Although Google Finance, which is so new it isn’t even mentioned in Auletta’s book, is ranked only 17th among business and finance news sites, it’s a fair bet that it will soon join the ranks of other Google money makers like Gmail, Google Analytics, Google Books, Google Earth, Google Health, Google Maps, Google News, Google Video, Google Voice, AdSense, AdWords, DoubleClick and the ubiquitous YouTube, which Google bought for $1.65 billion in October 2006.
As Auletta, whose 10 books about the leading figures and companies of the Information Age have made him America’s premier media critic, notes, the importance of the YouTube acquisition was, like Google’s and YouTube’s ambitions, immense.
“[Google’s] stock value at the time the deal was announced was $132 billion, giving it a competitive advantage over the largest media companies on earth, none of which was worth more than one-third this amount. Those still oblivious to the challenge posed by Google were awakened by the YouTube acquisition. ‘They can buy anything they want, or lose money on anything they choose to,’ said Irwin Gotlieb [a powerful Hollywood advertising executive].”
Auletta adds, “More ominous for traditional media, Google, despite its denials, was now in the content business. Like the television networks, YouTube publishes content produced by others and sells advertising. The more consumers linger on YouTube, the more pages they views, and the more page views, the more YouTube’s ad rates rise. In search, Google sped users off its site without any particular interest in their destination; with YouTube, it had a stake.”
The credibility of Auletta’s book is buttressed by his access to Google’s top executives, especially its charismatic and iconoclastic founders, Larry Page and Sergey Brin; CEO Eric Schmidt; and some 150 present and former employees. Googled illuminates the unconventional management style that led to Google’s unprecedented growth since Stanford Ph.D. engineering candidates Page and Brin founded it in a Mountain View, Calif., garage in 1998 with a mission statement that proclaimed their intent “to organize the world’s information and make it universally accessible and useful.”
That they succeeded beyond their dreams is undeniable. Google has been sensationally successful in doing just that. As Schmidt and the founders told Auletta, they chose the name Google to replace “BackRub” because Google is a common spelling of googol, or 10 to the 100th power, “and fits well with our goal of building very large-scale search engines.”
Google has been so successful, in fact, that it’s likely to be the Justice Department’s next big antitrust target. Its controversial efforts to digitize the world’s books, and charges by competing companies that it unfairly monopolizes search results and ad placements, make it an even bet that federal trustbusters will go after it, just as they did Bill Gates’s Microsoft a decade ago. “The issue is going to be concentration of power,” says Auletta.
“The goal was to get better answers to search inquiries. 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 webpages.”
Well, let’s just test this vaunted search engine by Googling Ken Auletta’s name and book. Here’s what Publishers Weekly said about it in November:
“Two Googles emerge in this savvy profile of the Internet search octopus. The first is the actual company, with its mixture of business acumen and naïve idealism (Don’t Be Evil is the corporate slogan); its brilliant engineering feats and grad-students-at-play company culture; its geek founders, Sergey Brin and Larry Page, two billionaires who imbibe their antiestablishment rectitude straight from Burning Man; its pseudo-altruistic quest to offer all the world’s information for free while selling all the world’s advertising at a hefty profit.
“The second Google is a monstrous metaphor for all the creative destruction that the Internet has wrought on the crumbling titans of old media, who find themselves desperately wondering how they will make money off of news, music, video and books now that people can Google up all these things without paying a dime.
“The first Google makes for a standard-issue tech-industry grunge-to-riches business story, its main entertainment value being Brin’s and Page’s comical lack of social graces. But … Auletta makes the second Google a starting point for a sharp and probing analysis of the apocalyptic upheavals in the media and entertainment industries.”
Couldn’t have said it better myself.
(Reviewed by Al Eisele, Editor-At-Large for The Hill. He also writes at HuffingtonPost.com)