By: Sam Poggi
1999 Google Inc.
 39 employees
 Mostly engineers
 Money was running out, and Google needed a
business model that would begin to bring in money
Google in 1999 cont…
 Could have made a deal with DoubleClick
 An ad network that specialized in graphical banners
 Turned down the opportunity because it went against
the ideals of page and Brin
 The ads had no relevance to anything
The New Approach
 They would sell only text adds to sponsors who
targeted particular key words
 Ex. “Ford cars”
 An ad for Ford Motor Company would appear above the
results
 They were sold on a cost per-thousand model (CPM)
 Advertisers paid by the number of impressions Google
delivered
 Ultimately if this philosophy did not work, Google
would make the deal with Double Click
Nasdaq Market Crash
 .com crash
 DoubleClick’s stock went from $150 to $15
 When the market crashed, Google looked to GoTo.com
for their business model
 Allowed Advertisers to buy text ads online with a credit
card
 Google separated the search results from the ad results
October 2000
 AdWords
 “Have a credit card and 5 minutes? Get your ad on
Google today.”
 Still maintained a CPM approach
 Advertisers paid by the impression, not by the click
 Became a big hit
Dealing with Growth
 In August 1999 , Google had 3 million search queries a
day
 By mid 2000, the search queries increased to 18 million
per day
 The Index surpassed 1 billion documents
 Making Google the largest search engine on the web
The Deal with Yahoo
 Google replaced Inktomi as Yahoo’s core search service
 The deal validated Google’s technology, and brought
more people to the site
 Yahoo bought a $10 million dollar equity stake in
Google
Late 2000
 Adwords debuts
 Google was having 60 million search queries per day
 Google had yet to spend any money on marketing
Advertising and Marketing
 Everyone else in the search business was advertising
 Google began to look for a way to advertise, but
ultimately found none
 Google then scratched the plan to market and decided
to use PR as a tool for getting people to read and talk
about Google
Google’s Expansion
 Google went from a few employees to forty in its first
year, then to 150 by 2000
 Google had a very strict hiring process, often times
they would debate for hours about a particular
candidate
 Google wanted to avoid the hiring spiral
Eric Schmidt
 CEO of Google since 2001
 Went to Berkley
 Since he took over the company has never had a down
quarter
Growing too much?
 By July 2001 Google had over 200 employees and were
hiring five more per week
 The hiring spiral became a real threat
 “Don’t be evil”
 This was put in the corner of every blackboard to remind
people to have good business ethics
2001: The Year Google Got Big
 Handling more than 100 million searches per day
 Acquired DejaNews
 A public messaging system with nearly 500 million posts
on a wide variety of subjects
 Much faster than just using the web crawler
 Google then went on to buy Blogger, Picasa, and
Keyhole
 These launched Google print
 Google Images ballooned to 250 million images
 Overall, Google had over 3 billion total documents
2001, Cont.
 Serving search queries in 40 different languages
 Entry into the mobile phone market
 Partnerships with Cingular, AT&T, and Handspring
 Brin and Page ultimately regained control of the
company, and made all ideas go through them
2001: Cont.
 AdWords was growing rapidly
 $85 million in revenue
 Overture had $288 million in revenue, and Google
took note of their pay-per click method
 In Overture’s model, advertisers could buy the top link
 Google made a model where they ranked the ads based
off their popularity and cost per click
 This was called AdRank
AdSense
 AdSense allowed third party-publishers to access
Google’s network of Advertisers and sign up for
AdSense
 Google would then scan the site and place relevant ads
on the site similar to the way Google does for itself
 By 2005 it was 15% of Google’s overall revenues