In The Plex

by Steve Levy

  “We want to be the good guys,” said Craig Walker. “Telecom companies are notorious for hidden fees and long-term contracts with penalties—fine print everywhere. We’re not going to screw you. We want to have a bunch of happy users. We want you to enjoy being on the Google properties and loving Google for it.”

  Predictably, one company that did not embrace Google Voice was Apple. In addition to implementing Voice as an Android application, Google submitted it for consideration as an iPhone app—and was denied. Reporters and industry analysts speculated that Apple had slammed the door at the request of its exclusive network carrier, AT&T. The FCC demanded an explanation, and on July 31, 2009, Apple haughtily explained that it had not rejected Google Voice but was continuing to study it, to make sure it did not negatively affect “the iPhone experience.”

  Ironically, this conflict played out as another government agency, the Department of Justice, was examining whether Apple and Google were too closely tied, specifically questioning Schmidt’s presence on Apple’s board. But by then the relationship between the two companies had deteriorated so much that even Bill Campbell could not mitigate the tension. In August 2009, Schmidt left the Apple board, explaining that the departure was motivated not by government pressure but by the fact that the competition between the two firms, particularly in phones, made it too difficult for him to continue. In addition, Art Levinson left Google’s board. (Al Gore remained on Apple’s board while retaining his advisory role at Google. “It hasn’t been uncomfortable,” says Gore on negotiating potential conflicts. “All that’s required is common sense, really.”)

  Now that Schmidt was off the board, hostilities became more overt. The iPhone was still the royalty of smart phones. But as Android became the fastest-growing smart-phone operating system—by mid-2010, Google partners were selling 200,000 a day—Jobs increased the pressure. He sued the handset manufacturer HTC, alleging that its Android phones used techniques patented by Apple. Within days, Google rolled out a change in Android’s operating system: it would now support the pinch and stretch multitouch gestures that Jobs had demanded that Google remove. The capability had been hibernating inside the code base, and all Google had to do was switch it on in the next upgrade.

  Schmidt maintained that those developments were part of the normal course of competition. “I admire Apple,” says Schmidt. “It’s a very well run company. Steve is the best CEO, the most clever leader, that maybe we’ll ever see. I was honored to be a part of it.”

  But Jobs felt compelled to reveal his impression that Google itself was a fraud—that beneath the warm and fuzzy exterior was a company that could not be trusted. What’s more, he felt personally abused by what he considered its misbehavior, and numerous sessions with Brin or Page in which he pressed his case had given him no satisfaction. He expressed his feelings in a semipublic performance in January 2010, at an employee question-and-answer session in the Town Hall Auditorium on Apple’s campus. Ostensibly the event was a victory lap to celebrate the iPad, announced just two days previous. Jobs took the opportunity to send a message to the people at Mountain View, just a few miles north of Cupertino. All it took was one open-ended question about Android to unleash a fusillade of anti-Google invective. “Apple didn’t enter the search business,” he said, “so why did Google get into the phone business?” That wasn’t all. “Google wants to kill the iPhone,” he said. “We won’t let them.” Even as the next question came on a different topic, Jobs felt he hadn’t sufficiently vented. He reminded his minions of Google’s “Don’t be evil” mantra. Then he shared his thoughts on the motto that Google used to define itself.

  “It’s bullshit,” he said.

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  “We saw YouTube building an edgy fun brand, in a way that Google Video wasn’t.”

  Google’s Android plans were only part of an energetic expansion into every corner of the digital world. There seemed to be no limit to the categories that Google would deem relevant to its mission. At a November 2009 tech conference called Web 2.0 Summit, an interviewer ticked off some of the staggering bounty of Google products and initiatives to Brin (who had decided only earlier that day to appear on the stage and was of course immediately accommodated). “Can you succeed in every one of these, or is your strategy to bat .350?” he asked. Brin frowned. “I’m not familiar with baseball,” he said.

  “That’s very good,” said the interviewer. “Three-fifty is very good.”

  “Like 35 percent?” Sergey asked with a trace of mockery in his voice. “Out of what? Out of a thousand? I think we can do better than that.”

  (Brin’s lack of baseball knowledge was typical; his ignorance of popular culture was legendary. Once he asked a colleague if he had ever heard of a musician named Carlos San-tain-a; Brin had been asked to introduce him at a concert. “Sergey,” the Googler said, “everyone knows who Carlos Santana is.” “I’ll just say he needs no introduction,” said Brin.)

