Google was founded in 1996 by Larry Page and Sergey Brin while they were Ph.D. students at Stanford University, California. Together, they own about 14 percent of its shares and control 56 percent of the stockholder voting power through supervoting stock. They incorporated Google as a privately held company on September 4, 1998. An initial public offering (IPO) took place on August 19, 2004, and Google moved to its new headquarters in Mountain View, California, nicknamed the Googleplex.
In August 2015, Google announced plans to reorganize its interests as a holding company called Alphabet Inc. When this restructuring took place on October 2, 2015, Google became Alphabet’s leading subsidiary, as well as the parent for Google’s Internet interests.
Rapid growth since incorporation has triggered a chain of products, acquisitions and partnerships beyond Google’s core search engine (Google Search). It offers services designed for work and productivity (Google Docs, Sheets and Slides), email (Gmail), scheduling and time management (Google Calendar), cloud storage (Google Drive), social networking (Google+), instant messaging and video chat (Google Allo/Duo/Hangouts), language translation (Google Translate), mapping and turn-by-turn navigation (Google Maps), video-sharing (YouTube), taking notes (Google Keep), organizing and editing photos (Google Photos), and a web browser (Google Chrome). The company leads the development of the Android mobile operating system and the browser-only Chrome OS for a class of netbooks known as Chromebooks and desktop PCs known as Chromeboxes. Google has moved increasingly into hardware; from 2010 to 2015, it partnered with major electronics manufacturers in the production of its Nexus devices, and in October 2016, it launched multiple hardware products (the Google Pixel, Home, Wifi, and Daydream View), with new hardware chief Rick Osterloh stating that “a lot of the innovation that we want to do now ends up requiring controlling the end-to-end user experience”. In 2012, a fiber-optic infrastructure was installed in Kansas City to facilitate a Google Fiber broadband service, and in 2016, the company launched the Google Station initiative to make public “high-quality, secure, easily accessible Wi-Fi” around the world, which had already started, and become a success, in India.
Google has been estimated to run more than one million servers in data centers around the world (as of 2007). It processes over one billion search requests and about 24 petabytes of user-generated data each day (as of 2009). In December 2013, Alexa listed Google.com as the most visited website in the world. Numerous Google sites in other languages figure in the top one hundred, as do several other Google-owned sites such as YouTube and Blogger.
Google has been the second most valuable brand in the world for 4 consecutive years, and has a valuation in 2016 at $133 billion. Google’s mission statement from the outset was “to organize the world’s information and make it universally accessible and useful,” and its unofficial slogan was “Don’t be evil”. In October 2015, the motto was replaced in the Alphabet corporate code of conduct by the phrase: “Do the right thing”. Google’s commitment to such robust idealism has been increasingly called into doubt due to a number of actions and behaviours which appear to contradict this.
Google began in January 1996 as a research project by Larry Page and Sergey Brin when they were both PhD students at Stanford University in Stanford, California.
While conventional search engines ranked results by counting how many times the search terms appeared on the page, the two theorized about a better system that analyzed the relationships between websites. They called this new technology PageRank; it determined a website’s relevance by the number of pages, and the importance of those pages, that linked back to the original site.
Page and Brin originally nicknamed their new search engine “BackRub”, because the system checked backlinks to estimate the importance of a site. Eventually, they changed the name to Google, originating from a misspelling of the word “googol”, the number one followed by one hundred zeros, which was picked to signify that the search engine was intended to provide large quantities of information. Originally, Google ran under Stanford University’s website, with the domains google.stanford.edu and z.stanford.edu.
The domain name for Google was registered on September 15, 1997, and the company was incorporated on September 4, 1998. It was based in the garage of a friend (Susan Wojcicki) in Menlo Park, California. Craig Silverstein, a fellow PhD student at Stanford, was hired as the first employee.
In May 2011, the number of monthly unique visitors to Google surpassed one billion for the first time, an 8.4 percent increase from May 2010 (931 million). In January 2013, Google announced it had earned US$50 billion in annual revenue for the year of 2012. This marked the first time the company had reached this feat, topping their 2011 total of $38 billion.
The company has reported fourth quarter (Dec 2014) Earnings Per Share (EPS) of $6.88 – $0.20 under projections. Revenue came in at $14.5 billion (16.9% growth year over year), also under expectations by $110 million.
Financing, 1998 and initial public offering, 2004
The first funding for Google was an August 1998 contribution of $100,000 from Andy Bechtolsheim, co-founder of Sun Microsystems, given before Google was incorporated. Early in 1999, while graduate students, Brin and Page decided that the search engine they had developed was taking up too much time and distracting their academic pursuits. They went to Excite CEO George Bell and offered to sell it to him for $1 million. He rejected the offer and later criticized Vinod Khosla, one of Excite’s venture capitalists, after he negotiated Brin and Page down to $750,000. On June 7, 1999, a $25 million round of funding was announced, with major investors including the venture capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital.
