google filed when it went public, Schmidt was paid a salary of $250,000 and an annual performance bonus. He was granted 14,331,708 shares of class B common stock at a price of 30 cents per share, and 426,892 Series C preferred stock at a purchase price of $2.34. LarryandSergey had a partner.

THE APPOINTMENT WAS GREETED with some skepticism. Schmidt’s critics said he was barely escaping from Novell. They sneered at the Mercedes he drove, the suits and ties he wore. They wondered whether he had the right skill set. “No one from his previous jobs,” said one industry insider who knows him well, “would say that Eric was an inspirational leader, a great speaker or salesman, a take-charge leader like Paul Otellini of Intel, Carol Bartz of Autodesk, or John Chambers of Cisco.” Skepticism about Schmidt was reinforced by the management structure announced by Google. Although Schmidt was named CEO, there was an unusual division of power. He, Brin, and Page would work as a team, and if there was a difference between the two founders over routine decisions, Schmidt would act as the tiebreaker. “We agreed that on any major decision, the three of us must agree,” he said.

When Schmidt arrived full time at Google there was some hissing that he was a stooge. “Eric doesn’t have a huge ego,” venture capitalist and former Fortune columnist Stewart Alsop told GQ. “He’s willing to suffer the myriad small indignities of being a pet CEO.” Reminded of this disparagement, Schmidt declined to take the bait and after a pause said, “I think it’s inappropriate for me to comment on myself… Self-reporting is always suspect.” His low-key demeanor; monotone voice; and round, frameless professorial glasses were interpreted by some as signs of timidity. But over time, detractors came to appreciate his competence and maturity. His modesty also won converts. Instead of wearing his customary suits, Schmidt soon donned the Google uniform: khakis and a white or black golf shirt with the Google logo. He was building trust. Schmidt was assigned a small office containing two desks, but before he arrived an engineer looking for a place to park spotted the empty office and moved in. According to Rajeev Motwani, who continued to advise his Stanford proteges, when Schmidt arrived he assessed the situation and quietly took the second desk. “They became office mates. Can you imagine a company where an engineer can move into the CEO’s office? That tells you a lot about Eric, and about the company. He understood the company’s DNA, which is that what you do defines your importance.”

While Schmidt did not believe he had come to Google to fix a company that was broken, he knew its management systems were dysfunctional. He also knew he needed to go slowly in changing them. He saw that Page and Brin wanted to stay focused on technology and products, and had an aversion to intrusive bureaucrats. Schmidt set out to convince the founders and the engineers that good managers would liberate the engineers, reduce bureaucracy, provide an audited financial system that would better allocate resources and provide more transparency, a word the founders often invoked. “He found a way to bring the discipline of running a company but not lose the magic,” said Omid Kordestani.

Deftly, Schmidt shed old practices. The weekly free-for-all meeting of about a dozen executives, recalled Craig Silverstein, “had outgrown its usefulness. Yet it was hard to disinvite people.” So Schmidt simply said the meeting was too unwieldy and canceled it. Because he did not substitute another meeting, “no one felt excluded,” Silverstein said. Only later did Schmidt establish his own weekly management meeting.

There was an adjustment period, particularly for Schmidt, to get used to his two unusual partners. “Larry is shy, thoughtful, detailed, a linear thinker,” he said. “Sergey is loud, crazy, brilliant, insightful. Their personalities are so different. When I first came here I didn’t think Larry could talk, because Sergey did all the talking.” An unofficial part of Schmidt’s mission was to police the wildest ideas of the founders.

On one occasion, Brin proposed to Schmidt, “We should run a hedge fund.”

“Sergey, among your many ideas, this is the worst,” Schmidt said.

“No, we can do it better because we have so much information.”

Schmidt explained the legal complications, and said he talked him out of it.

And Page, for all his mania about efficiency, could be obsessive. A footnote buried at the back of Battelle’s book on search provides an illustration. He writes of seeking an interview with Page and receiving this weird counterproposal:

In exchange for sitting down with me, Page wanted the right to review every mention of Google, Page, or Brin in my book, then respond in footnotes. Such a deal would have been nearly impossible to realize, and would have required untold hours of work on Page’s part. Page and I negotiated for weeks over his proposal… In the end, Page relented.

Like the founders‘, Schmidt’s background was fairly narrow. He was an engineer, with management experience. He had little experience working with advertisers or media companies, which would soon become apparent. But what he did have was maturity and an even temperament. It was said, sometimes by Schmidt himself, that he was brought in to supply “adult supervision.” He was the friendly, wise man with a touch of gray in his neatly parted sandy hair. Eventually, Schmidt became Google’s facilitator, or “catcher,” as he likes to describe his role. “I catch whatever the problem is.” (When I later asked the decidedly non-sports-loving Brin if this description was accurate, he said, “I don’t know what a catcher does.”) The more serious answer, Schmidt added, is that he facilitates decisions that need to be made, establishing management systems, meeting with financial analysts and reporters, serving as Google’s chief link to industry and government. To the founders these were odious tasks, but increasingly important ones. He focused Google on outside technological dangers. “He made us better understand competition in the technology space,” said Marissa Mayer. Google once thought its competition came from search engines like Alta Vista or Overture. “Eric said, ’If we’re successful, Microsoft is going to jump in [to search].‘ Larry and Sergey and I were surprised.”

What could a late entrant like Microsoft do to impede Google? Schmidt, having spent much of his career in opposition to Microsoft, and having supported the government’s antitrust prosecution of the software giant, explained how Microsoft could use its dominant Internet Explorer browser or Windows operating system, on which search engines depended, to cripple Google. Discussions like this, said Mayer, helped persuade Google to build its own applications and, eventually, its own browser, to ensure its independence.

Schmidt also helped focus Google internally. When he discovered that nearly half of Google’s searches were coming from outside America, yet there was no concerted effort to sell ads against these searches, he seized the opportunity. He prodded Omid Kordestani to travel overseas, jokingly saying, “I’ll call you Monday morning at the United terminal and tell you what plane to get on.” Kordestani gained so much weight from eating fast food while on the road that when he returned from his successful trips abroad he would touch his belly and laugh, “Body by United!” Among Schmidt’s signal accomplishments, said Paul Buchheit, was that he kept Page and Brin “focused” and “kept things on track.” Often at meetings, he said, Page and Brin would suddenly change the topic at whim. “Eric would say, ‘No, we need to come to an understanding right now.’”

Soon after Schmidt’s arrival, the troika was romanced by Yahoo’s new CEO, Terry S. Semel, who had come to a Web business after twenty-four years as co-chairman and co-CEO of Warner Bros. Semel came to Yahoo at a time when Internet stocks had plunged; Yahoo’s stock had fallen from a market value peak of $127 billion to $12.6 billion. His arrival aroused the righteous anger of many in the Valley, who were suspicious of “outsiders.” He was dismissed as a representative of old media, as a troglodyte, a Hollywood suit. But the old media warhorse knew how to calm an anxious company, handing out backslaps, compliments. He was a self-proclaimed content guy, and wanted Yahoo to create more of its own, not just license the content of others. And he wanted to sell more ads. He brought in a former ABC network executive, Lloyd Braun, to oversee new content, and an experienced sales team led by Wenda Harris Millard. “Terry brought two things,” said Bobby Kotick, now the CEO of the game company Activision Blizzard, who served on the Yahoo board. Semel was “genetically predisposed to making money,” and if he was presented with one hundred ideas, he could spot the one or two that would make money. “He brought that. And he just brought the maturity and wisdom that comes from experience. He asked the simple question: ‘How do we make money?’”

Semel had huge gaps in his knowledge of the digital world and of Yahoo. He was shocked to learn that Yahoo had lost ninety-eight million dollars the year he arrived. Ron Conway recalled a dinner with Semel on his first day at Yahoo. He said, “Semel did not know Yahoo owned part of Google” in the form of the warrants it banked when it signed its search engine contract with Google. An avid deal maker, Semel became intrigued by Google, particularly after Jerry Yang and David Filo, Yahoo’s founders, urged him, he recalled, to “go meet these guys.”

Semel joined Page, Brin, and Schmidt for dinner in the Google cafeteria. Semel began the discussion: “Help me with something. We’re your biggest customer in the world, right? We both know what we pay you for the whole world is less than ten million dollars, right?”

“Yes,” they concurred.

“So what’s your business?” Semel asked. “You don’t really have a business.”

“We love what we do,” Page and Brin responded.

“Maybe we should buy your company?” said Semel, who thought it was enough of a business to throw out a billion-dollar purchase price tag.

“No, no. We don’t really want to sell our company.”

Semel walked away convinced “one hundred percent they did not want to sell.” He also walked away with assurances from Schmidt that Google was working on “their own technology” to monetize search. Later that year, when Overture approached Yahoo with their patented monetization technology and offered Yahoo a revenue guarantee, Semel signed a contract for Overture to sell its ads. Google was upset, but Semel said that in the first full year, Overture generated two hundred million dollars of advertising revenues. By 2003, Overture separately approached Yahoo and Microsoft with an offer to be acquired. Microsoft declined to bid. (They later reversed course and started up their own search engine.) In the end, Semel acquired two search engines, Overture and Inktomi, and Yahoo dropped its search license agreement with Google. (It was beginning to become clear what a colossal blunder it had been for Yahoo to farm out search in order to focus on building its portal traffic, relegating Yahoo to a weak second place in search. By buying Overture, Yahoo also inherited its April 2002 patent infringement lawsuit against Google.)

Google was growing fast, and the founders worried they’d divide into cliques and lose their cohesive culture. Stacy Sullivan, who had been hired in 1999 as the first employee in human resources, and Joan Braddi, Omid Kordestani’s trusted deputy, were asked to assemble a disparate group of early Googlers to devise a coherent mission statement of core principles the company could embrace. Twelve employees gathered in the cafe, each from a different department. The discussion went in circles for several hours, with Sullivan dutifully writing cliches on a whiteboard. Some wanted the group to enunciate a set of rules: Don’t mistreat people; Don’t be late; Don’t lose user focus; Play hard but keep the puck down. The engineers in the room weren’t interested in codified dos and don‘ts because they reeked of corporate America and offended their sense of efficiency. They also took too long to read. After hours of exasperating discussion, Paul Buchheit blurted, “All of these things can be covered by just saying ’Don’t be evil.”‘

Within a day, engineer Amit Patel, Google employee number 7, wrote the slogan in impeccable handwriting on whiteboards all over Google’s offices. The slogan became viral. When opposing an idea at internal meetings, Googlers would proclaim, “That could be evil.” The slogan became Google’s rallying cry, a way to distinguish itself from other corporations and Microsoft in particular, a way to harness the goodwill Google enjoyed as a free service bringing the world’s information to everyone’s fingertips. To former Intel chairman and CEO Andy Grove, the slogan was too vague to define a boundary, and smacked of self-righteousness. “Do you think Hitler thought he was evil?” Grove said he thought at the time. “It’s too vague, too self-serving, self-defining. ‘I’m not evil, therefore I’m not evil.’”

Eric Schmidt was happy with the slogan, though, and happy with what he was accomplishing at Google. Years later, he sat on one of three canvas-backed directors chairs jammed into the closet-sized conference room dubbed “the directors room” that is next to his office in Building 42. The view from a narrow vertical window overlooked a Google parking lot; the white brick wall to his left held a whiteboard containing mathematical formulas; to his right were several framed newspaper clippings, including one headlined “The Grown-Up at Google.” He admitted to feeling that he had grown as an executive since his days at Novell. “Most people who worked with me ten years ago,” Schmidt said, “would have said, ‘He’s smart, a nice guy, but he can’t lead.’ What is the distinction between then and now? Toughness.”

Back in 2001, his “toughness” was circumscribed. He did not issue orders to the founders, he had to persuade, to prioritize his concerns, and pick his battles. There were palpable tensions-the founders would sometimes loudly explode in meetings that the company was becoming bureaucratic, and Schmidt knew he was the target. These were three strangers working together, and the founders were uncomfortably ceding some management control over their invention, their baby. Schmidt knew the founders did not blame each other. There was rarely a hint of tension between Page and Brin-“In all the years I’ve worked with them,” said John Doerr, who is a Google director, “I’ve never seen them get angy with each other.” But it was not unusual, said another early investor, to witness emotional outbursts by the founders aimed at others, and to see these outbursts fielded and defused by the calm, self-effacing Schmidt. The go-slow, relaxed way that Schmidt approached the founders or changed the management meetings or eventually chased a squatter from his office was at times exasperating to others. While describing Schmidt as “the unsung hero” of Google, Shriram admits, “He had a slow start.” The founders at first, he said, “challenged everything,” and openly wondered: “Could they trust his judgment?” Meanwhile, the VCs were pushing for a revenue plan. And Moritz was skeptical that Schmidt was the right man to bully it through Google.

Schmidt needed help to lower the emotional temperature, and to upgrade Google’s management. That help came in the form of Bill Campbell, then sixty-one, a barrel-chested man known throughout Silicon Valley as “the coach.” At one time Columbia University ’s head football coach, Campbell had also been a senior executive at Apple and a CEO of several Valley companies, including the Go Corporation and Intuit, the now-thriving online software company that provides financial services to individuals and small businesses and where he worked side by side with the founder. John Doerr knew that Campbell felt an obligation to give back to a Silicon Valley that had made him rich enough to own his own Gulfstream IV His discretion is legendary, and part of his allure. Aside from a profile in the magazine of his alma mater, the only other time he has ever been profiled was in a superb 2008 Fortune magazine piece by Jennifer Reingold titled, “The Secret Coach.” His many friends offered tributes but Campbell would not sit for an interview. A Google search retrieves very few Campbell press mentions.

Doerr served on Campbell ’s Intuit board, and had called on him to mentor young leaders of Valley companies. Regularly, Campbell would join fifteen or so of Doerr’s dot-com CEO clients over dinner. The sessions are dubbed Camp Campbell, “and I’m not allowed to attend,” said Doerr, who described Campbell “as one of my two best friends.” In late summer of 2001, Doerr reached out to his friend to help Schmidt and the founders. “I felt it was an opportunity worth Bill’s time,” he said. “Eric had not been CEO on a scale Google would become. Larry and Sergey and Eric needed to be coached.”

In the Valley, Coach Campbell is a magnet for friends old and new. Still the chairman of Intuit, he is also the colead outside director at Apple, and one of Steve Jobs’s few confidants. On weekends and evenings, when big college or professional football and basketball games are televised, Campbell can often be found with a group of buddies in downtown Palo Alto ’s Old Pro sports bar, a Stanford student hangout he owns. He’ll have a table in the middle of the pub piled high with hamburgers, French fries, pizzas, and his preferred drink, Bud Lite. Just under six feet tall, Campbell is easily spotted, and not just by the Kennedyesque thatch of gray hair that sprawls across his forehead: he’s the guy in constant motion, moving about the room dispensing high fives, fist pumps, hugs, and baseball caps. He sports an oversized Columbia 1962 ring and weighs just three or four pounds more than he did as a college linebacker. At the Old Pro, he’s garrulous. Outside, he’s allergic to interviews with reporters, and even with friends he sequesters conversations he has with other intimates. His discretion is well known, and part of his allure.