  Brin and other Google executives were sensitive to the charge that the company was a “one-trick pony,” unable to come up with anything that even closely matched the success of its core combination of search and ads. Google contended that there was a holistic aspect to its activities: the companies it bought, the new areas it colonized, built a bigger Google ecosystem. Google would often point to a putatively unprofitable area and claim data that showed a positive impact on search and subsequent clicks on its ads. Even a tiny increase in the percentage of searches meant many millions of dollars of revenue. Nonetheless, the breadth of its expansion reflected Larry Page’s unfettered ambition. Some of the Google projects the interviewer referred to indicate the breadth of its efforts:

  ▲ Relatively early in its history, Google invented a search-related algorithmic news service called Google News. The idea came from early Google engineer Krishna Bharat, who was stuck in a New Orleans hotel room when planes were grounded right after the September 11, 2001, terror attacks, and was frustrated in his web searches for fresh information. “I really wanted one place where all the reporting on one issue was collected, so I started thinking about one way to do this, to extract the content of the articles and cluster it,” he later said. He used his 20 percent discretionary time to create a news search engine. Using the tools of search, he was able to identify news sources and algorithmically determine their quality. (For instance, a site that used the full names of news subjects—for example, “Hillary Rodham Clinton”—was probably more reputable than one that used only a first name.) Other algorithms enabled him to cluster stories by subject. Bharat believed that an engineering approach to the news would provide an alternative to skewed coverage. “If you had a human editor providing that mix, it’s going to be difficult to explain to people why that is unbiased. With an algorithm, that argument becomes much easier, because the algorithm has no personal interest in either the Israelis or the Palestinians. And it’s measurably so.” Even though Google took years to put any ads into the product (they would appear when people used a keyword to search for news), Google News instantly became the bête noire of the troubled news industry. To little effect, the company would note that newspapers’ problem was the Internet itself and services such as craigslist, which offered classified ads for free, not a search engine that provided links to news sites.

  ▲ In 2004, Google bought Picasa, a Santa Monica company that stored users’ photos online. Though not as popular as the leading cloud-based photo-sharing site Flickr (a start-up bought by Yahoo), Picasa steadily gained customers, in part because of increasingly seamless integration with Google’s other applications. Google also used its billions of images as data fodder for its learning machine. And unlike Flickr, Google did not charge monthly fees for a “pro” version.

  ▲ Also in 2004, Google purchased a web service that stitched together high-resolution satellite images of the earth’s surface as if they were a huge virtual environment in a video game. Keyhole had been the brainstorm of John Hanke, whose résumé included a stint at “foreign affairs�
� for an unnamed branch of the U.S. government; his company was partially financed by the CIA’s venture capital unit. Keyhole combined the techniques of video games and satellite photography to give its subscribers powerful geographical observations that previously had been limited to military leaders in situation rooms. When Sergey saw it, he went bonkers. Googlers recall meetings when a product under discussion or a PowerPoint deck was shunted to one side while Sergey projected a Keyhole screen on the other side, swooping from the sky to peek on this location or that. He totally disrupted one meeting by zeroing in like a smart bomb on the lavish homes of every executive in the room. “We thought it was too fundamental to let somebody else control it,” says Eric Schmidt. So Google bought it, changed the business model from a $1,000-a-year subscription to free, and integrated it into its Google Maps application—and into its mirror world. By 2009, 300 million people routinely peered down on the earth from space via Google Earth.

  ▲ Google launched its Knol project in 2008, when the head of search engineering, Udi Manber, an aficionado of New Yorker–style cartoons, found unsatisfactory results for a query on that magazine’s wry artist Peter Arno. He began thinking of a project that would encourage people with expertise on a subject to create online encyclopedia-style articles on their specialties or just things they knew a lot about. (That would contrast with the hugely popular crowd-sourced Wikipedia items, which garnered reliably high rankings in Google searches.) Manber had a team set up protocols for creating “knols” on items—which could be financed by AdSense. (The term derived from “knowledge.”) He recruited his MD wife to write a prototype knol on insomnia and got Google to pay handsome sums to the country’s best medical specialists for seeding the service with succinct descriptions of their specialties. But Knol never took off, and Wikipedia remains the web encyclopedia of choice. Manber never did write his knol about Peter Arno.

  (As an example of Google’s Darwinian product development process, even a minor project like Knol had a direct competitor within the company: a team in Google’s Zurich office was working on a similar project called Wooki. But the Zurich engineers had no formal way to determine whether their project was viable. On a trip to Mountain View, the project lead, Gabor Cselle, went on a corporate quest to seek an answer. He grabbed Sergey Brin after a TGIF, who sent Cselle to Larry Page’s office in Building 43. Cselle found Page there, sitting in front of a Windows netbook that provided the only illumination in the room. The intimidated—“scared shitless” was the term he’d later use—engineer asked Page if he’d heard about Wooki. Page hadn’t. Cselle quickly came to understand that his project was doomed. But the two men spoke for half an hour. At one point Cselle asked Page if he had problems with Wikipedia. “Yes,” said Page. “I have problems finding really good information about nuclear fusion.” That’s when Cselle had his insight about Larry Page. What Larry asks himself in situations like this is not How can I help this person? Instead, he’s asking himself, Ten years from now, what thing can we build at scale that’s going to have the maximum impact on humanity?)

