Early history
Beginning
Google began in March 1995 as a research project by Larry Page and Sergey Brin, Ph.D. students at Stanford University.[2]
In search of a dissertation theme, Page had been considering—among other things—exploring the mathematical properties of the World Wide Web, understanding its link structure as a huge graph.[3] His supervisor, Terry Winograd, encouraged him to pick this idea (which Page later recalled as "the best advice I ever got"[4]) and Page focused on the problem of finding out which web pages link to a given page, based on the consideration that the number and nature of such backlinks was valuable information for an analysis of that page (with the role of citations in academic publishing in mind).[3]
In his research project, nicknamed "BackRub", Page was soon joined by Brin, who was supported by a National Science Foundation Graduate Fellowship.[5] Brin was already a close friend, whom Page had first met in the summer of 1995—Page was part of a group of potential new students that Brin had volunteered to show around the campus.[3] Both Brin and Page were working on the Stanford Digital Library Project (SDLP). The SDLP's goal was “to develop the enabling technologies for a single, integrated and universal digital library" and it was funded through the National Science Foundation, among other federal agencies.
Page's web crawler began exploring the web in March 1996, with Page's own Stanford home page serving as the only starting point.[3] To convert the backlink data that it gathered for a given web page into a measure of importance, Brin and Page developed the PageRankalgorithm.[3] While analyzing BackRub's output—which, for a given URL, consisted of a list of backlinks ranked by importance—the pair realized that a search engine based on PageRank would produce better results than existing techniques (existing search engines at the time essentially ranked results according to how many times the search term appeared on a page).[3][9]
Convinced that the pages with the most links to them from other highly relevant Web pages must be the most relevant pages associated with the search, Page and Brin tested their thesis as part of their studies, and laid the foundation for their search engine.:[10]
-
- Some Rough Statistics (from August 29th, 1996)
- Total indexable HTML urls: 75.2306 Million
- Total content downloaded: 207.022 gigabytes
- ...
-
- BackRub is written in Java and Python and runs on several Sun Ultras and Intel Pentiums running Linux. The primary database is kept on a Sun Ultra II with 28GB of disk. Scott Hassan and Alan Steremberg have provided a great deal of very talented implementation help. Sergey Brin has also been very involved and deserves many thanks.
- -Larry Page [11]
- BackRub is written in Java and Python and runs on several Sun Ultras and Intel Pentiums running Linux. The primary database is kept on a Sun Ultra II with 28GB of disk. Scott Hassan and Alan Steremberg have provided a great deal of very talented implementation help. Sergey Brin has also been very involved and deserves many thanks.
Late 1990s
Originally the search engine used Stanford's website with the domain google.stanford.edu. The domain google.com was registered on September 15, 1997. They formally incorporated their company, Google, on September 4, 1998 at a friend's (Susan Wojcicki) garage in Menlo Park, California.
The first patent filed under the name "Google Inc." was filed on August 31, 1999. This patent, filed by Siu-Leong Iu, Malcom Davis, Hui Luo, Yun-Ting Lin, Guillaume Mercier, and Kobad Bugwadia, is titled "Watermarking system and methodology for digital multimedia content" and is the earliest patent filing under the assignee name "Google Inc."[12][13]
Both Brin and Page had been against using advertising pop-ups in a search engine, or an "advertising funded search engines" model, and they wrote a research paper in 1998 on the topic while still students. They changed their minds early on and allowed simple text ads.[14]
By the end of 1998, Google had an index of about 60 million pages.[15] The home page was still marked "BETA", but an article in Salon.com already argued that Google's search results were better than those of competitors like Hotbot or Excite.com, and praised it for being more technologically innovative than the overloaded portal sites (like Yahoo!, Excite.com, Lycos, Netscape's Netcenter, AOL.com, Go.com and MSN.com) which at that time, during the growing dot-com bubble, were seen as "the future of the Web", especially by stock market investors.[15]
In March 1999, the company moved into offices at 165 University Avenue in Palo Alto, home to several other noted Silicon Valley technology startups.[16] After quickly outgrowing two other sites, the company leased a complex of buildings in Mountain View at 1600 Amphitheatre Parkway from Silicon Graphics (SGI) in 2003.[17] The company has remained at this location ever since, and the complex has since become known as the Googleplex (a play on the word googolplex, a number that is equal to 1 followed by a googol of zeros). In 2006, Google bought the property from SGI for US$319 million.[18]