In a rare 2007 interview with two McKinsey amp; Co’s partners for the McKinsey Quarterly, Campbell said something that is music to engineers at places like Google: “empowered engineers are the single most important thing that you can have in a company.” He was talking about a tech company, and he went on to say that to foster innovation “you’ve got to be careful that you don’t make engineers beholden to product-marketing people. For me, growth is the goal, and growth comes through having innovation. Innovation comes through having great engineers, not great product-marketing guys.” He also said that smart tech executives should spend entire days “doing nothing but reviewing projects. A whole day, with the whole management team, so that we can clean up those projects, clean out the ones that aren’t going to be good, and take the bodies that are recovered and put them on the projects that look like they have the best prospects.”

Explaining Campbell ’s role as a bridge builder at Google, Moritz said, “Bill’s contribution has been to take the emotion out of decisions. He’s more objective. He’s seen as a neutral source and a fair man.” The objectivity was needed, he explained, because: “You had two founders who were in their twenties and Eric was twenty years older, and you had to make that relationship work between people who did not know each other. It was natural that the founders would be suspicious. There were bumps at the beginning that Bill helped smooth over.” The biggest bumps, another Google insider said, were not between Schmidt and the founders, but with two venture capitalists on the board, Doerr and Moritz: “Eric had a busy-body board. The impression the board had was that Larry and Sergey were not focused. When they got Eric in, now they wanted to micromanage him.” They wanted Schmidt to push harder to monetize search. Doerr and Moritz “were both impatient,” said Shriram, who had served as a bridge between the founders and the board and gratefully handed this role to Campbell.

“I would sit with Larry and Sergey and try to figure out the things they more or less wanted from Eric,” recalled Campbell. Then he’d sit with Schmidt. He performed this particular function for three years, until 2005. Looking back over the life of Google, these sessions where Campbell performed as both a psychologist and a coach loom especially large. The company could have imploded. On Campbell ’s shoulders rested a complex problem. He had to earn the trust of the founders, Schmidt, the board, and Google executives. He had to help put management systems in place, recruit executives, suggest financial controls and the structure of board and management meetings.

One would expect an ex-football coach to be an in-your-face, blustery, and threatening personality. And Campbell sounds like he would be, for he has a deep, hoarse voice that seems the product of yelling all day. But he is self-effacing, quick with a quip, more listener than talker. Schmidt likens Campbell ’s ability to listen to that of a shrink, adding, “When he walks into a room, everyone smiles. I’ve never seen that.” But he also said that “shrinks are seen as passive,” which is why he believes the “coach” appellation is more accurate. “A coach says, ‘Let’s go!”’

Campbell laughs when told that some refer to him as Google’s shrink and offers this modest explanation of his role: “Sometimes when you are in a big and complex organization, your behavior is noted. And if your behavior is sometimes out of line, sometimes it’s me that will say, ‘Move it a little bit in this direction or that direction. Not much.’ Shrink would not be the right description. It’s more coaching people into the right direction.”

It did not take long for Campbell to win over Schmidt and the founders. “Bill took me under his wing,” said Schmidt, who refers to him as “my consiglieri.” Campbell is so valuable at Google, Page said, because “he has the unique ability to be a warm person, one that everyone can relate to, but also has the experience of actually running a company” Brin smiles when asked about Campbell and speaks of his “especially high EQ,” emotional intelligence. A principal criticism of Brin and Page is that they, like many of their engineers, lack EQ. Did he, I asked, think they lacked EQ? “We are ranked far below Bill Campbell,” Brin conceded.

Two Campbell ideas embraced by the troika were an executive management meeting with their direct reports and Campbell that consumes several hours every Monday, and project review meetings with engineers that occupy much of Tuesday, Wednesday, and Friday afternoons. Campbell regularly holds one-on-one sessions with other senior executives to offer evaluations, mediate management disputes, hold hands. In other companies, Brin said, politics become excessive when you get to be large. “One of the reasons we’ve been able to avoid politics is Bill Campbell. When issues arise, he’s willing to intercede.” One day I’d scheduled an interview first with Brin and then Campbell. But Brin had arrived late and we backed into Campbell ’s allotted time. We were in the small conference room a few doors from Brin’s office in Building 43 and Campbell ambled in for his scheduled interview. Brin smiled and instantly rose from his chair and the two men hugged.

Campbell participates in the Monday executive management meeting, discusses the agenda that Schmidt sends out to participants specifying the decisions they need to discuss at the meeting. He acts as envoy, visiting YouTube headquarters with some frequency in the first half of 2008 to find ways to generate revenues from the popular video site and improve communications between the two companies. Campbell is the only outside person ever welcomed into Google’s inner sanctums. In addition to executive meetings, he attends board meetings. “He’s closer to us than the board,” said David Krane, director of global communications and public affairs. “Eric said management is a marathon, not a sprint. It’s stressful,” Page said. “Bill plays an important role of keeping us all healthy and interacting.”

Why does he volunteer to spend approximately two full days a week on the Google campus? “This is family for me,” he said, a catch in his voice. “These are people I love dearly. I’ve been doing this since late 2001. I probably get as much out of this as everybody gets out of me. The joy of participating at a company that is at the leading edge of anything going on in the personal technology space. It’s centered here. There’s innovation daily. They think about changing the world.” He refuses to be paid more than a dollar a year; in 2007, his compensation was increased when he was given a reserved parking space on a campus where spaces are usually filled by 10 a.m. Brin said he and Page had to insist on compensating Campbell with Google stock options. The fact that Campbell plays such an atypical role at Google suggests that in addition to coach or shrink he can also be described as a babysit ter. The fact that Google needs one is a reminder of its youth.

TO BETTER UNDERSTAND Bill Campbell, Jr., roll the reel back to Homestead, Pennsylvania, the small steel town near Pittsburgh where he was born on August 31, 1940. His mother, Virginia Marie Dauria, was a home-maker while his father, William V Campbell, worked the night shift in the steel mill and taught high school physical education. He became the basketball coach at Duquesne University, where he was a close friend of the football coach Aldo T “Buff” Donelli, then the principal of the local high school and finally the school superintendent of the district. Bill’s mom stayed home to raise him and his younger brother, Jim, who went on to become an All-American wide receiver at the Naval Academy. Bill was an honor student at the public high school, and though he weighed only 175 pounds, he was voted All Western Pennsylvania as an offensive guard and linebacker. What was his football talent? “Speed. And I would hit ya!” he said with a laugh. “When colleges came around, I couldn’t understand why guys who weren’t as good as I was were going to Penn State and Pittsburgh. It pissed me off. So I got recruited by the Ivy schools.”

Bill chose Columbia, where Buff Donelli, who had gone from Duquesne to Boston University, had just replaced Lou Little, the Columbia football team’s longtime coach. Bill received a scholarship and played middle linebacker on defense and offensive guard. He went on to star and captain the 1961 Columbia team that tied Harvard for its first, and only, Ivy League football championship. He hurt his knee that year, which ended his playing career and earned him a 4-F draft deferment. When he graduated in 1962 with a degree in economics, he decided to stay at Columbia to get a master’s degree so that he could stay involved with football. He was studying economics, but “I wanted to be a coach,” he said. Donelli appointed him assistant freshman football coach, and he doubled as a resident adviser. His second year, he scaled back graduate studies to part-time in order to serve as the offensive and defensive end coach on the varsity football team.

His career goal was to become a head coach. “My dad was a coach,” he said. “There was nobody I admired more than my dad and Buff Donelli. These were the two role models I had. I wanted to be Buff Donelli. I wanted to be Bill Campbell, Sr. My dad was so respected in town. He had been the coach, the superintendent. He just had this way about him. He could unite anybody.”

Bill had a summer job after his second year as a coach at Columbia and eagerly anticipated year three, starting in September 1964. But he received a notice from his Pennsylvania draft board to report for a physical. Expecting to again be declared 4-F, he was surprised when he passed. He was even more surprised that “they took me in the service that same day.” He was swiftly dispatched by train to Fort Knox and never got back to collect his belongings at Columbia. For the next two years he was an army private stationed at U.S. bases, landing at Fort Gordon, Georgia, where he ran the athletic program and was both the assistant football coach and the quarterback.

After being discharged from the army, Campbell returned to Columbia as the coach of the freshman football team, and studied for a master’s degree in education. The next year, he became Donelli’s offensive line coach and thought he was on his way to head coach-until Donelli chose to retire. The new coach brought in his own assistant coaches, and Campbell was out of a job. He found a new job as linebacker coach at Boston College, where he stayed six years, rising to defensive coordinator. He returned often to New York, where he met his future wife, Roberta Spagnola, a Columbia University dean, on a blind date. When Columbia called in 1974 and asked him to return as head coach, Campbell jumped at the chance. He and Roberta married in 1976, and would have a son and a daughter.

Over his six years at Columbia, Campbell had a record of twelve victories, forty-one defeats, and one tie. He blames his losing record on his devotion to the players as men rather than as athletes. He was a nurturer. “I really felt like I committed to these kids. My view was more father coun selor and adviser… I wanted these guys to achieve. I wanted them to go to work for Procter and Gamble or IBM, if that’s what they wanted. I took great pride in getting summer internships for them at Merrill Lynch and Salomon Brothers. I was more engaged with them. I often think that had I been less worried about that and more dispassionate about playing, maybe I would have been better.” If he had to do it over, though, he says, “I wouldn’t change. I couldn’t change.”

After leaving Columbia, he became a sales and marketing executive at J. Walter Thompson, where he stayed until Eastman Kodak, a client, recruited him to be its director of marketing. Then, in 1983, John Sculley, recently appointed the CEO of Apple, heard about Campbell from a relative and began courting him for the job of vice president of marketing. He clinched the sale by demonstrating for Campbell the revolutionary Macintosh computer, which Apple would introduce in 1984. “It would be pretty unusual today to hire a football coach to be your VP of sales,” Sculley later told a reporter. “But what I was looking for was someone who could help develop Apple into an organization.” Campbell took over sales as well as marketing just months after he joined Apple, and set about firing the consultants and most of a sales force that “wore polyester pants and gold chains.” He said he replaced them with recent college graduates, half of them women, and all hungry to succeed. “What I learned from coaching,” he said, “is that if your guys are not as big and fast as the other guys, you’re fucked!”

Campbell ’s boldness appealed to the ever-rebellious Steve Jobs. The two men bonded. By 1984, said Campbell, “Sculley and Jobs were going at each other already.” Although Jobs had recruited Sculley to bring professional management to Apple, he came to think he was more interested in marketing, including marketing himself, than in Apple products; Sculley believed Jobs wanted an acolyte, not a CEO. Nevertheless, Campbell earned the rare distinction of being able to both befriend Jobs and command Sculley’s respect. Before Sculley succeeded in pushing Jobs out of Apple in 1985, Campbell warned him it would be a huge mistake. Tensions flared between Campbell and Sculley, and in 1987 Campbell was put in charge of Apple’s Claris software division, with the intention of spinning it off as a private company with Campbell at the helm. But with Claris thriving, Sculley changed his mind. Campbell left rather than remain as a division head under Sculley.

At the recommendation of John Doerr, the Go Corporation hired Campbell as their CEO. The company was an early pioneer in pen computing-too early, it seemed, and when the market didn’t respond, Campbell unloaded the Go Corporation on AT amp;T, in 1993. He next became CEO of Intuit when Doerr suggested to founder Scott Cook that Campbell would be a great partner. Four years later, he moved up to chairman of the board. On the eve of Steve Jobs’s return to Apple in 1997, he asked Campbell to join his board.

Today Campbell serves as a mentor to some of the Valley’s most successful entrepreneurs, from Marc Andreessen to Steve Jobs, whom he walks and talks with most weekends in Palo Alto, where they are neighbors. He estimates that he spends about 10 percent of his time on Apple business, about 35 percent on Intuit business, an equal amount at Google, about 10 percent as chairman of the board of Columbia University, and the remainder on assorted activities. He said he has donated his Google stock to the foundation he established to make charitable gifts to his hometown, among others. He donated money to his Homestead high school for a new stadium, scholarships in his father’s name for student athletes, a new gym named for his brother, who died of lung cancer in 2006, and Apple computers for the school. In the fall, he coaches sandlot football for eighth-graders from St. Joseph ’s School of the Sacred Heart in Atherton, California; in the spring, he coaches the eighth-grade girls in what’s called powder puff football.

He doesn’t have a lot of enemies. Marc Andreessen said of Campbell, “He’s been incredibly important in the Valley. Business is changing so quickly,” and less experienced entrepreneurs turn to Campbell for guidance. “Bill has been a model mentor. When he’s not in the room, he’s still there because people ask, ‘What would Bill say?’”

IN SCHMIDT AND CAMPBELL, Google had executives who could work with the founders and mentors the whole organization to work together. Now it needed to recruit senior executives. With an assist from Campbell, one of Schmidt’s initial targets was Sheryl Sandberg, who had just concluded her service as chief of staff to treasury secretary Lawrence Summers. The Clinton administration was winding down, and Sandberg, who was just thirty-one, was much in demand.

Sandberg has short dark hair, an angular face that is softened by a bright smile, and an engaging manner that makes strangers feel comfortable. She was the first of three children born to Adele and Joel Sandberg, she then a professor of English and other languages, he an ophthalmologist. The Sandbergs moved to Miami from Washington, D.C., when Sheryl was three, and although Sheryl was considered the smartest student in her public high school, she wasn’t a bookworm; from childhood, she has been popular. For college, she left Florida and went to Harvard and in her junior year there took a course from Lawrence Summers, then the rising star of the economics faculty. At the end of the semester he invited his five best students to lunch at the Harvard Faculty Club and offered to serve as their senior thesis adviser. Sandberg accepted Summers’s offer-“He changed my life,” she said-and went on to win the John H. Williams Prize as the top graduating student in economics. When Summers was appointed chief economist at the World Bank, he brought her in as his special assistant.

Sandberg had a particular interest in health care, and in the early nineties went for a time with a team to India to work to alleviate leprosy and AIDS. Shaken by the poverty and suffering she witnessed, she vowed that she “was only going to do things that were good for the world.” She wanted to work in nonprofits or government but felt she required a broader education. She stayed at the World Bank two years before deciding she would go back to school. “I come from a Jewish family,” she laughed. “My dad’s a doctor. You had to have a graduate degree!”

Accepted at both Harvard’s law and business schools, she chose the latter, believing she needed a better understanding of how organizations worked. Between her first and second year she got married. Though the marriage lasted only a year, she graduated near the top of her class as both a Baker and a Ford scholar; with her former husband in Washington, D.C., she fled to the West Coast, where she joined McKinsey amp; Company in California, working on health care. McKinsey gave her no more joy than her marriage. “You don’t do anything,” she explained. “You just tell other people what to do.” She left after one year.

Summers was then deputy treasury secretary under Robert Rubin in the Clinton administration. The two had kept in contact and, again, he recruited her as his special assistant. For the next four and a half years, she worked for Summers; when he was elevated to treasury secretary she became his chief of staff. But when the second Clinton term ended in January 2001, she had to move on. Washington had taught her some surprising things. “Over the years,” she said, “I got less naive. I no longer thought, The private sector is bad. The public sector is good.” At Treasury, her most “exciting” meetings had been with technology companies. In America, she believed, “economic growth was all technology driven.” She decided she wanted “to go and be an operational executive in a tech company, a make-the-trains-run job.”

