The Internet search giant was unstoppable in its first decade.
SAN FRANCISCO (Fortune) — Sergey Brin and Larry Page incorporated Google on Sept. 7, 1998, and set out to organize the world’s information on the Internet. Along the way, it turned Web search into an extremely lucrative business and became one of the world’s most valuable brands.
A lot of investors – not to mention Brin, Page and a small army of Google employees – cashed in too. Google’s August 2004 initial public offering was one of the most closely-watched of the decade. From $84 a share at its debut, the stock reached an all-time high of $741 a share last November before sliding 40% amid a broader market selloff.
“In many ways Google has become the standard bearer for the entire technology sector,” said Scott Kessler, an Internet analyst at Standard & Poor.
Now many industry watchers are asking what Google (GOOG, Fortune 500) can pull off a repeat performance before it hits the 20-year mark.
“Now,” said Kessler, “you have to start asking a lot of questions like, ‘How do they keep things going? How do they maintain their culture of success? How do they continue to deliver results?’”
It won’t be easy. Among other things, Google has seen a raft of high-profile departures in recent months, notably AdSense sales chief Sheryl Sandberg, who joined a number of ex-Googlers who have jumped to Facebook, now the up-and-coming startup.
Google is actively looking for its next big act. It’s invested heavily in other forms of advertising, including newspaper and radio ads. In March, it acquired ad server DoubleClick to better position itself to sell display advertising. This week the company unveiled a Web browser called Chrome to take on Microsoft’s (MSFT, Fortune 500) Internet Explorer. Later this year, Google will launch its Android operating system for mobile phones.
It’s too soon to tell if any of these products will turn Google into more than a one-hit wonder. Outside of text-based advertising, the company has struggled to make money from acquisitions like dMarc Broadcasting, whose technology links radio stations and advertisers, and the YouTube video-sharing site.
“Google thinks it can port its auction-based self-service model to other areas of advertising,” said Tom Wilde, the CEO of Everyzing, a video search company. “On an intellectual level, it makes sense. But so far that hasn’t translated well outside of paid search.”
Keeping investors happy is part of the growing pains that any successful, maturing company faces. Just don’t expect Google to find a predictable solution. “Google is not a conventional company,” cofounder Larry Page wrote in his first letter to shareholders in 2004. “We do not intend to become one.” To top of page
1998: Garage days
1999: VCs feel lucky
2000: The word is AdWords
2001: Adult supervision
Eric Schmidt replaces co-founder Larry Page as chief executive in August. Schmidt spent four years as CEO of software maker Novell before joining Google; before that he was the chief technology officer at Sun Microsystems. The company turns a profit for the first time.
2002: AOL chooses “the champ of search”
Google thrives even as the bursting of the dotcom bubble devastates scores of Internet companies. AOL Time Warner COO Bob Pittman (right) calls Google “the reigning champ of online search” as AOL abandons Overture search technology for Google’s. A new version of AdWords, which will prove to be a multibillion-dollar jackpot, lets advertisers bid on keywords to determine where their ads appear on search result pages.Yahoo drops the Google search logo from its homepage.
Annual revenue: $439 million
Profits: $99 million
Revenue growth: 409%
Employees: About 500
2003: Start making AdSense
2004: The IPO of the decade
In the most hotly-anticipated tech IPO since Netscape, Google goes public on Aug. 19 at $85 a share. By the end of the year, Google’s stock spikes to $195. The company launches its hugely popular Gmail message service. Orkut, a social-networking site, also debuts but fails to gain much traction, much like the Froogle comparison shopping site before it.
CEO Eric Schmidt mandates that meetings start seven minutes after the hour because that’s the way some college classes are run.
Annual revenue: $3.19 billion
Profits: $399 million
Revenue growth: 118%
Employees: 3,021
2005: Power player
2006: The Google of video
2007: A tale of two workplaces
Google tops Fortune’s Best Company to Work For rankings, thanks to fabulous perks and a stock that hits an all-time high of $741 in November. Even so, an exodus of top Googlers picks up as Gokul Rajaram, one of two senior AdSense execs, leaves to start his own company. Several star Googlers have since decamped to Facebook, including former AdWords sales chief Sheryl Sandberg.
Google changes its privacy policy to make users’ search data anonymous after 18 months.
Annual revenue: $16.6 billion
Profits: $4.2 billion
Revenue growth: 56.5%
Employees: 16,805
2008: Taking on Microsoft
Google goes after Microsoft on multiple fronts. The search giant completes its $3.1 billion acquisition of ad server DoubleClick, a company that Microsoft CEO Steve Ballmer (right) wanted. Google also strikes a search partnership with Yahoo, which Microsoft also wanted. In September, Google, its shares down 40% from their all-time high in 2007, takes on Microsoft’s Internet Explorer with its own Web browser, Chrome. Google also prepares to launch its Android mobile operating system to compete with the Apple iPhone and Microsoft’s Mobile OS.
Google’s 2008 international revenues are on track to exceed domestic sales for the first time.
No comments:
Post a Comment