2000s
The Google search engine attracted a loyal following among the growing number of Internet users, who liked its simple design.[19] In 2000, Google began selling advertisementsassociated with search keywords.[2] The ads were text-based to maintain an uncluttered page design and to maximize page loading speed.[2] Keywords were sold based on a combination of price bid and click-throughs, with bidding starting at $.05 per click.[2] This model of selling keyword advertising was pioneered by Goto.com (later renamed Overture Services, before being acquired by Yahoo! and rebranded as Yahoo! Search Marketing).[20][21][22] While many of its dot-com rivals failed in the new Internet marketplace, Google quietly rose in stature while generating revenue.[2]
Google's declared code of conduct is "Don't be evil", a phrase which they went so far as to include in their prospectus (aka "S-1") for their 2004 IPO, noting that "We believe strongly that in the long term, we will be better served—as shareholders and in all other ways—by a company that does good things for the world even if we forgo some short term gains."[23]
Financing and initial public offering
The first funding for Google as a company was secured in August 1998 in the form of a US$100,000 contribution from Andy Bechtolsheim, co-founder of Sun Microsystems, given to a corporation which did not yet exist.[24]
On June 7, 1999, a round of equity funding totalling $25 million was announced;[25] the major investors being rival venture capital firms Kleiner Perkins Caufield & Byers andSequoia Capital.[24] While Google still needed more funding for their further expansion, Brin and Page were hesitant to take the company public, despite their financial issues. They were not ready to give up control over Google.
Following the closing of the $25 million financing round, Sequoia encouraged Brin and Page to hire a CEO. Brin and Page ultimately acquiesced and hired Eric Schmidt as Google’s first CEO in March 2001.[26]
In October 2003, while discussing a possible initial public offering of shares (IPO), Microsoft approached the company about a possible partnership or merger.[27] The deal never materialized. In January 2004, Google announced the hiring of Morgan Stanley and Goldman Sachs Group to arrange an IPO. The IPO was projected to raise as much as $4 billion.
Google's initial public offering took place on August 19, 2004.[28] A total of 19,605,052 shares were offered at a price of $85 per share.[29] Of that, 14,142,135 (another mathematical reference as √2 ≈ 1.4142135) were floated by Google and 5,462,917 by selling stockholders. The sale raised US$1.67 billion, and gave Google a market capitalization of more than $23 billion.[30] Many of Google's employees became instant paper millionaires. Yahoo!, a competitor of Google, also benefited from the IPO because it owns 2.7 million shares of Google.[31]
The company is listed on the NASDAQ stock exchange under the ticker symbol GOOG.
Growth
2003[edit]
 | This section does not cite any sources. (January 2015) |
In February 2003, Google acquired Pyra Labs, owner of Blogger, a web log hosting website. The acquisition secured the company's competitive ability to use information gleaned from blog postings to improve the speed and relevance of articles contained in a companion product to the search engine Google News.
2004
At its peak in early 2004, Google handled upwards of 84.7% of all search requests on the World Wide Web through its website and through its partnerships with other Internet clients like Yahoo!, AOL, and CNN.[citation needed] In February 2004, Yahoo! dropped its partnership with Google, providing an independent search engine of its own. This cost Google some market share, yet Yahoo!'s move highlighted Google's own distinctiveness, and today[when?] the verb "to google" has entered a number of languages (first as a slang verb and now as a standard word), meaning "to perform a web search" (a possible indication of "Google" becoming a genericized trademark).[citation needed]
After the IPO, Google's stock market capitalization rose greatly and the stock price more than quadrupled. On August 19, 2004 the number of shares outstanding was 172.85 million while the "free float" was 19.60 million (which makes 89% held by insiders). In January 2005 the number of shares outstanding was up 100 million to 273.42 million, 53% of that was held by insiders, which made the float 127.70 million (up 110 million shares from the first trading day).[citation needed]} The two founders were said to hold almost 30% of the outstanding shares.[citation needed] The actual voting power of the insiders was much higher, as Google has a dual class stock structure in which each Class B share gets ten votes compared to each Class A share getting one. Page says in the prospectus that Google has "a dual class structure that is biased toward stability and independence and that requires investors to bet on the team, especially Sergey and me." The company had not reported any treasury stock holdings as of the Q3 2004 report.