In early 2001, she moved out to San Francisco. Her sister lived there, and it was the technology capital of the world. She took time to clear her head, and in any case, with the dot-com bust still reverberating, it was a difficult time to seek a job. She signed up for cooking classes and relished her free time. She was offered an executive position by eBay, but she had her sights set on Google. “When I came out of the government, I wanted to do something that I believed in,” she told me. “I went to Google because Google had a higher mission, which is to make the world’s information freely available. But they weren’t offering me a job.”

Schmidt talked to her in the fall of 2001, and like all top applicants, she met with Brin and Page as well. When Schmidt offered her a position in late 2001, she was excited, but on closer inspection wasn’t sure it was a real job. “I was supposed to be a business unit general manager, but there were no business units, and therefore nothing to be managed,” she said. Schmidt “called me every week and said, ‘We’re profitable this week too!”’ Friends advised her to “work for a real company,” one that earned steady profits. “I met Eric and said there is no job. He looked at me and said, ‘You’re looking at this the wrong way. None of this matters. Growth matters. Get on a rocket ship and all things take care of themselves.’”

She was employee number 268. Her title was business unit general manager, even though, as she had noted, there was no business unit. There was also no CFO, which is perhaps why Eric Schmidt assigned her a top secret mission, kept even from their venture capitalists, to investigate a potential round of private financing to pump money into a four-year-old company that had yet to have a profitable year. Among the people Sandberg spoke with was Mary Meeker, the author of the seminal Internet report at Morgan Stanley. Their discussions, Meeker said, made her take greater notice of Google. “Before Sheryl arrived,” said Meeker, “they were so quiet and private. She was part of a push to bring people in.” Months and many meetings later, Sandberg made a PowerPoint presentation to the founders and Schmidt. The consensus of the people Sandberg consulted was that Google should be valued at one billion dollars. The consensus of the founders and Schmidt was that they would not pursue more investment capital because this valuation was, she said, “a total insult.”

The project was shelved. “I needed another job. I knew I wanted to work for Omid Kordestani, who runs all business and operations. We were launching AdWords CPC.” Kordestani planned to expand the AdWords staff from four to eight. “Omid said to me, ‘I need a tractor. You’re a Porsche. Why do you want this job?’”

She thought their ideas for selling ads were innovative. If they worked, they would be efficient-by cutting out sales teams-and bold, giving advertisers an incentive to make the ads more relevant. Advertisers would rank higher on the search results page based not just on the price they bid per keyword, but on the number of clicks their ads received. The more clicks, the lower the price, and the higher they would rank.

Advertising, Schmidt said, had not been viewed “as a priority” by the founders-nor, according to Doerr, by Schmidt. And, indeed, Schmidt had become convinced that since Google had succeeded in building the best search engine, the money would follow. But by 2002, at the helm of a four-year-old company that had yet to have a profitable year, Schmidt knew it was time to focus on money. But he also knew Page and Brin had definite ideas about what was “evil.” Senior software engineer Matt Cutts recalled that a credit card company (it was Visa) offered five million dollars to put a link to their credit card logo on the bottom of Google’s home page. But Page and Brin wouldn’t budge, nor would they relax their strictures against advertisers paying for search results. “Google was really trying to do right by their users,” said Benjamin A. Schachter, then the senior Internet analyst for UBS. But they weren’t building a profitable business.

Moritz was becoming restive, openly wondering if Schmidt was tough enough. A Google insider with direct knowledge said that in 2002, Moritz pressed for Schmidt to be fired. Another insider said the unhappiness with Schmidt was at first shared by others who also worried that he wasn’t tough enough, that he was moving too slowly to galvanize a management team, to challenge the founders, and most especially, to find a revenue stream.

Schmidt remained calm, at least outwardly. By late 2001, he knew of the effort at Google that Sandberg was now working on to devise the new version of AdWords, the advertising program associated with search. In AdWords as it worked through 2001, advertisers paid Google the old-fashioned way, based on a cost per thousand (CPM) whether the searcher clicked on their ad or not. What Google was quietly exploring was switching to a cost-per-click model, an idea that built on the Overture model. In addition to Sandberg, Omid Kordestani assigned Salar Kamangar, the author of the original Google business plan, to serve as a bridge between the engineering and the sales team as they improvised.

This began a long and intense period of brainstorming. The team liked the idea of charging by the click, thinking it was a way they could farm out not just search, as they had done with Netscape and Yahoo, but also advertising. “We knew we needed a lot of ads, and to have a lot of ads we also had to syndicate,” Kamangar said, performing the search function for sites like Yahoo but also selling ads for them. He knew that Page and Brin would resist allowing advertisers to pay for placement within search results. He also knew advertisers were wary. The CPC model was associated with low-quality ads that were harder to sell and were known as “remnant advertising.” Advertisers like to determine where and when their ads appear, and if they allowed a company like Google to put their ads on other Web sites, and allowed the Web sites to choose the times they would appear, the advertiser would lose control. Was there a system to serve both users and advertisers?

For months they came up empty. Members of the team remember Kamangar walking about with two fingers pressed to his lips, muttering, “I’m thinking, I’m thinking.” One day, he said, a “lightbulb went off.” What if Google combined the cost-per-click model with a measurement of whether users found the ad relevant? Google engineers could come up with an algorithm to measure the quality of the ads, he thought, assuming that more clicks meant users liked the ads. To sell them they could use what economists call a Vickery Auction, an idea suggested by a colleague, Eric Beach. In a Vickery Auction, named after William Vickery, the twentieth-century Canadian economist and Nobel laureate, after Google set a minimum bid price per keyword, the advertiser bids, say, fifteen dollars for a keyword. If the next bid is ten dollars, the winner only pays one cent more than the second highest bidder, saving nearly five dollars; the second-place bidder pays a penny more than the price bid by the third, and so on. The advantages for Google were many. By charging per click, Google could syndicate its ads-sell them on other Web sites as well as on Google search. The more ads it sold on different platforms, the more data Google collected, and thus the more reliant on Google advertisers became. And Google could automate the entire system, minimizing the size of its sales force.

The advantages for advertisers were manifest. They knew they were not being gouged, because they only paid a penny more than the next highest bidder. They benefited by being charged only when the user clicked on the ad. This gave them an incentive to produce a better ad because better ads produced more clicks, which lowered their cost per click. And by charging per click, Google opened online advertising to many small businesses who normally had nowhere else to turn but the Yellow Pages. By allowing Google to syndicate ads, advertisers were achieving the online equivalent of one-stop shopping offered by network television, whereby ads appeared on hundreds of local stations. And because the system was automated, advertisers were spared the expense of a monitoring system. They would simply transmit to Google their keywords, their bid per keyword, their monthly budget, and their billing information. And then using Google Analytics, they could monitor the results online.

Page and Brin made a major amendment to the new AdWords before it was inaugurated in February 2002. At the annual technology, entertainment, design (TED) conference in Monterey, they engaged in conversation with the Israeli entrepreneur Yossi Vardi. Vardi is a bear of a man with a walrus mustache and a friendly, even impish manner. His company started ICQ, the Internet’s first instant messaging system, and sold it to AOL for four hundred million dollars. He and the Google founders discussed search ads-how to make them unobtrusive and yet relevant to users. Vardi suggested that they could use two-thirds of the page for search results and wall off the text ads from the search content the way a newspaper walls off ads. They could do this by placing a thin blue line between the search results and a smaller gray box on the right-hand side of the page containing the text ads and links to the advertiser. Users could either click on the link or not. Vardi’s idea, Brin recalled, was the genesis for the way ads were displayed. Page and Brin decided the ads should be small, a couple of lines long, imposing a limit of ninety-five characters, and insisting that they be informational.

It was unclear when the new AdWords was introduced that it would be what it became: a Google money machine. “The AdWords is brilliant because it allows you to scale the advertising solution to what you need,” said former Microsoft executive Nathan Myhrvold. It democratizes advertising, allowing Google to use it for either small or large advertisers. It was also, Myhrvold believes, pirated from Overture. The rival search engine thought so too, and later that year filed a patent infringement lawsuit against Google.

A year later, a second money gusher-AdSense-would spring from the CPC model. At the time, Paul Bouchet was developing Gmail and working on software to match words sent in an e-mail with keywords selected by advertisers, allowing small text ads to instantly appear. Brin wondered why they couldn’t apply this innovation to a new program that would help bloggers and any Web site make money. This idea would be called AdSense. If a reader was looking at an analysis of computers on a Web site like Engad get, an HP or a Dell ad could appear. Similarly, readers of a story about the law in an online newspaper might see a law firm’s ad, while people looking at a Web site devoted to pancreatic cancer could see ads for pharmaceuticals. Google would serve as the matchmaker, delivering the advertising and sharing the revenues. As with AdWords, the advertiser would pay only when the ad received a click. And as AdWords democratized advertising, luring small advertisers online, so AdSense would become a way for Web sites to generate income. The effort was led and architected by Susan Wojcicki, vice president, product management, who later received the prestigious Google Founders Award-paying about twelve million dollars-to honor her efforts. AdSense, Danny Sullivan told USA Today, “basically turned the Web into a giant Google billboard. It effectively meant that Google could turn everyone’s content into a place for Google ads.”

Eric Schmidt recalled how Brin lobbied him for money to market the program. “He and an engineer developed a system of showing ads on people’s blogs or Web sites. They came to show this to me. It was not an exciting demo. And Tim Armstrong’s sales guy is assigned to help them out. Now we’ve got three people out of control! So Sergey comes in and said, ‘I need to buy inventory to make this happen.’”

“How much?” asked Schmidt.

“I need a million dollars,” said Brin.

“We don’t have a million dollars!” said Schmidt.

“Sure we do,” said Brin.

“I didn’t give a precise answer”-a couple of hundred thousand dollars, said Schmidt, chuckling. (Susan Wojcicki remembers that he alloted them a marketing budget of two hundred thousand dollars.)

Weeks later, Schmidt asked Brin, “Sergey, how much money did you spend?”

“A million and a half dollars,” said Brin.

“Sergey, you said one million!”

“No, you didn’t give me a precise figure!” said Brin.

“What does that tell you about them?” Schmidt said of the founders. “He had the idea. He assembled the activity. He figured out who his opposition was-which was me, in a friendly way. He told me about it because he wanted my support. And he evaded my guidance. And as a result, built a multimillion-dollar business.” (By 2004, AdSense would produce about half Google’s revenues.) Schmidt paused to chuckle again, then said, “You see why I work with these people!”

The chuckle is appropriate, for Google would not have succeeded without a measure of luck. As Larry Page confessed to a Stanford class, discovering the advertising formula that would work “probably was an accident more than a plan.” A reminder that timing, serendipity, luck-not just a smart strategy or brilliant execution-sometimes determines success. With programs like AdSense, Google did not aim to build a huge Web-based political constituency, but it did. As its advertising dollars rained on Web sites, Google was hailed as a benefactor. Not only was Google not evil, it was beneficent. Google would call these content Web sites partners, and give them about two-thirds of the ad dollars, with Google pocketing the rest. Many small businesses would be discovered and thrive. It was largely overlooked at the time that automated AdSense cut out the advertising middleman. Or as Wojcicki told me, “It changed the way content providers think about their business. They know they can generate revenues without having their own sales team.” In the online world, Google was potentially dis-intermediating not just the media buying agency but the sales forces of content companies.

AdWords and AdSense would solve the mystery of how Google could monetize its search engine. For the first time, in 2001, Google turned a profit: $7 million on revenues of $86 million. The next year, revenues more than quadrupled to $439 million, and profits jumped to $100 million. Google’s search index included three billion Web documents. Not surprising, among the top ten searches on Google in 2001 were these: World Trade Center, Osama Bin Laden, anthrax, and Taliban.

In 2002, Urs Hölzle, who is now Google’s senior vice president of operations, was undecided whether to return to his tenured faculty position at the University of California at Santa Barbara. AdWords made that decision simple. Google had finally found a way to make money. “Now we could fund all these things we couldn’t fund before,” he said, “2002 was when we said, ‘We can afford to spend more on machines!’” This was also the year Google discovered, as Eric Schmidt would tell me several years later, “We are in the advertising business.” Ignited, the Google rocket took off.

CHAPTER FIVE. Innocence or Arrogance?

(2002-2003)

Eric Schmidt now fully shared Page and Brin’s faith in Google’s ascendancy. What set Google apart, he came to believe, is that while people like him always assumed “Google would be an important company, the founders always assumed that Google would be a defining company.” The scope of Google’s ambition was presaged by something Page said when he and Schmidt spoke before a Stanford class in 2002. “If we solve search, that means you can answer any question,” Page said. “Which means you can do basically anything.”

Their audacity was displayed in May 2002 when Google made its most ambitious-and riskiest-deal yet. With its new AdWords in place, Google was eager to start syndicating ads, and even though it was doing about 150 million searches a day, it wanted to do more. AOL would be their vehicle. Because AOL later went into a tailspin, it’s often forgotten how dominant the company was. Webheads would sneer that using AOL was “the Internet on training wheels.” Yet it was AOL’s user-friendliness that helped popularize the Web-and which attracted thirty-four million paid subscribers in 2002. For Google, AOL was a ripe target, a giant portal with an enormous audience. But search rival Overture was doing AOL’s searches and advertising, and besides, as AOL’s then executive vice president, Lynda Clarizio, said, “No one knew who Google was.” Overture’s contract ended in May 2002, and the founders were determined to snare it.

“I want us to bid to win!” Page declared at an executive staff meeting, according to Susan Wojcicki.

“You’re betting the company if you do that,” Kordestani warned.

“We should be able to monetize the pages,” Page responded. “If not, we deserve to go out of business.”

With $10 million in the bank, Google promised AOL 85 cents of each advertising dollar collected, and guaranteed a minimum annual payment of $150 million in revenues. “We could have gone bankrupt,” Brin said.

“Overture offered more money,” said former AOL president Robert Pittman. But Google offered a better search engine, a more inventive approach to reaching smaller advertisers, and higher minimum guaranteed payments.

Google won the bid, to the surprise of many industry watchers. It was a milestone, “probably the biggest” deal Google has ever done, Brin said. “Every time you did a search on AOL, it said ‘Powered by Google,’” recalled Nick Grouf, CEO of Spot Runner, an Internet based advertising agency. “By cutting a deal with Google, what AOL did was surrender the front door to its walled garden” of consumer data. The deal “affected how we thought about doing partnerships and deals,” said Tim Armstrong. And the partnership would become a huge moneymaker for both Google and AOL.

The deal enlarged Google’s appetite. Schmidt remembers the day in 2002 he walked into Page’s office and Page surprised him by showing off a book scanner he had built. It had been inspired by the great library of Alexandria, erected around 300 B.C. to house all the world’s scrolls. Page had used the equivalent of his own 20 percent time to construct a machine that cut off the bindings of books and digitized the pages. “What are you going to do with that, Larry?” Schmidt asked.

“We’re going to scan all the books in the world,” Page said. For search to be truly comprehensive, he explained, it must include every book ever published. He wanted Google to “understand everything in the world and give it back to you.” Sort of “a super librarian,” he said. “Where are all the books?” Page asked.