Google’s initial public offering (IPO) took place five years later on August 19, 2004. At that time Larry Page, Sergey Brin, and Eric Schmidt agreed to work together at Google for 20 years, until the year 2024. The company offered 19,605,052 shares at a price of $85 per share. Shares were sold in an online auction format using a system built by Morgan Stanley and Credit Suisse, underwriters for the deal. The sale of $1.67 bn (billion) gave Google a market capitalization of more than $23bn. By January 2014, its market capitalization had grown to $397bn. The vast majority of the 271 million shares remained under the control of Google, and many Google employees became instant paper millionaires. Yahoo!, a competitor of Google, also benefited because it owned 8.4 million shares of Google before the IPO took place.
There were concerns that Google’s IPO would lead to changes in company culture. Reasons ranged from shareholder pressure for employee benefit reductions to the fact that many company executives would become instant paper millionaires. As a reply to this concern, co-founders Sergey Brin and Larry Page promised in a report to potential investors that the IPO would not change the company’s culture. In 2005, articles in The New York Times and other sources began suggesting that Google had lost its anti-corporate, no evil philosophy. In an effort to maintain the company’s unique culture, Google designated a Chief Culture Officer, who also serves as the Director of Human Resources. The purpose of the Chief Culture Officer is to develop and maintain the culture and work on ways to keep true to the core values that the company was founded on: a flat organization with a collaborative environment. Google has also faced allegations of sexism and ageism from former employees. In 2013, a class action against several Silicon Valley companies, including Google, was filed for alleged “no cold call” agreements which restrained the recruitment of high-tech employees.
The stock performed well after the IPO, with shares hitting $350 for the first time on October 31, 2007, primarily because of strong sales and earnings in the online advertising market. The surge in stock price was fueled mainly by individual investors, as opposed to large institutional investors and mutual funds. GOOG shares split into GOOG Class C shares and GOOGL class A shares. The company is listed on the NASDAQ stock exchange under the ticker symbols GOOGL and GOOG, and on the Frankfurt Stock Exchange under the ticker symbol GGQ1. These ticker symbols now refer to Alphabet Inc., Google’s holding company, since the fourth quarter of 2015.
In March 1999, the company moved its offices to Palo Alto, California, which is home to several prominent Silicon Valley technology start-ups. The next year, against Page and Brin’s initial opposition toward an advertising-funded search engine, Google began selling advertisements associated with search keywords. In order to maintain an uncluttered page design and increase speed, advertisements were solely text-based. Keywords were sold based on a combination of price bids and click-throughs, with bidding starting at five cents per click.
This model of selling keyword advertising was first pioneered by Goto.com, an Idealab spin-off created by Bill Gross. When the company changed names to Overture Services, it sued Google over alleged infringements of the company’s pay-per-click and bidding patents. Overture Services would later be bought by Yahoo! and renamed Yahoo! Search Marketing. The case was then settled out of court; Google agreed to issue shares of common stock to Yahoo! in exchange for a perpetual license.
In 2001, Google received a patent for its PageRank mechanism. The patent was officially assigned to Stanford University and lists Lawrence Page as the inventor. In 2003, after outgrowing two other locations, the company leased an office complex from Silicon Graphics at 1600 Amphitheatre Parkway in Mountain View, California. The complex became known as the Googleplex, a play on the word googolplex, the number one followed by a googol zeroes. The Googleplex interiors were designed by Clive Wilkinson Architects. Three years later, Google bought the property from SGI for $319 million. By that time, the name “Google” had found its way into everyday language, causing the verb “google” to be added to the Merriam-Webster Collegiate Dictionary and the Oxford English Dictionary, denoted as “to use the Google search engine to obtain information on the Internet”. The first use of “Google” as a verb in pop culture (TV) happened on Buffy the Vampire Slayer in 2002.
The immense popularity of the search engine has led its fans calling themselves ‘Googlists’ as they follow ‘Googlism’, the new religion. Devotees of Google have found a non-profit online organization The Church of Google, a website where they worship the search engine giant. The New York Times had discussed the topic “Is Google God?” under its ‘opinion’ category.
Google announced the launch of a new company called Calico on September 19, 2013, which will be led by Apple chairman Arthur Levinson. In the official public statement, Page explained that the “health and well-being” company will focus on “the challenge of ageing and associated diseases”.