2005
On June 1, 2005, Google shares gained nearly four percent after Credit Suisse First Boston raised its price target on the stock to $350. On that same day, rumors circulated in the financial community that Google would soon be included in the S&P 500.[32] When companies are first listed on the S&P 500 they typically experience a bump in share price due to rapid accumulation of the stock within index funds that track the S&P 500. Google was not added to the S&P 500 until 2006. Nevertheless, on June 7, 2005, Google was valued at nearly $52 billion, making it one of the world's biggest media companies by stock market value.
On August 18, 2005 (one year after the initial IPO), Google announced that it would sell 14,159,265 (another mathematical reference as π ≈ 3.14159265) more shares of its stock to raise money. The move would double Google's cash stockpile to $7 billion. Google said it would use the money for "acquisitions of complementary businesses, technologies or other assets".[33]
On September 28, 2005, Google announced a long-term research partnership with NASA which would involve Google building a 1,000,000-square-foot (93,000 m2) R&D center at NASA's Ames Research Center, and on December 31, 2005 Time Warner's AOL unit and Google unveiled an expanded partnership—see Partnerships below.
Additionally in 2005, Google formed a partnership with Sun Microsystems to help share and distribute each other's technologies. As part of the partnership Google will hire employees to help in the open source office program OpenOffice.org.[34]
With Google's increased size came more competition from large mainstream technology companies. One such example is the rivalry between Microsoft and Google.[35]Microsoft had been touting its Bing search engine to counter Google's competitive position. Furthermore, the two companies are increasingly offering overlapping services, such as webmail (Gmail vs. Hotmail), search (both online and local desktop searching), and other applications (for example, Microsoft's Windows Live Local competes with Google Earth). In addition to an Internet Explorer replacement Google designed its own Linux-based operating system called Chrome OS to directly compete with Microsoft Windows. There were also rumors of a Google web browser, fueled much by the fact that Google is the owner of the domain name "gbrowser.com". These were later proven when Google released Google Chrome. This corporate feud boiled over into the courts when Kai-Fu Lee, a former vice-president of Microsoft, quit Microsoft to work for Google. Microsoft sued to stop his move by citing Lee's non-compete contract (he had access to much sensitive information regarding Microsoft's plans in China). Google and Microsoft reached a settlement out of court on December 22, 2005, the terms of which are confidential.[36]
Click fraud also became a growing problem for Google's business strategy. Google's CFO George Reyes said in a December 2004 investor conference that "something has to be done about this really, really quickly, because I think, potentially, it threatens our business model."[37]
2006
While the company's primary market is in the web content arena, Google has experimented with other markets, such as radio and print publications. On January 17, 2006, Google announced that it had purchased the radio advertising company dMarc, which provides an automated system that allows companies to advertise on the radio.[38] Google also began an experiment in selling advertisements from its advertisers in offline newspapers and magazines, with select advertisements in the Chicago Sun-Times.[39]
During the third quarter 2005 Google Conference Call, Eric Schmidt said, "We don't do the same thing as everyone else does. And so if you try to predict our product strategy by simply saying well so and so has this and Google will do the same thing, it's almost always the wrong answer. We look at markets as they exist and we assume they are pretty well served by their existing players. We try to see new problems and new markets using the technology that others use and we build."
After months of speculation, Google was added to the Standard & Poor's 500 index (S&P 500) on March 31, 2006.[40] Google replaced Burlington Resources, a major oil producer based in Houston that had been acquired by ConocoPhillips.[41] The day after the announcement Google's share price rose by 7%.
Source: https://en.wikipedia.org/wiki/History_of_Google