“The Library of Congress,” Schmidt said.

“Good, we’ll do a deal with the Library of Congress!” Page said.

“You’re Larry,” Schmidt said. “Nobody gives a shit about you.”

“Well, how can we get to the Library of Congress?” Page asked.

They arrived at the answer simultaneously.

“We call up Al Gore,” Schmidt said. “He’s friends with the guy who’s in charge of the Library of Congress.” At the same time, Page proposed to his alma mater, the University of Michigan, that Google would pay to digitize the seven million books in its library. After Page had the university’s consent, he flew to Washington to make a deal with the Library of Congress. Google would soon sign up Stanford, Oxford, and the New York Public Library, among others. They established an internal team under the joint direction of Dan Clancy, who had a Ph.D. in artificial intelligence and had worked at NASA, and Adam Smith, a former investment banker who had served as vice president of new media at Random House. Clancy offered another reason to support the effort: to promote reading among young people who did their reading online. “I sampled college students and asked, ‘How many of you went to a library in the last year?”’ Only half raised their hand. “There’s so much information on the Web that students accept secondary sources.” He hoped to combat this. Adam Smith saw their effort “as a book-promoting vehicle,” bringing the work of authors to a wider audience. About 90 percent of the more than twenty million books ever published were out of print, and Sandler and Smith had a goal of digitizing ten thousand books each day.

But in their rush to fulfill this mission, Google did not first pause to extensively consult with American publishers and authors who owned the copyrights to many of these books. “If we had done that,” Brin said, “we might not have done the project.” Because they didn’t do that, Google would later have a lawsuit to contend with.

THE FOUNDERS USUALLY FOCUS on different things. Page devotes more time to how consumers interact with Google, hence his chosen title, president of products. Brin spends more time on technology, hence his title, president of technology. The titles can be misleading, because “we overlap a lot,” said Brin. It’s also inexact because each founder has unpredictable interests or quirks. Brin, for example, thrusts himself into the middle of strategy sessions for many business negotiations, which is welcomed by his fellow executives. He is also a principal proponent, according to vice president of people operations Laszlo Bock, of Google’s massage programs and child care centers, while Page is more assertive about which engineers to hire, the food served, and the size of cafeterias. Within Google, this sometimes creates confusion. For example, Bill Campbell, who is in many of the key meetings, said he believes Brin is most focused “on the end user experience” and that Page is more focused on “the product development process to get there.” On the other hand, employee number 1, Craig Silverstein, thinks Brin “brings more of an operational focus.”

“We’re pretty lucky because we have both of us plus Eric,” said Brin. “We are able to choose the things to focus on. It’s a great luxury.” Because “I can’t escape being a bit of a tech nerd,” Brin said, he spends a lot of time on technology. But so does Page. “These things are subtle. We overlap a lot.”

What both bring, said Nick Fox, the group business manager, ads quality, is “an ability to push you down paths you wouldn’t have thought about before.” When Fox first joined Google and watched Page and Brin at TGIF, “I thought they must be two guys who had a great idea and got lucky.” But he quickly concluded they always had “great insights,” and an ability to provoke thought. He offers this example: They were in a meeting discussing new ways to advertise with search and how to move beyond the text ads Google relied upon. Brin was holding a plastic bottle of water, and said, “Let’s turn this bottle upside down. If I’m a butcher and I’m trying to get customers into my store, maybe a text ad is not an effective way to get customers into my store. But maybe if I was able to film a video of myself showing all the fresh food and great prices and I’m just talking about my store with a lot of passion, maybe this is the way I can get people to come into my store.” It was not the typical auto dealer ad announcing a President’s Day sale, Fox said. “You don’t think about ads of people talking passionately about their store.” For various reasons, such ads are still not part of search, but to Fox that is less important than the ability of the founders to “turn the way people think about something upside down.”

Alissa Lee encountered this upside-down approach. In the first five years of Google’s life, one or both founders insisted on interviewing each applicant. Brin was introduced to a Harvard Law graduate, Alissa Lee, by David Drummond, who was the company’s outside counsel in the late nineties and became Google’s corporate counsel in 2002. Lee was a contracts lawyer, and in the course of her interview, Drummond remembers, Brin said, “‘I really need to see how you will practice law. I need you to draw me a contract. Don’t spend a lot of time on it. Draft it and send it to me and to David so we can review your work.’” And then came the Google test: “‘I need the contract to be for me to sell my soul to the devil.’” Brin remembered his request and recalled: “I just figured that if I’m interviewing an attorney I should validate their work product.”

Lee remembered repeating the question, not sure she had heard it correctly. Brin told her he wanted the contract e-mailed to him in the next thirty minutes. “Amid the surreal oddity of it all,” she recalled, “I had forgotten to ask him all sorts of lawyerly questions, like what sort of protections he needed, what conditions he wanted to attach, and what he wanted in return for his soul. But then I realized that I had missed the point. He was looking for someone who could embrace a curveball, even relish it, and thrive in the process of tackling something unexpected. I’m not sure he actually looked at what I sent him, but something in my crazy sale agreement or in my response must have satisfied him.”

“She was a clear hire,” said Drummond. Today Lee is Google’s associate general counsel.

John Doerr encountered a similar upside-down approach when Page asked him what he thought of Google’s buying a Boeing 767.

“I think that’s a terrible idea,” said Doerr.

“Why?”

“For the ethos and egalitarian nature you want to have in the company,” Doerr answered, “you’re never going to get away from the public perception of two Silicon Valley entrepreneurs owning a personal 767.”

“Look at the numbers,” Page said, showing Doerr a sheet of paper revealing that for seven million dollars they could purchase the 767, and for another ten million dollars they could install improved engines and a new interior. “A totally upgraded 767,” Doerr realized, “cost less than a G-5.” And it could fly longer distances and accomodate thirty-five people, transporting engineers and the founders or Schmidt around the world to visit Google sites. “They went ahead and did it.” They later purchased an additional plane, a Boeing 757.

WITH INTENSE PRODDING from the founders, the Google engineering shop was innovating at a furious pace. Among the new projects developed at this time were Desktop Search, Froogle (later changed to Google Product Search), Google Maps, Google Print (renamed Google Book Search), Google Docs, to allow users to create and edit documents, presentations, and spreadsheets, and Pyra Labs, a site to facilitate the creation of blogs. The founders were particularly enthusiastic about the idea for a new e-mail system. Unlike providers such as AOL, Google’s e-mail would be free, and would allow its users to easily search their own e-mail archives for content and contact names. And while Yahoo’s free e-mail offered its users 4 megabytes of storage, Google’s Gmail would provide 1 gigabyte, 250 times as much. To the engineers, it seemed clear that this was enough storage that a user would never have to delete e-mails. In the interest of efficiency, the first version of Gmail did not include a delete button. This had an unforeseen effect: Users feared that Google would peek at e-mails. And Paul Buchheit’s e-mail scanning software-the same program that had grown into AdSense-only fanned this fear. For Google, it was a way to make money from e-mail by placing ads when certain keywords were typed. But critics said it was an invasion of privacy, that Big Brother was watching everything. Google’s engineers failed to absorb the lesson of Microsoft’s Passport program. Introduced in 1999, the program stored personal information and allowed access via a log-in name and password. Its release triggered a storm of protests, complaints that Microsoft would access this personal data for its own business reasons. Perhaps a reason Google failed to absorb the lessons of Passport was because Google believed its intentions were noble and that Microsoft’s were probably not.

Terry Winograd, the Stanford professor, was a consultant on Gmail and described a “huge debate” over the program. “We said, ‘People want to delete things. There should be a delete.’ Larry, among others, said, ‘We want them to start thinking differently.’” Page said that because Google was offering so much storage, users could keep everything, and went on to argue: “If you delete stuff, you might later on decide you want it. Plus, you spend time thinking about whether I should delete this or not.” The “engineering optimization side,” said Winograd, claimed this was an inefficient use of users’ time.

The Electronic Privacy Information Center, a public interest research center in Washington that focuses on privacy and civil liberties issues, demanded that Gmail be shut down, declaring that it was “an unprecedented invasion into the sanctity of private communications.” Of course, a computer, not a human, was scanning the e-mail, as most e-mail providers do to prevent spam. At first, the founders and Schmidt tried to defend the no-delete button and the advertising feature of Gmail, believing the small tempest would pass. It did not, and Google was forced to add a delete button. For Winograd this was an early sign of troubles to come. He has enormous respect for his former students (and gratitude for the Google stock grants that made him a rich man), but what he saw in the Gmail debate was that Google relied so much on science, on data and mathematical algorithms, that it was insensitive to legitimate privacy fears-and, later, to fears they would dominate the search market. Winograd describes his two former students as impatient: “Larry and Sergey believe that if you try to get everybody on board, it will prevent things from happening. If you just do it, others will come around to realize they were attached to old ways that were not as good.” The attitude, he said, “is a form of arrogance: ‘We know better.’ The idea that somebody at Google could know better than the consumer what’s good for the consumer is not forbidden.”

Only die-hard Google bashers, however, would deny the idealism that drives many of the decisions Brin and Page have made at Google. In the wake of 9/11, Krishna Bharat, an Indian-born engineer who joined Google in 1999 and today has the title principal scientist, was moved by the awful events of that day to ponder its lessons. One lesson, he believed, is that Americans were largely ignorant of other peoples and creeds, including radical Islam. There was too little international news in print or on television. Bharat said he wanted to “broaden horizons, allowing people to see other perspectives, to see what the Arab street is saying today. It is hard for the New York Times to do justice to that.” Devoting his 20 percent time to this project, Bharat devised a program that would be known as Google News, initially offering free access to almost five thousand worldwide news links. The placement and selection of stories is made, Google announced, by “computer algorithms, without human intervention.” Google News would be ad-free, meaning Google would lose money from this effort. Like digitized books, Google News was advanced as a promotional and sales vehicle. It would, Google said, broaden newspaper readership, and allow newspapers to sell advertising once a user clicked on the newspaper’s link. “We send traffic to newspapers,” Bharat said. However, newspapers didn’t all jump up and down with glee.

One of the major dissenters was the Associated Press. Founded in 1846 to provide news stories to newspapers in exchange for annual fees, the AP had begun to extend this franchise online, selling national and international news to portals like AOL, MSN, and Yahoo. But as Jim Kennedy, the AP’s vice president of strategic planning, described it, Google News was sifting news stories, “making copies and taking pieces of this content and posting it as if it were their own news.” Google claimed it was fair use, said Kennedy, since it was posting only part of the article and providing a link. Google said it was both creating reader traffic and promotional value for the news sites. The AP, which is a wholesaler of news, claimed Google was commoditizing their content and insisted on a license agreement. Google resisted, and the AP considered bringing a lawsuit.

Did Tom Curley, the CEO of the AP, think Google was naive? “No, there is nothing naive about these guys,” he said. “They have a very, very aggressive legal view. They have pushed the envelope… They know exactly what they’re doing. They have the greatest business ever invented. They are taking everybody else’s work and they are figuring out how to do a deal with most other people in which heads, they win, and tails, most everyone else loses.” He cited the 80 or so percent Google said it pays its large content partners in the AdSense program. Since Google sells the ads, he said, it charges a commission of about 15 percent off the top, leaving about two-thirds-not 80 percent-for the content creators. “That’s not enough.”

Eric Schmidt disputes this portrayal. “This is a company that [at the time] had only three or four business development people,” he said. Those people alerted Schmidt that the AP felt Google was stealing their content, he said, but “we had a lawyer at the time who advised that this was fair use.” Google refused to pay. The AP claimed that for news Google was becoming “an end user,” not a search site that sent people elsewhere. The idea, Schmidt said, had “never occurred to us.”

Reeling from shrinking revenues, newspapers fretted that Google was depriving them of compensation for their content. They feared Google was expanding from search to the news business. And they were offended that Google thought an algorithm could perform the work of an editor. “Google is driven by engineers who believe that what is most popular is most valuable,” said L. Gordon Crovitz, then the publisher of the Wall Street Journal. When the space shuttle Columbia disintegrated, killing its crew of seven, the Google algorithm allowed the story to rank low and thus disappear from Google News. “Their presentation of news devalues brands. Unlike traditional journalism, it does not communicate to readers the level of authority or authenticity of information.” Over time, he said, Google would blur an understanding of which journalism was most reliable, making news more of an undifferentiated commodity. But the wails from newspapers and publishers were fairly muted throughout 2002 and 2003. The anxiety Mel Karmazin felt after his 2003 visit had not yet gripped the old media.

Nor was Google focused on extinguishing external fires: it had its own internal flare-ups to douse. The founders continued to be uncomfortable with Eric Schmidt’s efforts to impose streamlined management, fearful it would squelch Google’s entrepreneurial spirit. Google was a company rocketing to financial success on the brilliance of its founders and engineers, yet hobbled by them as well. “Larry and Sergey didn’t like management,” Schmidt said, and they let the new managers know this. They were, he said, “unduly harsh.”

In early 2003, Google had four product managers: Salar Kamangar, Marissa Mayer, George Harik, and Susan Wojcicki. To oversee them as senior vice president, product management, Schmidt recruited Jonathan Rosenberg, who had been a senior manager at Apple and other tech companies. Page and Brin were restive with still more managers being added, and Schmidt was caught in the middle. A series of summit meetings was held, with no resolution. Schmidt was not then convinced that relying on four product managers was the best approach. But, he said, “at the time, Larry was having a relationship with Marissa. It was a very complicated set of issues. Eventually, Marissa announced that we should rank all our projects. A great idea. Unfortunately, the top one hundred on the list had three hundred things on it.” And then “there was this huge to-do because Larry doesn’t agree with the list, and the engineers are not working on what they’re claiming to be working on, and the management, which he doesn’t like anyway, is getting away-getting too bureaucratic.” Page asked everyone to prepare a list of exactly what he or she was working on and insisted on getting the reports directly, said Schmidt, in order “to completely avoid being filtered by all these management types, which includes me!”

This was round two of the founders’ unease with Schmidt. Page and Brin would whisper to other Google executives, said one recipient of these whispers, “What does Eric do?” This executive believes Page wanted to reclaim his CEO title. Sometime in the summer of 2002, Coach Campbell again intervened. With the fervent support of John Doerr, the coach set out to make the marriage work. Before 2003 was very old, the three men achieved harmony. Asked in 2008 to describe the most important milestones in Google’s success, Doerr does not cite the myriad deals with Yahoo, AOL, or revenue gushers like AdWords or AdSense. Instead, he said, “The biggest milestone was for Larry and Sergey and Eric to conclude they were going to work together. It did not happen overnight. They learned to adapt. Bill was very helpful in that, and I was too, in a less key way.”

By the end of 2003, the Google rocket was cruising. Its search now controlled 60 percent of the market outside the United States, which produced nearly a third of its revenues. Many of its search competitors-AltaVista, Infoseek, Excite, HotBot-had crashed or would soon crash. Yahoo and Microsoft had jumped into the search business, but Google soared far above them. Already it was common to say “I’ll Google it,” rather than, “I’ll search it.”

