Patrick Chataignier

You want to learn about recipes to succeed in Internet?  Look carefully how this major actor of Internet built its success!

The Early years 1998-2005(1/3)

Is it really possible to write articles for one’s consultants’ agency on the Internet subject and not write about the most important actor…which is Google? “Definitely not” seems to be the correct answer to the former question.

So, time is ripe to make up for this. There are so many interesting facts and figures together with analyses to perform on Google that I invite you on a “Trilogy” travel to be spread on the next months.

On this first article, let’s have a look on the start of Google.

In the IT environment, good stories always start in a garage. That was the case with these two students from Stanford University, Larry Page and Sergey Brin who claimed in 1998 they could build a company able to “organise World information and make it reachable and useful for all“. The initial capital base was 1 million $ thanks to friends, relatives and private funds.

In 1999, they raised additional investments (25 million $) to improve their research engine, capable of cross finding information between sites better than Yahoo or Altavista were doing. At a time when competitors choose to propose multiple services on their portal, Google was only focusing on the research tools and decided to keep a free service for companies eager to be referenced on their portal.

In retrospect it seems so obvious but that was a bright move which is still at the heart of Internet today and these now famous “economic models” to be found I looked upon last month in this blog. Because, guess what? Altavista and some others went for a paying service at the end of 2001. If you want to learn about what happened to Altavista, I invite you to type Altavista on Google and find out about their story…

In 2002 Google launched Google Labs to increase innovative services and Google news dedicated to research in “News” area. The next big step towards success for Google was the launch of Adwords in 2002 enabling companies to display adverts adapted to the content delivered by the search engine. AdWords ads are displayed along with search results on Google and there are costs for advertisers only when people click on them (Cost per Click). When you create a Google AdWords ad, you choose keywords for which your ad will appear and specify the maximum amount you’re willing to pay for each click. This ad ecosystem aiming at satisfying both advertisers and users is managed thanks to an auction rule that can not been described simply by words. But you really should have a look at this video where Hal Varian (chief economist at Google) explains this brilliant policy.

Up to now, you easily understand that Google became an advertising agency on top of an Online research company. In 2003 it extended the Google Adwords for web publishers with Google Adsense, enabling the display of Google adwords on other web sites. Google provides web publishers with AdSense HTML ad code to place on their web pages on which these latter can display AdWords ads.

In March 2004, Google starts to dig at Microsoft with the launch of Gmail. New services followed suit such as Gtalk (IM service), Gsms (sms sending).

Since 2001, Google also bought companies (8 until 2003) to grow even more and propose new services. In 2004 they swallowed five other firms, with among them Picasa (photo management), Keyhole (Google earth) and Where 2 (Google maps).

I suggest we follow the story next month to see what became the strategy of Google from year 2005. What should be remembered so far? The major Actor of Internet built it first successes on a free model sponsored by a brilliant management of advertising, while never stopping to innovate and expand. Internet is not an environment where you can sleep on your original strategy.

by Patrick Chataignier

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