Google celebrated its 15-year anniversary on September 27, 2013, and in 2016 it celebrated its 18th birthday with an animated Doodle shown on web browsers around the world. although it has used other dates for its official birthday. The reason for the choice of September 27 remains unclear, and a dispute with rival search engine Yahoo! Search in 2005 has been suggested as the cause.
The Alliance for Affordable Internet (A4AI) was launched in October 2013 and Google is part of the coalition of public and private organisations that also includes Facebook, Intel and Microsoft. Led by Sir Tim Berners-Lee, the A4AI seeks to make Internet access more affordable so that access is broadened in the developing world, where only 31% of people are online. Google will help to decrease Internet access prices so that they fall below the UN Broadband Commission’s worldwide target of 5% of monthly income.
The corporation’s consolidated revenue for the third quarter of 2013 is reported in mid-October 2013 as $14.89 billion, a 12 percent increase compared to the previous quarter. Google’s Internet business was responsible for $10.8 billion of this total, with an increase in the number of users’ clicks on advertisements.
In November 2013, Google announced plans for a new 1-million-sq-ft (93,000 sq m) office in London, which is due to open in 2016. The new premises will be able to accommodate 4,500 employees and has been identified as one of the biggest ever commercial property acquisitions in Britain.
According to Interbrand’s annual Best Global Brands report, Google has been the second most valuable brand in the world (behind Apple Inc.) in 2013, 2015, and 2016, with a valuation of $133 billion.
In September 2015, Google engineering manager Rachel Potvin revealed details about Google’s software code at an engineering conference. She revealed that the entire Google codebase, which spans every single service it develops, consists of over 2 billion lines of code. All that code is stored on a code repository available to all 25,000 Google engineers, and the code is regularly copied and updated on 10 Google data centers. To keep control, Potvin said Google has built its own “version control system”, called “Piper”, and that “when you start a new project, you have a wealth of libraries already available to you. Almost everything has already been done.” Engineers can make a single code change and deploy it on all services at the same time. The only major exceptions are that the PageRank search results algorithm is stored separately with only specific employee access, and the code for the Android operating system and the Google Chrome browser are also stored separately as they don’t run on the Internet. The “Piper” system spans 85 TB of data, and Google engineers make 25,000 changes to the code each day, and on a weekly basis change approximately 15 million lines of code across 250,000 files. With that much code, automated bots have to help, with Potvin saying, “You need to make a concerted effort to maintain code health. And this is not just humans maintaining code health, but robots too.” Bots aren’t writing code, but generating a lot of the data and configuration files needed to run the company’s software. “Not only is the size of the repository increasing,” Potvin explained, “but the rate of change is also increasing. This is an exponential curve.”
In September 2016, Google released its Google Trips app for Android and iOS. The app, which automatically gathers information about upcoming trips users take based on the user’s Gmail messages, offers recommendations for places to go, things to do, and anything interesting to explore during the user’s travel. Google states that “each trip contains key categories of information, including day plans, reservations, things to do, food & drink, and more” in trip cards in the app, and that offline availability is supported.
Also in September 2016, Google began expanding its Google Station initiative, which was previously a project for public Wi-Fi at railway stations in India. Caesar Sengupta, VP for Google’s next billion users, told The Verge that 15,000 people get online for the first time thanks to Google Station, and that 3.5 million people use the service every month. The expansion meant that Google was looking for partners around the world to further develop the initiative, which promised “high-quality, secure, easily accessible Wi-Fi”.
As of October 2016, Google operates 70 offices in more than 40 countries.
Push into hardware
In April 2016, Recode reported that Google had hired Rick Osterloh, Motorola Mobility’s former President, to be in charge of Google’s new hardware division. Later, in October 2016, The Information reported that David Foster, Amazon.com’s former Kindle hardware chief, had joined Google as hardware chief for a new brand of smartphones by Google.
On October 4, 2016, Google held a #MadeByGoogle press event, where it announced its intention to create more hardware, with Rick Osterloh stating that “a lot of the innovation that we want to do now ends up requiring controlling the end-to-end user experience”, and introduced:
The Pixel and Pixel XL smartphones with the Google Assistant, a next-generation contextual voice assistant, built-in.
Google Home, an Amazon Echo-like voice assistant placed in the house that can answer voice queries, play music, find information from apps (calendar, weather etc.), and control third-party smart home appliances (users can tell it to turn on the lights, for example).
Daydream View virtual reality headset that lets Android users with compatible Daydream-ready smartphones put their phones in the headset and enjoy VR content.
Google Wifi, a connected set of Wi-Fi routers to simplify and extend coverage of home Wi-Fi.