Google’s employee roster nearly tripled in size between 2002 and 2003, reaching 1,628 at the start of 2004. Like a child outgrowing his clothes, the company had become too big for its two-building campus on Bayshore Parkway in Mountain View. Its new campus, christened the Googleplex, was a stone’s throw from the old one, faced the same mountains and desertlike expanse, and sprawled over so much territory that Google provided bicycles for employees to travel between buildings. It is a measure of Google’s confidence in its own future growth that the company leased 1.5 million square feet of office space in four multistory buildings that once housed Silicon Graphics, and would eventually purchase an additional fifty-six buildings and 2.5 million square feet of building space on sixty nearby acres in Mountain View.

Although its growth was extraordinary, Google remained below the radar of most media companies, unlike Microsoft in the nineties or IBM in the eighties. “Don’t be evil” was a heartfelt, galvanizing slogan for Googlers, but it was also an effective way to brand Google as a nonthreat ening, almost cuddly, company. Google had bumped into book publishers and the AP, but it was not yet widely perceived as anything more than a narrow search company. As a private company, it was not required to reveal its profits or aims, and so the menace Google might pose to the old media-to broadcast and cable television, to advertising, to movies and print and telephone-was not yet apparent. This was about to change.

CHAPTER SIX. Google Goes Public

(2004)

To grow, Google needed investment capital, but its growth forced a difficult decision. In 2003, Google passed the five-hundred-shareholder mark, and federal regulations stipulate that a year after reaching this threshold companies had either to offer their shares for sale or open their books. Either way, the innards of the Google rocket would be revealed. Page and Brin didn’t want to go public, said Schmidt; they were fearful of revealing to competitors proprietary information and the company’s true trajectory, but also of having to cope with what they considered the short-term mania of Wall Street. They abhorred the idea of doling out fees to investment banking advisers, of going on road shows to sell their story to investors, of allowing Wall Street to set the initial stock price-in short, of doing things the usual way.

The founders knew an initial public offering of stock was necessary, but they refused to listen to the experts, or to Schmidt and the three other board members: John Doerr, Michael Moritz, and Ram Shriram. They approached the IPO as if it were a science problem, with Page and Brin crafting their own solution. Instead of allowing bankers to arbitrarily set the floor price of the stock or allocate shares at a predetermined price to favored clients, the founders came up with a more egalitarian method. They would run an auction similar to the one Google used to sell advertising. Google would set a floor price, and anyone who made an online bid that matched or exceeded it could acquire a minimum of five shares. Instead of paying the usual 7 percent fee to Wall Street underwriters who were necessary to sell stock, they would cut this fee to about 3 percent. And to protect what they saw as Google’s “core values” and maintain a long-term focus, they would implement a dual class stock ownership. The class A shares sold to the public would receive one vote; the class B shares, retained by the founders and by Schmidt and senior managers, would receive ten votes per share, and would comprise 61.4 percent of the voting power.

When the founders proposed this stock structure, Doerr and Moritz objected, and strenuously. Like many on Wall Street, the two board members recoiled at the thought of treating some shareholders as second-class citizens, and of potentially insulating management from accountability to shareholders. “It seemed to me vaguely undemocratic,” said Doerr. Shriram was caught in the middle. “I didn’t want to take a position until we reached agreement on the board,” he said. The VCs had another concern, said a participant in these discussions, about the precedent this might set with their other start-up clients. But the founders had done due diligence, consulting with Barry Diller, who serves on the board of the Washington Post Company, which, like the New York Times Company, has two classes of stock. Diller noted that other companies, including Warren Buffett’s Berk shire Hathaway, also have dual voting stock.

The founders were unbending, and Coach Campbell was called upon to help coax Doerr and Moritz to go along. To be even more transparent about their intent, Page and Brin decided to prepare “A Letter from the Founders,” to accompany the SEC filing. Written by Page, the letter began, “Google is not a conventional company. We do not intend to become one.” To ensure Google’s continued creativity and focus on users, rather than investors, they would be unconcerned with “quarterly market expectations,” did not “expect to pay any dividends,” and would not partake in the usual corporate ritual of offering “earnings guidance” by predicting quarterly performance. “A management team distracted by a series of short-term targets is as pointless as a dieter stepping on a scale every half-hour,” the letter declared. They would make big investment bets, even if these only had “a 10% chance of earning a billion dollars over the long term.” They would continue to “run Google as a triumvirate,” even though this management structure “is unconventional.”

They minced no words about the implications of this stock structure: “The main effect of this structure is likely to leave our team, especially Sergey and me, with increasingly significant control over the company’s decisions and fate, as Google’s shares change hands.” They were also telegraphing that the two founders, who together owned 32 percent of the shares, were more equal partners than Schmidt (who owned 6.1 percent), or Doerr, Moritz, and Shriram (with 8.7, 9.9, and 2.2 percent respectively). Years later, Page described his and Brin’s motivation: “We were concerned in going public that we would have to change the way we operated, compromise our principles. It ended up being a good way of stating upfront the kinds of things we were thinking about and making sure that everybody who was participating was comfortable. By going public you take on a lot of shareholders, and the shareholders obviously have some amount of rights. But we, who are running the company, also have some degree of rights. We felt like it was better to be explicit… and allow us to be able to do the kinds of things we wanted to do.” While candid, the letter could have used the skill set of someone with a liberal arts education; say, an editor. Eight times in six pages they repeat a variation of the same messianic vow: to make “the world a better place.”

When Google announced it was going public in the spring of 2004, it had to disclose its finances in an SEC filing. As Google’s director of global communications and public affairs, David Krane said reporters suddenly realized, “Holy shit, this is a business story we missed here!” Krane and his then boss, Cindy McCaffrey, were bombarded with queries, but because SEC rules require a “quiet period” from companies between the time they file and the time their stock goes on sale, they could not answer. Reporters would call and say, “I need to talk to Sergey. I need to talk to Larry. I need to talk to Eric.” The pressure “to get the Google story” was intense. Once, Krane spotted a photographer hiding behind a bush at the Googleplex, hoping to snap a picture of the founders.

On the eve of the auction, there was rampant speculation about the price the stock would fetch. On the day of the offering, August 19, Page did a highly unusual thing: he wore a suit, not his usual black T-shirt and jeans. He and Schmidt had flown overnight to New York to open trading on the NASDAQ floor. They were accompanied by investment bankers and a team of about ten Google executives, including Marissa Mayer. They went back to Morgan Stanley and watched, rapt, as their stock was traded, rising one minute, falling the next. They had suggested in their IPO a floor price of eighty-five dollars, but were hoping to better that. They were now engaged in a spectator sport, one with enormous personal financial consequences. “Will it break one hundred dollars? Will it break one hundred dollars? I kept asking,” said Mayer. She and Page and Schmidt and the others were mesmerized by the Morgan Stanley trader who spoke so fast to those on the trading floor that the Googlers found him unintelligible. They watched him finally coax the stock to settle in at one hundred dollars. At last, he rose from his chair and, as if he had put a baby to sleep, calmly told them, “It likes to trade at one hundred dollars.”

Page, Schmidt, Mayer, and David Krane hopped into a waiting SUV that took them to Google’s New York offices, which were then on West Fortieth Street. As soon as the car doors closed, recalled Mayer, Page pulled out his cell phone and announced, “I’m going to call my mom!” The others pulled theirs out and chorused, “I’m going to call my mom!” When they got to Google’s offices, Page and Schmidt and Mayer went back to work, meeting for ninety minutes with a team of engineers.

Where was Brin? He had stayed out of the public eye in Mountain View, working. Page and Schmidt had urged him to come to New York, but he refused, saying, “It would send the wrong message.” By treating this as a normal workday, he declared that the IPO was not about getting rich but about building Google.

The stock reached $108.31 the next day, and by January 31, 2005, had jumped above $200. It soared, in large measure, because investors had for the first time peeked at Google’s ledger sheet. They saw that Google’s revenues had shot up from $86 million in 2001 to $1.5 billion in 2003, and seemed destined to double by the end of 2004. Net profits reached $105.6 million in 2003, and were expected to almost triple the following year. They saw that the young AdSense program now contributed half of all revenues, and that Google raced well ahead of its two primary search competitors, with nearly twice the users of Yahoo and more than three times Microsoft’s. Google had little debt, and though Yahoo had terminated their search contract, it had generated only about 3 percent of Google’s revenues. They also saw that the Overture patent lawsuit hanging over Google was withdrawn by its corporate parent, Yahoo, which exchanged its warrants for 2.7 million Google shares. And they saw that Google’s skilled work force was deeply invested in their company’s success, with Google regularly setting aside about 12 percent of its revenues to award nearly 40 million stock options to its employees.

Envy raced through the corridors of traditional media companies. By the standards of media conglomerates (or investment bankers), Google’s compensation was extremely modest. Schmidt was the highest salaried employee at $250,000 and received a bonus of $301,556 in 2003, and Page and Brin each earned a salary of $150,000 and a bonus of $206,556. But the value of traditional media executives’ stock holdings were usually leaden. By contrast, a total of 19 million share options had been granted to Google employees, more than half of these at an option price of 49 cents per share, and none at a price above $15.95. When the stock price leaped with the IPO, it produced more than nine hundred Google millionaires. Eventually, four employees-Page, Brin, Schmidt, and Omid Kordestani-and the three outside directors would become billionaires. Andy Bechtolsheim, who signed the first check, owned 1.5 percent of Google’s stock, and David Cheriton of Stanford, who tirelessly promoted Google, owned 1.4 percent. Stanford University, which received stock and royalties from Google for their investment in Brin and Page, owned nearly 1.7 million shares. If the first thirty Google employees held their stock, said a knowledgeable insider, by 2008 they would each be worth about $500 million; the next seventy employees would each be worth about $100 million. Even Bonnie Brown, the first masseuse hired by Google in 1999, who smartly opted for stock options and a lower hourly rate, retired a millionaire and established her own foundation.

There was more to unsettle traditional media companies. On page 80 of the Google IPO was this strategic declaration: “We began as a technology company and have evolved into a software, technology, Internet, advertising and media company, all rolled into one.” And on page 11: “In addition to Internet companies, we face competition from companies that offer traditional media advertising opportunities.” Google went on to say that, increasingly, they would be vying with these media companies to induce advertisers to shift their ads online. In an appendix that accompanied the filing, Google produced a chart showing that while magazine and newspaper advertising declined between 2000 and 2007, and television ads only rose 8.8 percent, Internet advertising jumped 101.9 percent, becoming “the fastest growing medium for advertisers.”

While Wall Street focused on the money Google was making, Benjamin A. Schachter, then the senior Internet and video game analyst for UBS, focused on the dollars they were investing in computers and servers and data centers, two hundred million dollars in 2003 (and soon to climb to nearly three billion dollars annually). “This said they were doing much more than selling advertising. You don’t need that computing power for text searches. You need it for mobile phones and applications, for cloud computing.” A “cloud” of servers could store a consumer’s information and hold a suite of software products, including spreadsheets, word processing, and calendars.

Google has dozens of data centers all over the world (the exact number is a state secret at Google), 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 and are arranged in stacks and have been repurposed as servers to process searches. The servers in these data centers provide an array of software services that users can access from any device. By geographically spreading these data centers all over the world, Google became more efficient. “In a second, light can go around the world seven times,” said software engineer Matt Cutts, who joined Google in 2000. “That’s a couple of milliseconds between a data center on the East Coast and a data center on the West Coast or in Europe.” When we log onto Google, it instantly identifies our approximate geographical location from the Internet Protocol address on the browser that connects us to the Internet. Thus the query is dispatched to the closest data center, which produces a speedier result.

But the data centers are meant for more than search. Eric Schmidt, Schachter noted, has been proselytizing for cloud computing for two decades, since he was a Sun executive touting “network computing.” That same year, 2004, John Markoff of the New York Times spotted it too. While others saw Microsoft training its guns on search, he saw Google taking aim at Microsoft’s software. The scale of the Google computer system, as well as the backgrounds of its management, he wrote, “suggests that while Microsoft may want to be the next Google, the Web search company has its own still-secret plans to become the next Microsoft.”

A STRIKING TAKEAWAY from the Google IPO and letter is that Google’s two thirty-one-year-old founders were driving the company with a clarity of purpose that would be stunning if they were twice their age. Their core mantra, which was echoed again and again in their IPO letter, was that “we believe that our user focus is the foundation of our success to date. We also believe that this focus is critical for the creation of long-term value. We do not intend to compromise our user focus for short-term economic gain.” The IPO declared, as they had from day one, that Google will “not accept money for search result ranking or inclusion”; that no attempt is made to keep users in a walled Google garden but instead to steer them quickly to their destination; that if the ad does not attract user clicks, it will be dropped “to a less prominent position on the page, even if the advertiser offers to pay a high amount.” And those ads deemed more relevant because they attract more clicks, move to the top “with no need for advertisers to increase their bids.” Since Google only gets paid when ads are clicked, this ranking system “aligns our interests equally with those of our advertisers and our users. The more relevant and useful the ad, the better for our users, for our advertisers, and for us.”

How did Page and Brin achieve such clarity?

Page’s answer: “Being less experienced, you have benefits and you have costs. We were willing to do things differently because we didn’t know better. I think our propensity to do that is higher than most people’s. I’m not sure it’s clarity. It looks like clarity in retrospect because you see the things that work.” Page’s modesty is becoming, but falls short of a full explanation.

Brin gave a parallel answer: “A lot of it is common sense, a combination of common sense and questioning rituals. Experience is a benefit, but it can also be a handicap.” He also attributes their success to their math backgrounds and a thirst “to be precise.” The idea to give employees 20 percent of their time to pursue their own passions he credits to graduate school, where “you’re always going off” on your own projects. Stanford was a huge influence: its bikes and buses, its open cafeteria tables and time to work on your own projects. “They wanted to replicate the Stanford culture in the business world,” said Ram Shriram.

The precision argument is picked up by senior vice president of Operations Urs Hölzle, who said the logic flows from a focus on the user. Start there, and it is relatively easy to decipher whether users want a Google home page cluttered with ads, or want relevant ads, or want to rapidly move to different sites. “They predicted things that did not make sense to me, but turned out to be true. Larry said, ‘The ad results have to be better than the search results.’ I thought he was wrong. Yet today studies show that people value the ads as an essential part of their search results.”

One of their mentors at Stanford, Terry Winograd, thinks their “clear, coherent point of view” is “an engineering point of view: Don’t assume things are done the right way because they were always done that way. Question everything.” And after you question, revert to “an engineering optimization attitude: ‘Make it more efficient.’” What stands out to another Stanford mentor, Rajeev Motwani, the Stanford professor Brin remained closest to and who died in a tragic accident in 2009, are their one-word questions: “The number of times they made me change my opinion by asking, ‘Why?’ They asked like a child.”

It would be a mistake to ascribe Google’s success to the generic category of engineers. Larry Page brilliantly conceived search, and Sergey Brin’s math skills were vital to its success. But Google also succeeded because it forged teams of engineers who were not territorial, who formed a network, communicating and sharing ideas, constantly trying them out in beta tests among users, relying on “the wisdom of crowds” to improve them. Building communities of engineers and hackers and users was the ethos they shared. They believed it was virtuous to share, for it embraced the construct framed by Eric Steven Raymond in a paper originally presented at a conference of Linux developers in 1997, “The Cathedral and the Bazaar.” Instead of a solitary engineering wizard crafting software as if it were a cathedral and releasing it when perfected, Raymond argued that the Linux model was more like “a great babbling bazaar” that would ignite the creativity of communities of engineers and users. This ethos was one that infected Page and Brin and Google engineers, led them to the clarity of a free search engine designed to serve users.

Eric Schmidt had another theory: Page and Brin actually have more experience than their age suggests. He recounted a recent discussion he had had with Page. He and the founders were upset with a product user interface presentation they attended. Page said the problem was that the engineers were young and had no experience. “The reason you and I agree on this is that I started on this when I was very young, and I’ve been thinking about it for a long time,” Page said. At first, Schmidt was stunned, wondering how Page grouped himself with someone who was two decades older. Then it dawned on him that Page nearly matched him for experience. Like Brin, he said, “He looks like a kid to you, but he’s been in the industry as long as I have in a way.”

The experience of the founders stems, as well, from four things they shared. First, each was raised in an academic home, where clear thinking was prized. They were trained to be precise. Each also “are quintessential Montessori kids,” said Marissa Mayer. “They didn’t have a lot of structure. They got to do what they want to do. They were taught to question authority and think for themselves. They fundamentally believe that people on many levels know what’s best for themselves. Like the Montessori kid who paints when he wants to paint.” Montessori, Page said, taught Brin and him “to question everything.” A third vital shared life experience was Stanford. The fourth was that Page and Brin shared each other. “There’s kind of a strength in the duo,” said Coach Campbell. “So when they come out the door at the other end, they are even more convinced than they were going in.”

“We agree eighty to ninety percent of the time,” Brin said of his relationship with Page. Page thinks they agree about two-thirds of the time, but said their disagreements are usually over small things. “If we both feel the same way,” Page said, “we’re probably right. If we don’t agree, it’s probably a toss-up. If we both agree and nobody else agrees with us, we assume we’re right!” He smiled as he said this, an awkward, tight smile, yet one that conveyed both merriment and resolve. “It sounds like a tough thing to say, but that’s sort of what you need to do to make progress.”

Susan Wojcicki, who rented them her garage, believes they gave each other strength-strength “to be different. They think alike. They had a shared vision. So when things got tough, they were able to support each other in being different.” They don’t always agree, said Jen Fitzpatrick, who is Google’s engineering director and was among the first thirty Google employees, but “having a mental sparring partner is a good way to drive your own thinking.”

“Having the two of them being completely in sync” is a huge advantage, said Kordestani. He remembers his experiences as an executive at Netscape, where the three senior executives-founder Jim Clark, CEO James Barksdale, and the browser’s inventor, Marc Andreessen-“were not in sync.” Pulling in different directions, Netscape lost its focus.

Page and Brin bucked each other up in another way: they burned with an idealism that sometimes bordered on messianic. They launched Google with a fervent belief that advertising tricked people to spend money, that the Internet would foster a democratic ethos that would liberate people. They gave employees their 20 percent time, Page told Schmidt, in order “to force a conversation” with managers, removing some managerial power.

There is a real sense of loyalty to Page and Brin at Google. Their vision has made Googlers obscenely rich. Employees love the freedom that the 20 percent time and generous benefits grant. Like Steve Jobs or Bill Gates, their knowledge can be intimidating, though terror is not commonly part of their motivational arsenal. Their approach can be subtle. Sheryl Sandberg recalled a project she supervised in her role as vice president, global online sales and operations. The story she related could be interpreted as an illustration of a company careless about how much is spent, or as a reason employees like Sandberg saluted the founders. At the time, her project awarded free search ads to nonprofit groups. “Some companies would be worried about the bottom line. Larry and Sergey just wanted to know why the program was not bigger, faster,” she said. She increased the size of the effort-too fast, it turned out. “We were giving much more ad inventory to a handful of nonprofits than we should have.” She trekked to the founders’ office in Building 43 to explain. Page was there alone, and she explained her “really big mistake,” said she “should have noticed,” and apologized.

Page interrupted her, she recalled. “He said, ‘I’m so glad these are the kinds of mistakes you’re making because it means you’re moving quickly and doing too much. I’m going to be very upset when the mistakes you’re making are by going too slowly and missing opportunities.”’ She volunteered a ten-point plan to avoid similar mistakes, asking if he wanted to review it.

“No, I totally trust you,” he told her.

Of course, clarity is not a trait unique to Google’s founders. Steve Jobs has demonstrated prescience with several transformative innovations: the first Macintosh, Pixar, the iPod and iTunes, and now the iPhone. Bill Gates was clear about the value of software, a clarity IBM lacked when it ceded the operating system to Microsoft. By insisting that craigslist.org be a free site for most classified ads, Craig Newmark knew, he said, that by sacrificing revenues “people saw values we believed in and picked up on it.” He knew he was building trust.

Page and Brin’s clarity was abetted by the CEO they chose as their partner, Eric Schmidt. Aside from the bumps they had the first few years, it is the overwhelming opinion of those who work with them that the three men have a smooth working relationship. Sheryl Sandberg observed that the reason the troika “works is that whoever you go to for an answer, that answer sticks.” When you have two parents, a child can usually play one off against the other, she said. But at Google even if one of the three disagrees, he will back the decision. Brin said of Schmidt, “Eric is the leader for the company. Larry and Eric and I all share in the top-level leadership, but mostly Eric takes on the hardest challenges. Larry and I can spend more time on products and technology.”

Success in the Valley requires more than good engineers and passion, said Bill Campbell, pointing to the brilliant engineers and divided management that could not save Netscape, or how the passion of founder Jonathan Abrams, who founded Friendster, the pioneer social network site, was no substitute for missing management, and is a reason Friendster was eclipsed by Facebook. “I can’t imagine that anyone could have done what Eric has done. He matches what this company needs. You’ve got founders that have their unique passions, and they have an unusual amount of strategic insight. Applying that to a business model and making sure that the trains are running on time-and at the same time never losing the technology vision-is a feat. Eric’s technology skills mean that no one can bullshit him. You can bullshit me. I’m not an engineer.”

Being an engineer, alone, is not enough. Oracle has thrived for a long time as a company founded and headed by Larry Ellison, who is not an engineer. Ditto Apple under Steve Jobs. This point is made by Dan Rosensweig, the former COO of Yahoo who is today the CEO of Activision Blizzard’s Guitar Hero franchise. What makes a successful CEO, he said, “is a balanced appreciation” of the many factors, including engineering, an entrepreneurial and business culture, plus good management. In defense of his friend Terry Semel, he added, “When Terry ran a movie studio he wasn’t a director or an actor. Yet he and Bob Daly ran one of the great studios.”

The youth of the founders sometimes leads to sneering that an adult like Schmidt was essential to managing Google. “It borders on insulting to say that Eric provides ‘adult supervision.’ It is insulting to both,” Elliot Schrage said. Yet there are times when Schmidt does supervise, playing a role he likens to “a catcher” who retrieves “loose balls.” For example, at the conclusion of a Google Zeitgeist conference, the founders and Schmidt hosted a lunch for fewer than a dozen journalists in a conference room on campus. In an earlier interview, I had asked Schmidt how he felt about the federal Patriot Act, which grants the president superseding power to tap phones or e-mails to investigate potential terrorism. “I’m not a big fan,” Schmidt said. “I’m offering you my personal opinion as a citizen.” At the press lunch, the three men sat at the head of a long table, and as a preface to a question I mentioned that two years earlier Google had challenged a Justice Department subpoena that the company share information about search queries involving pornography, and Google took them to court and won. Given that, I asked, what was Google’s posture toward the Patriot Act?

“I’m not an expert on the Patriot Act,” Brin began, “but it’s certainly a long-standing issue prior to the Patriot Act…”

“Can I?” Schmidt interrupted. Not waiting for permission, he proceeded to say: “The best way to answer this question is to say it’s the law of the land and we have to follow it.”

“Or in some cases we fought it in court,” Brin began again, referring to the court victory on whether Google must turn over search requests involving pornography. Again, Schmidt interrupted, steering Brin away from any possible don‘t-be-evil proclamations. Schmidt said, “We fought it legally, and we followed the law, and we won in court.”

There are times when Schmidt appears obsequious to the founders, as when he introduced Page at the annual meeting of Google shareholders as “the best business partner in the world.” But then, “every once in awhile,” a Google executive said, “he does this unintentional condescending thing, and he does it in public settings.”

What Schmidt clearly brought to Google was experience the founders lacked. Experience often brings seasoned judgment. “Eric is the person who said, ‘We did this at Sun,”’ said Sandberg. “Eric instilled some business discipline. Before Eric started, our engineering team was going to build a finance system.” She recalled that he told them “This is not a good use of our resources. We’ll buy the software program.” Michael Moritz, who as a director was unhappy with Schmidt’s toughness during his first year at the helm, now said, “I’ve become a huge cheerleader and fully paid-up member of his fan club. He’s done the most important thing for a chief executive, and that’s to recruit and lead a wonderful management team.”

Andrew Lack, then the chairman and CEO of Sony Music, who is a friend of Schmidt‘s, remembers an incident at the 2005 World Economic Forum in Davos. Arthur Sulzberger, Jr., the chairman of the New York Times Company and publisher of its flagship newspaper, spoke at a dinner attended by Schmidt and about fifty media executives and journalists. Schmidt remembers the evening vividly, thinking, “I was the guest.” What he did not know, said Lack, was that he “would become a target.” Sulzberger, who despite his august position can be surprisingly supercilious, rose and accused Google of “stealing his business,” his advertisers, his content. Sulzberger has another side, as a staunch defender of journalistic values-a reason many in the Times newsroom believe he nobly stands between them and the financial barbarians-and he then made an eloquent plea for the importance and future of newspapers, before coming back to Schmidt and underscoring his animus toward Google.

The room was tense when Schmidt rose to respond. He defused it with humor, said Lack, referring to himself “as the skunk at my garden party. I can feel in this room, shall we say, a certain indifference towards my contribution to all of our work together, and I feel sorry about that, because I think there are great contributions to be made working together.” Schmidt acknowledged that Google and the Internet can negatively affect newspapers and other media businesses, but ended by urging them to talk and search for ways to work together. Sulzberger said he had “no recollection of the specific incident,” adding, “You can certainly check with Eric on this.” Eric Schmidt confirmed Lack’s account.

“I admired Eric for the way he handled himself,” Lack said. “There was no armor to him, no bluff, no bravado.”

By 2004, relations between Schmidt and the founders were harmonious. The founders are happy with Schmidt, said one longtime Google executive who did not want to be quoted, because “Eric does everything they don’t want to do.” Bill Campbell sees it from another angle. He lavished praise on Page and Brin for their entrepreneurial brilliance and inquisitiveness. But he added, “Here’s the part you don’t see: Let’s assume they had ten ideas they thought were great. Let’s assume they applied six of them. That gauge of what you can apply and what you can’t is where Eric comes in big time. These guys decide this is what they want to do, and Eric will say, ‘This is worth fighting for. This is a really important thing. Let’s go do that. Let’s pull that, it will take us a little off track.’ What Eric has, and the founders are the first to say, is judgment, judgment, judgment. He knows when to take their initiatives and drive them to a conclusion, or to talk them out of it.”

SOMETIMES ENGINEERS CAN BE CLEAR about the wrong thing. By relying so heavily on algorithms and science, the Google founders-and Schmidt-have sometimes been clueless about right side of the brain issues, as they were with their original approach to Gmail, or book search, or their clumsy dealings with traditional media companies. Google collects an enormous amount of data about the people who use it. It asks users to trust them with private information, much as a credit card company asks users to trust it won’t share card numbers. The difference is that Google’s business model is based on selling advertising. And the data Google collects-the amount of time users spend with an ad or reading something, what they click on, what they search for, what they seem to like or dislike-is invaluable to the advertiser. Although Google does not hand over the data to an advertiser, it does use the data to help advertisers target customers. As Winograd points out, Google is really saying, “‘We’re smart guys. We have integrity. Trust us.’ They see things not from an institutional, political point of view but from this personal and engineering point of view: ‘We would never do that sort of thing.’ They believe that in their hearts.” Winograd believes them too. But the engineer’s passion, he said, drives them to also believe that they are “smart enough to make sure that it won’t happen by accident.” With the air of an empathetic but rigorous professor grading a smart but innocent student, Winograd arches a huge white eyebrow and concludes that this entails “a certain amount of technical arrogance-‘The system cannot fail, cannot fail.” But the system can fail, he added, because it is managed by fallible human beings, not machines.

Google, at least abstractly, is aware of this danger. Their IPO filing acknowledged that “privacy concerns” could sabotage the trust the company requires from users. In disclosing to investors the various ways in which Google could fail, they write: “Concerns about our collection, use or sharing of personal information or other privacy-related matters, even if unfounded, could damage our reputation and operating results. Recently, several groups have raised privacy concerns in connection with our Gmail free email service… The concerns relate principally to the fact that Gmail uses computers to match advertisements to the content of a user’s e-mail message.”

If users lost trust in Google, believed their private data was being exploited and shared with advertisers (or governments), the company regularly judged one of the world’s most trusted brands would commit suicide. Do Google’s engineers, in their gut, believe they could lose the user trust they have earned? Unclear. What is clear is that there is often a fine line between certitude and hubris.

CHAPTER SEVEN. The New Evil Empire?

(2004-2005)

In Edgar Allan Poe’s story The Purloined Letter, an incriminating letter disappears from the private residence of the French queen. The Parisian police prefect takes on the case, but even after an extensive search, he cannot find the letter. And though he manages to narrow the search to a chief suspect, a government minister, he lacks evidence to arrest him. The prefect decides to consult the noted amateur detective C. Auguste Dupin. He explains that each night for three months, he has slipped into the minister’s home to assiduously search for the letter, removing cushions, the bottoms and tops of bedposts, the floorboards, the bindings of books-without success. The prefect is agitated; the suspect is a mere poet, he says, and he cannot believe such a “fool” could outwit him. Dupin, however, disagrees; he thinks the prefect and his detectives are the foolish ones, limited by their experiences, their routines, and “their own ideas of ingenuity.” They could not comprehend the acumen and cunning of a mind schooled not just as a poet but as a mathematician who follows his own “mathematical reasoning.”

Months go by, and the prefect returns, still unable to prove the minister’s guilt and ready to sign over the reward. Dupin, after persuading the prefect to sign a check, pulls the letter from his desk drawer. He explains that he cracked the case by climbing inside the supple mind of the suspect and imagining what he would do to conceal the letter. He imagined that the minister tricked the police by not attempting to conceal the letter. Rather, to avoid detection the letter was soiled, slightly torn, and crumpled in a card rack lying in plain sight in the middle of the minister’s room. Dupin found the letter where it had always been: under the nose of the prefect and his detectives.

Until 2004, most traditional media executives treated Google the way the prefect treated evidence: they failed to see the digital threat right under their noses. But soon after the IPO, their heightened awareness was captured in an eight-minute Flash-based movie that virally spread across the Internet. Called Epic 2014, it was a faux documentary by two young journalists, Matt Thompson and Robin Sloan. With a voice-of-God narrator, it recounted how year by year a new media giant, Googlezon (the merged Google and Amazon), acquires or murders media companies, including the New York Times Company. By 2014, this Orwellian colossus employs its algorithms and computers to snare advertising and customize packages of news for individuals, whose wants are revealed by the cookies Googlezon gathers to track the behavior of its users.

Not surprisingly, this depiction jarred Googlers. When Sheryl Sandberg joined the company in late 2001, she believed she had a public mission, a mission parallel to the one she felt as a ranking member of the Clinton administration. Yet to her shock, not long after the IPO, she first heard Google referred to as the “evil empire.” She was attending a Google conference-“I was standing there with our partners and they said, ‘How do we sustain ourselves against the power of-’ I thought they were going to say Microsoft. Instead they said, ‘Google.’”

The hostility, said Eric Schmidt, “did not begin until Google went public and people realized how much money we were making.” The reaction had more to do with fear than envy. It took Microsoft fifteen years to exceed one billion dollars in revenues; it took Google just six years. The evidence was now visible that Google was attracting more Internet advertising than anyone else, and these dollars were being siphoned from traditional media. This was perceived as a threat to most traditional media companies, and perhaps none more so than the advertising industry. Google was able to sell advertising with just a few search words, and without charging the same 2 to 5 percent fee extracted by the media buying agencies. The buy was better targeted. And for advertisers it was more efficient, for Google only charged the advertiser when the consumer actually clicked on an ad. “There’s that same ‘think big’ attitude about markets and opportunities,” Steven I. Lurie, a former Microsoft executive who had friends at Google, told the New York Times at the time of the IPO. “Maybe you can call it arrogance, but there’s that same sense that they can do anything and get into any area and dominate.”

IT WAS IN THE CONTEXT of this growing backlash that the fight with book publishers, begun a few years earlier, started to come to a head. Like the Googlezon film, the uproar over digitizing books seemed to surprise Googlers. In their assessment, by scanning books and making them part of search, they were performing an ambitious and noble public service-they thought of the effort as their “moon shot”-and they assumed that they could do this without seeking permission of the copyright holders. Google knew that only about a third of the more than twenty million books ever published were no longer protected by copyright. But the mission was to scan all books. With books under copyright, Google said it would merely show “snippets,” which it claimed was permissible under the fair use clause of copyright law. Google did not precisely define the maximum number of words in a “snippet.” Nor does the law, but the rule of thumb is that fair use involves only enough text to briefly explain a book or briefly quote from an article or song.

Google believed it had provided protection to authors and publishers. In its contracts with libraries, Google said that if, within three years of the digital transfer of material, “Google decides not to use that content” (a particular book) because of a copyright dispute, the library would destroy the digital copy. They believed authors and publishers would see Google Books as a wonderful way to promote authors and their works, and to bring back books no longer in print. Google had earlier launched a Partners Program, signing up publishers who agreed to allow snippets to be shown for certain books, along with a link to an online bookseller. But publishers did not agree to allow all books to become part of search. The gulf between Google and the publishers and authors was vast. Google wanted to push the envelope of copyright, expanding the definition of fair use to allow more extensive quotations from books. It stressed the rights of search users, echoing the views of Web pioneers like Kevin Kelly, the “senior maverick” at Wired magazine, who said that in return for government copyright protection, authors and publishers had a “copyduty” to “allow that work to be searched.” Google was offering to pay the cost of moving and scanning the books; what publisher-or library or university or author-could refuse that offer?

One clue of Google’s fundamental attitude toward books-and fundamental innocence of the publishing process-is a conversation I had with Brin while reporting this book. It was the second of our three interviews and upon entering the small conference room down the hall from the second floor glassed office he shares with Page, Brin playfully ribbed me for writing this book. “People don’t buy books,” he said. “You might as well put it online.” He meant: You might as well publish it for free.

“You might make more money if you put it online,” he said. “More people will read it and get excited about it.”

There’s little evidence that such a free book succeeds, I said. Stephen King tried it, and gave up the effort because he thought it was doomed.

“I guess that’s true,” he acknowledged a little sheepishly.

Following Google’s business model, would he expect authors to generate their income by selling advertising in their books? If there was no advance from a publisher, who would pay to cover the writer’s travel expenses? (I made thirteen week-long roundtrips to Google from New York, rented a car, stayed at hotels, and paid for dinner interviews most nights.) With no publisher, who would edit and then copyedit the book, and how would they get paid for their work? Who would pay lawyers to vet it? Who would hire people to market the book so that all those potential online readers could discover it? The usually voluble Brin grew quiet, ready to change the subject.

But our rhetorical go-round hinted at something fundamentally true about Brin and Page and the dynamic company they have forged. Their starting predicate is that the old ways of traditional media are usually inefficient, and scream to be changed. This is a reason Google fundamentally misread the reaction of publishers and authors. While Google did reach various agreements with a variety of libraries, including Harvard, Stanford, the University of Michigan, Oxford University, the Library of Congress, and the New York Public Library, publishers did not like the idea of not getting paid for the use of their books. The Association of American Publishers denounced Google’s plan as an invitation to piracy, for the books stored on servers would be vulnerable to hackers. Publishers claimed they could be hit by the same thunderbolt that struck the music industry: free downloads.

Richard Sarnoff, the chairman of the Association of American Publishers and the executive vice president of Random House, said, “Google went to libraries and said we will digitize all your books and just use snippets of copyrighted books. They said it would be good for libraries and for users. This is true. But we have laws in this country which govern what we can do and not do. Like copyright, which prevents people from copying things for their own commercial use. And this is for Google’s commercial use, for search.” The publishers demanded that Google seek their permission before digitizing any book that was still protected by copyright. “The Internet is a grazing medium,” Sarnoff said. “Books tend to be a longer term experience.” Grazing can be a great way to promote a book, he said. “But we want to be extremely careful to make sure discovery does not become consumption.” To illustrate his fear of piracy, he pulled out his iPhone and said that the small device can hold fifty thousand books, all easily down-loadable. This, he noted, is the approximate capacity of a midsize bookstore. In October 2005, the publishers announced that they had filed a lawsuit.

Paul Aiken, the executive director of the Authors Guild, wanted authors to share in any profits from their books, but said his primary concern was piracy. He mentioned “the huge risk” posed by backup copies in Google’s possession and the libraries. “Google is giving back to the University of Michigan a digital copy of each book for their own use. What happens to the University of Michigan copy?” What happens, he said, when they share the copy with other Michigan libraries? What happens “if they lose the backup?” Or it’s hacked into? Sarnoff was also concerned that Google’s definition of “a snippet” was vague. A longer snippet from a novel is likely too brief to rob the book of value, he said. But a snippet of a reference book may be “taking real value” from the author. In a fundamental sense, the differences between Google and its Silicon Valley allies, who want to share information, and publishers and authors, who want to be compensated for it, boil down to a definition of property rights. On the Internet, it is common to make copies of pages and share the information of those who produce content. In traditional media, such “sharing” is often considered theft. The Authors Guild also filed a lawsuit against Google.

To David Drummond, Google’s senior vice president of corporate development and chief legal officer, the difference came down to this: “Fair use is as important a right as copyright infringement. It is a balance that is struck between encouraging people to innovate, and a public sphere.” He defined a snippet as similar “to a Google search. You see just two or three lines.” He rejected the idea of sharing revenues with publishers and authors for the snippets that would appear in a book search, likening a Google search to a book review, which no one claims as a violation of copyright law. As for pirated copies from the libraries, he said, “We’ve got provisions in the library agreements that they agree not to abuse. We would hope that these are major institutions that take their copyright responsibilities very seriously. These are also research organizations that have not insignificant expertise in data security.” The president of Stanford, John L. Hennessy, who is on the Google board, agreed that university libraries have to “guarantee” the security of digital books. But he wants to keep the focus on “finding a way to move forward,” to bring the information in books to people. “We need to rethink our copyright framework that is still a remnant of the past. In the digital age, for example, why should the library buy a physical copy of a book? Why can’t the library just buy a digital copy?” Physical books, he adds, are “too big. They cost too much to store. They’re too hard to deal with, and they’re too hard to search.”

Columbia University law professor Tim Wu supports Google’s efforts to digitize books, which he also sees as essential for comprehensive search. But he thought Google was being evasive. “If they had a copyright lawyer among their founders,” he said, “they never would have started the company. The basic business of a search engine is to copy everything. To make your copy, and then search it. The first thing that happens, arguably, is infringement of copyright law. I say ‘arguably’ because there’s never been a case on it. From day one, Google went out and copied the whole Internet. Can you imagine a company starting in the film world and the first thing they did was make a copy of every film in existence? That company couldn’t have gotten started. The Web is always about copying, but copyright law is all about making copying illegal.” There is an unavoidable disconnect between the two.

Over the next several years, the Association of American Publishers and the Authors Guild lawsuits wended their way through the legal system. While they did, another disconnect surfaced: a contradiction between Google’s push to liberalize the intellectual property rights of others while protecting its own. Buried in Google’s 260-page 2004 IPO prospectus is this admission: “Our patents, trademarks, trade secrets, copyrights and all of our other intellectual property rights are important assets for us. There are events outside of our control that pose a threat to our intellectual property rights.” They cited the politics of other nations, the various legal interpretations. Then they provide a sentence that could have been uttered by a publisher: “Any significant impairment to our intellectual property rights could harm our business or our ability to compete.”

Looking back, many of Google’s nonengineers admit, when asked, that Google made a mistake by not more closely consulting and coordinating their efforts with publishers and authors. “I think that’s true,” said Megan Smith, Google’s vice president of business development, who explained that “we moved too fast” and “involved the Authors Guild much later” than we should have. “We’re a technology company,” chimed David Eun, vice president of strategic partnerships. “We thought people would understand that we had good intentions.” Asked if Google was guilty of innocence or arrogance, Paul Aiken of the Authors Guild said, “It’s probably both.”

MEL KARMAZIN THOUGHT it was arrogance. Having left Viacom earlier in 2004 after an unhappy half decade with Sumner Redstone (and before it was split into two companies, Viacom and CBS), he was now the CEO of Sirius satellite radio, which blankets the United States with a cornucopia of radio options. He described an early meeting he had with Tim Armstrong, Google’s sales chief. “The first thing he said was, ‘We have so many advertisers that we don’t have enough content in which to put all of this advertising, so we would like to get into selling radio advertising.’” Armstrong proposed to sell national satellite radio spots the way Google sold search words, in an auction.

“How much money will you guarantee me?” Karmazin asked. Armstrong made an offer that Karmazin considered way too low. “I believe the system would have been successful,” Karmazin now said, “but it would have had the effect of lowering prices.” Again, he was struck, as he had been on his 2003 visit to its campus, by Google’s boundless ambitions. Again, he believed that its mathematical approach was all wrong. Google didn’t understand that you were “selling the sizzle, not selling a cost per point”-each rating point signifying the size of the audience is sold at a set rate. “You’re selling a spot in Desperate Housewives.” To those at Google, Karmazin was slavishly following a formula that digital technology had proved wasteful.

It wasn’t just Google that loomed as a threat to traditional media. Yahoo was pushing into content-hiring a former Hollywood executive, Lloyd Braun, to produce and package shows for the Web, in addition to such popular features as Yahoo Finance-and in 2005 had more than four hundred million worldwide users. That year, Yahoo generated profits of $1.1 billion, and was valued by Wall Street at a whopping $50 billion, equal to the combined value of Viacom and CBS or to the Walt Disney Company. Jaws dropped when media executives read in 2005 that Yahoo CEO Terry Semel cashed in $230 million in stock options, and had another $396 million yet to exercise.

Google believed, with merit, that traditional media too often blamed digital companies for events they did not cause-for the disruptive impact of the Internet, for slowed or declining profits, for their shrinking stock price or budget cutbacks, for their rampant insecurities. It was inevitable that the Internet would alter the way consumers received and used content. But Google became a convenient piñata.

The company gave its critics a big target to swing at: in 2005 alone, Google acquired fifteen smaller digital companies and partnered with various others, including a smaller search engine, Barry Diller’s Ask.com, to which Google directed advertising as it now did for hundreds of thousands of Web sites. Google had 7,000 employees working out of 62 offices, 30 of them outside the United States, which produced nearly 40 percent of its revenues. By the end of 2005, the company had indexed 8 billion Web pages in 116 languages; its revenues soared to $6.1 billion and its net income to $1.5 billion.

Meanwhile, the tide was running against traditional media. In December of 2005, 77 percent of Americans had Internet access at work and 37 percent of all adults had high-speed access to the Internet. The slight but steady decline in newspaper circulation suddenly steepened in 2004 and 2005. The circulation of daily newspapers would plunge 6.3 percent between 2003 and 2006, with Sunday circulation falling 8 percent. Newspaper advertising revenues, which had grown on average in the high single digits since 1950, beginning in 2001 fell in four of the next seven years, and in 2006 began to fall more steeply. With investors convinced that companies like Google would grow while newspapers would not, the stock price of newspaper companies also plunged-falling 20 percent on average in 2005-leaving them less capital to diversify by acquiring growth businesses. With search and Google News and other news aggregators culling reports from all over the world, readers could easily fetch their news for free online. Newspapers cried that Google and other Web sites that aggregated news lacked what elite newspapers offered: bureaus in Baghdad and state capitals, investigative reporting, professional editors, and familiar brand names that often stood for quality. But readers could effortlessly view their stories through Google News or Google search. By the end of 2005, 40 percent of American broadband users said they got their news online.

Much of the rest of old media was also challenged. Book sales were steady, but not robust, and the industry was anxious about the decline of independent bookstores and the new leverage exerted by giants like Barnes amp; Noble and Amazon.com. This anxiety was only inflamed by Google’s thrust into digitizing books. The movie and television and music industries were fretting about piracy. U.S. content and software companies lost an estimated $6.9 billion in revenues to piracy in 2005, and in China about 90 percent of all content and software was pirated. About one billion songs per month were swapped on illegal file-sharing networks. Although digital companies claimed piracy was hard to control, media executives rarely believed this. They believed digital companies were building their own audiences by stealing their content, particularly that of music companies. The lubricant of trust was missing. “I don’t believe they have any incentive to solve it,” said Sony CEO Sir Howard Stringer. With the rise of high-speed Internet connections, Hollywood knew its movies and TV programs were becoming more vulnerable to hackers and illegal downloads.

Television broadcasters were antsy about new user-generated online video companies like YouTube, a site that threatened to steal not just eyeballs from TV but perhaps its content as well. And YouTube was not their foremost threat. New consumer choices drained audiences from traditional media. Three years earlier, in 2002, there was a total of 308 cable and video networks, a number that had tripled from just eight years earlier, and would double over the next four. The radio industry was also squeezed by newer technologies that allowed the iPod and Internet and satellite radio to subvert their traditional ad-supported broadcast model. The phone companies nervously watched their traditional landline business erode, and with the 2005 acquisition by eBay of Skype, a largely free Internet phone/voice service, and Google’s voice-chat software also released that year, the erosion would accelerate. The cable companies were unsettled-as were all existing media-by how new media, from sharing networks like MySpace.com or Meetup.com to video games, captured the attention of their customers. MySpace was only three years old in 2006 but already had seventy million members.

And, of course, there was the advent of online advertising, which alarmed the traditional advertising industry. Google was able to sell advertising with just a few search words. The buy was more efficient because it was cheaper, better targeted, and Google only charged when the consumer actually clicked on an ad. Google could render traditional ad agencies extraneous middlemen to their clients. Irwin Gotlieb, the global CEO of GroupM, the world’s largest media buying and planning agency with a pool of sixty billion in advertising dollars, said that the bigger problem for his business was not Google supplanting his services, but its market power. With the IPO placing a value on Google greater than GroupM’s parent, the WPP group-plus the world’s four other advertising/marketing giants combined-Google had very deep pockets.

The CEO of one media conglomerate describes the media paranoia Google provoked as intense, adding, “It’s where Microsoft was. That paranoia is even greater about Google. The service is free. It’s hard to see how anybody knocks them out when it’s free. The brilliance of its business is that consumers love them. Consumers never loved Microsoft. They never loved the phone company. They don’t love the cable company. Because we have to get money! Advertisers get a better deal than they’ve ever gotten. Consumers get a better search. And it’s all free.” What terrifies media companies, he added, is Google’s ability and appetite to reach into other businesses, from mobile phones to computer operating systems to video and advertising and even banking. “Name a business that they’re not going to disrupt.”

In Google’s 2004 annual report, published in the spring of 2005, the founders gave old media executives more cause for concern. In the report was a letter to their shareholders announcing what they called their 70- 20-10 strategy. “Seventy percent of our effort goes to our core; our web search engine and our advertising network,” Brin wrote on behalf of himself and Page. He went on to say that it was desirable for Google to diversify and that is “why we allocate 20 percent for adjacent areas such as Gmail and Google Desktop Search. The remaining 10 percent is saved for anything else, giving us freedom to innovate.” The letter cited some new products Google invented or acquired: Google Maps, which allowed users to map directions; Google Earth, which provided satellite images of the earth’s nearly sixty million square miles, allowing users to zoom in to search teeming Calcutta streets or war-torn Baghdad; Google Scholar, which allowed researchers to access academic papers and research; Google Video, which allowed users to search television programs; and Gmail. Any media company paying attention saw that Google was not just a search engine.

Even new media was put on notice when, in 2004 and 2005, Google swooped in at the last minute to beat both Microsoft and Yahoo in auctions. The first came in October 2004. Brin and Page were on an overnight flight, heading to a Madrid sales conference on a chartered Boeing 737, when they learned from Omid Kordestani that AOL Europe was close to renewing its European contract with Yahoo. (Although AOL was losing subscribers, it still had more than twenty million worldwide in 2005, making it a valuable platform to generate more searches.) “We told the pilots to head to London,” where AOL’s European headquarters were located, recalled Brin. The founders’ families were aboard to accompany them from Madrid to Rome, where they were to receive an award from the prestigious Marconi Society for their scientific contributions. When they awoke, they were astonished to find that they were not in sunny Madrid but instead at Stansted Airport outside gray London.

Brin and Page drove to AOL’s European offices. Jonathan Miller, the chairman and CEO of AOL at the time, recalled the jolt he felt Monday morning when the head of AOL Europe phoned. Miller thought they had a deal with Yahoo, but now his European executive described the proposal made by Brin, who takes the lead in business negotiations: “He offered a number that was 40 percent higher than Yahoo’s. And he told us we had two weeks to get back to them.” There were, added a still stunned Miller, “no lawyers, no nothing.”

Google won the prize.

The second victory came a year later, in the fall of 2005. Tim Armstrong was attending meetings in Mountain View when Eric Schmidt entered and whispered, “We’re about to lose AOL to Microsoft.” The merger between AOL and Time Warner was not working; the touted synergies had not materialized. Into this chaos stepped Microsoft, determined to catch up in search. Back when Google was still headquartered in a garage, Gates and Microsoft had had it within their grasp to build a powerful search engine when it purchased an online advertising company, LinkExchange. Although the creator of LinkExchange, Ali Partovi, then twenty-six, told Microsoft that his partner, college dropout Scott Banister, had come up with a way to include ads in with search using keywords and that a search auction system would be “the next big thing,” Microsoft spurned the advice and declined to start a search engine. As first reported by Robert A. Guth in the Wall Street Journal, Microsoft believed the pot of gold lay not in tiny search text ads but in portals like their own MSN. But now Microsoft had launched its own search engine, Live Search, and with its deep pockets was seeking to replace Google as AOL’s domestic search engine.

Armstrong and others hammered out a counterproposal and showed it to Schmidt, before Armstrong flew back to New York to meet with Time Warner executives. Microsoft executives were on one floor, Google executives were on another, and Time Warner shuttled between them. At one point, Armstrong said, Microsoft left, “thinking they had the deal done. We stayed.” Schmidt flew to New York, as did Brin. In the end, Google and AOL reached agreement to become worldwide partners, with Google pledging to make more AOL content available to Google users, guarantee minimum annual advertising revenues to AOL, and invest one billion dollars to acquire a 5 percent stake in AOL.

Silicon Valley companies, accustomed to thinking of Microsoft as a foe, were now becoming uneasy about Google. When Yahoo executives read Google’s financial reports, they were punched in the nose with the realization of how much more successful and efficient Google was in selling search advertising. Google’s search business was growing twice as fast as Yahoo‘s, and was attracting more text ads. Yahoo poured engineering resources into a new automated ad-sales system, code-named “ Panama,” vowing that it would help them catch up. Microsoft and Yahoo conducted talks to see if there was a way to slow the Google juggernaut. And eBay, which had long sold advertising on Google, grew alarmed that Google had started a classified-advertising service that competed with its listings, and had inaugurated Google Checkout, which competed with its PayPal online payment service. So fearful of Google was eBay that the Wall Street Journal reported on its front page in 2006 that eBay was holding secret talks with Microsoft and Yahoo about allying against Google. Bill Gates further stoked the fever of fear when he told Fortune magazine that Google was “more like us than anyone else we have ever competed with.”

GOOGLE’S MANEUVERINGS AND DEALS may have made it unpopular with various media companies, but these did not tarnish Google’s image with the public. What happened in China did. In 2002, a Chinese-language version of Google search was launched, and then Google News in 2004. As user traffic mushroomed, the Chinese government found some of the news politically objectionable. China didn’t want users to be able to search for news about “free Tibet ” or for photos of Tiananmen Square protests. At first, Google refused to engage in any self-censorship. Often, the Chinese government banned Google searches. Senior Google executives believed they had to make a choice between denying Chinese citizens some political searches and denying them all searches. Google decided to comply with Chinese laws, stripped its news results of offending material and eventually, in 2006, created a separate search Web site, Google.cn, on which it would offer politically sanitized searches in China. If a user searched for a picture of Tiananmen Square on Google in London, The Guardian reported, the iconic picture of one man blocking a tank’s path appeared; if the same search was conducted on Google.cn, a picture “of happy smiley tourists” appeared.

Having escaped as a child from an oppressive government, Brin was anguished by the decision. Four years later, at Google’s annual shareholder meeting, two resolutions were introduced calling on Google to support human rights and oppose all forms of censorship in China; the resolutions implicitly rebuked Google. Page and Schmidt and Google management had the votes and defeated the resolution. Instead of vigorously opposing Google’s decision, Brin meekly abstained. When a shareholder rose to ask for an explanation, Brin gave a long tortured reply that vacillated between “I agreed with the spirit of the resolutions,” and “I am pretty proud of what we’ve been able to accomplish in China.”

Google rationalized its decision. Executives said they were complying with Chinese law, as they complied with German law to screen Nazi materials or would later comply with the government of Thailand by blocking YouTube videos that “defamed” the king. It said it was serving Chinese users, who still received more information from even a bowdlerized Google search than from any available alternative. It said that the Internet would, over time, help democratize China. And it said it would be transparent and notify users when search requests were blocked.

Google could also justifiably claim that it did not cross the line Yahoo had when, perhaps inadvertently, it shared with the Chinese government the e-mail accounts of prodemocracy journalists, resulting in long jail sentences for two journalists. But there was another reality Google confronted, and it was acknowledged in testimony made to Congress in February 2006 by Elliot Schrage, Google’s vice president, global communications and public affairs. Baidu, a Chinese search engine, had seen its market share jump from just below 3 percent in 2003 to 46 percent in 2005, he testified, while Google’s plunged to below 30 percent, and was falling. China was steering its citizens away from Google. “There is no question that, as a matter of business, we want to be active in China,” Schrage said, adding, “It would be disingenuous to say that we don’t care about that because, of course, we do.” What Schrage and Google were less transparent about was that Google had invested in Baidu, and presumably had to win the concurrence of the Chinese government in order to do so. The next year Google sold its 3 percent stake.

Perhaps for the first time, Google executives were feeling defensive, troubled that folks thought they had violated their “Don’t be evil” pledge. In the wake of China and the Google IPO, Eric Schmidt said he expanded his own job description. “It took me a while to figure out that we had to reach out to traditional media,” he said. “It’s part of acknowledging they are incumbents.” But he, like Google, was just making nice. “I’m happy to be diplomatic,” he added. “But I’m about winning!” What wasn’t clear was: Winning what? And at whose expense?

Schmidt was not diplomatic with Elinor Mills, a reporter for CNET News, a Web site that contains various online networks, including business news, technology, video games, and television programs. Mills in 2005 was working on a story about how much private information Google collected. As part of her research, she used Google search and Google Maps to run a quick search on Eric Schmidt. She located his Atherton home and address on Google Maps, his approximate net worth, political contributions, and a fair amount of other personal information. Then she published what she found, writing, “That such detailed personal information is so readily available on public Web sites makes most people uncomfortable.” It certainly made Schmidt uncomfortable.

“CNET was informed,” wrote Randall Stross, “that Google was unhappy with the use of Schmidt’s ‘private information’ in its story, and as punishment, Google as a matter of company policy would not respond to any questions or requests submitted by CNET reporters for one year.” Schmidt’s and Google’s reactions invited derision; Schmidt was accused of a “hissy fit.” Google executives tried to reason with Schmidt, to coax him to apologize, to end the ban. Months later, without offering an apology, Stross wrote that Google “quietly restored a normal working relationship with CNET.”

Google was becoming more defensive but also began to slowly worry about a potential threat far more powerful than any competitor: government. Google was alienating media companies, and when these companies speak, Washington listens. These companies are a major source of campaign funds and jobs; they provide the stage and microphone for elected officials. By 2005, broadcasters and telephone companies and others were raising questions about Google. Google may have been a multibillion dollar company, but it was unprepared to fight back. It had no political action committee; for a long time its only Washington presence was a one-man office located in suburban Maryland. This office reported to both David Drummond and Elliot Schrage in Mountain View. Drummond was supposed to oversee policy, and Schrage communications, which led to some confusion as the two often go hand in hand.

Although Google was not yet alarmed, it was on notice. At the weekly executive committee meetings, they talked about beefing up their presence in the nation’s capital. Brin volunteered to stop off in Washington to say hello to various government officials the next time he was back east visiting his parents in Maryland. But the the trip was hastily planned, as Brin admits: “Because it was the last minute, we didn’t schedule everything we wanted to.” Among the key people he didn’t get to see was Senator Ted Stevens of Alaska, then the chairman of the commerce committee, with jurisdiction over the Internet. (Senator Stevens’s knowledge of the Web appeared limited. He once referred to an e-mail by saying that “an Internet was sent by my staff.”) The Washington Post depicted the poor reception as a snub of Google; it probably didn’t help matters that Brin’s outfit that day included a dark T-shirt, jeans, and silver mesh sneakers.

Brin did manage to meet with senators John McCain and Barack Obama, and the topic was “network neutrality,” an effort by Google and others to ensure that the telephone and cable companies who provide high-speed access to the Internet didn’t charge higher fees to Web sites with heavy traffic. Around the time of Brin’s visit, an organization called Hands Off the Internet, financed by telecommunications companies, ran full-page newspaper advertisements accusing Google of wanting to create a monopoly and block “new innovation”; one ad featured a grainy photograph of a Google facility housing a sinister-looking “massive server farm.” Brin saw it for the warning it was. “I certainly realized we had to think about these things, and that people were going to misrepresent us,” he said. “We should be entitled to our representation in government.”

Like Microsoft in the late nineties, the Google leadership, “composed of ideological technologists,” as Schrage put it in 2007, was slow to appreciate the political and the human dimensions of the technical decisions it made. Schrage’s resume spans a law degree, years of teaching, a senior executive position at The Gap, and work as an international consultant on corporate social responsibility. He acknowledged that Google engineers were new to the ways of Washington. “Some call that naivete. Some might criticize this; others might applaud it. No question that people here regularly discuss Microsoft’s experience and use that as a cautionary tale.”

Later, meaning to explain rather than criticize, Schrage told me, “One can make the argument that the genes of technological innovation are frequently in conflict with emotional intelligence. Successful technological innovation is all about disruption. Effective emotional intelligence is all about collaboration, how you get talented people to work together and enjoy it.”

Collaboration was central to the thinking of Lawrence Lessig, who was widely hailed as an Internet oracle and was then teaching at Stanford Law School. Lessig had just been treated as such at Facebook, where he’d been invited to speak to its employees and expounded on the virtues of an open Web. Afterward, we had dinner at Il Fornaio in Palo Alto, which is a favorite Valley canteen, and there he asked, and answered, a central question people increasingly posed about Google: Is Google becoming what Microsoft was in 1998?

“The argument is that in an important way, they are the same,” he said. “In fact, whether now or soon, Google will have more power than Microsoft did at the time. Google’s power will extend to more than one layer of the network.” Microsoft’s power was its ability to leverage its potent operating system to control the various applications that use the operating system. So Microsoft offered a free browser to knock out the Netscape browser and attacked Java software that might “facilitate competition with the underlying operating system.”

Google’s power flows from a different source, he said. “They have produced this amazing machine for building data, and that data has its own ‘network effect’”-the more people who use it, the more data generated, the more advertisers flock to it. “Everything sits on top of that layer, starting with search. Every time you search, you give Google some value because you pick a certain result. And every time you pick a result, Google learns something from that. So each time you do a search, you’re adding value to Google’s data base. The data base becomes so rich that the advertising model that sits on top of it can out-compete other advertising models because it has better data… The potential here is actually that the data layer is more dangerous from a policy perspective because it cuts across layers of human life. So privacy and competition and access to commerce, and access to content-everything is driven by this underlying layer. Unlike the operating system, which couldn’t necessarily control the content that you got.

“The way they are different is that I don’t think there is any evidence that Google has misbehaved in the way Microsoft misbehaved when they tried to leverage the operating system to protect themselves against competition. So far, they’ve been good guys. But that leads to a question: Why do we expect them to be good guys from now till the end of time?”

Lessig, who benefits from the broad education and reading many Googlers lack, was nevertheless alert to how Google, like Microsoft, might become intoxicated by power and succumb to the same human failures. Of Google, he said, “I fear theirs is an old story about how good people deceive themselves. As Microsoft did in the nineties, you become so convinced that you are good that you become oblivious. I sense that is true at Google today. They’ve drunk the Kool-Aid.”