  ▲ Google routinely snapped up a number of back-office technology companies. One of the biggest deals was its $625 million purchase of an email spam-fighting company called Postini in 2007.

  ▲ Google saw itself as part of the energy business. Though the massive amounts of energy consumed by its data centers seemed a good reason to pursue that course, Brin and Page were also motivated by a fuzzy sense of eco-activism. When Google set up its nonprofit foundation Google.org, it announced that one of its goals was to make investments and inventions to make renewable energy cheaper than coal. In 2009 Google secured a federal license to engage in the electrical power transactions that were limited only to energy companies.

  Those were only the highlights of a dense constellation of acquired and homegrown products and projects. They came with such frequency that reporters couldn’t keep up with them. Not a week went by without a few launches of some new Google project that rendered a traditional business obsolete or mowed down some digital enterprise that had pinned its existence on charging for its products. For instance, in one unexceptional week in November 2009, Google announced that it had acquired volumes of information on court rulings and would offer a free alternative to expensive legal research services such as Westlaw; and a blog item unveiling a computer language written by the industry legends Rob Pike and Turing Award recipient Ken Thompson.

  Even Googlers couldn’t keep track. During that week Google’s PR person in charge of search was driving to the Googleplex from his San Francisco home when his BlackBerry lit up with queries from reporters concerning a new proprietary dictionary service, dealing harsh blows to other online services offering similar functions. He’d never heard of it. As soon as he blew into the office, he began frantically emailing people on the search team for information on the product.

  To Brin and Page, the distractions, the confusion, the cost, and the disruptions were all secondary to what they saw as Google’s key criterion: benefit to the end user. Time and again, when asked if the company was overstepping or gaining too many enemies, they would say that their yardstick was not revenues, advertisers, or even their own employees. “We started this company to bring this technology to the user,” Brin said when asked about the issue at a Google event in 2008. “I don’t feel comfortable denying it to users.” Schmidt concurred: “To hold back because we’re worried is not a good way to run a business.” Another statement Schmidt made illustrated the distance that the once careful corporate planner had traveled since surrendering to the ethos of the founders: “Disorganization is a feature.”

  But none of Google’s postsearch initiatives would be more significant and have a bigger impact on the world at large—and draw a bigger lawsuit—than its movement into online video. The key was a 2006 corporate acquisition, the biggest the company had made to date, of a company whose name would become almost synonymous with the explosion of Internet video, a brand almost as recognizable as Google itself: YouTube.

  Google’s original effort in the world of online television was a dud. Jennifer Feikin was a onetime entertainment lawyer who became a business development executive at AOL and then moved to Google, working under Omid Kordestani. Her initial job involved complicated AdSense deal agreements. Before embarking on yet another one, Feikin got Omid to promise that on completion she could work on a different idea she called Google Video. Her concept was that Google’s search should deliver links to movies, TV shows, and even news clips as well as it did to web pages. In late 2003, she began pulling together a team.

  Feikin believed that in addition to providing links, Google Video should offer users a chance to view professionally produced work in categories such as television news, sports, documentaries, movies, and network television shows. Such programming would be legally licensed and would be available for free for promotional purposes or would be ad-supported or sold. Selling videos would give a boost to the company’s perpetually struggling payment system, Google Checkout, which had never quite gathered the huge number of credit card sign-ups that competitors such as PayPal, Amazon.com, or iTunes had amassed. “It was very important to find a way to monetize content for the entertainment industry,” Feikin says. “Putting stuff on the Internet was very new, and there were lots of clips and promos and stuff like that, but putting the full shows online was a very interesting thing to our partners.”

  Not as crucial to the Google Video approach was the long tail of Internet video. The web, along with new and powerful digital tools for making and distributing videos, offered an opportunity for the most obscure video auteur—meaning anyone with a cheap camera and a modem—to reach an audience of billions. It was a perfect opportunity for Google. But someone else was seizing it.

  In December 2004—just as Feikin and her team were finalizing plans for a January launch of Google Video—Jawed Karim, a twenty-five-year-old engineer at PayPal, began thinking about web video from the bottom up. How, he wondered, could you ma
ke it supereasy for people to upload their homemade videos to a site where anyone could see them? What he had in mind was a video version of the website HOT or NOT, where users looked at people’s photos and made decisions on their desirability. He shared his ideas with two colleagues at PayPal, Steve Chen and Chad Hurley.

  In February 2005, Karim, Chen, and Hurley formed a company called YouTube. (Karim, who wanted to return to academia, soon went back to school and turned over the leadership to his partners.) They set up shop in a second-floor office over a pizzeria in San Mateo, halfway between San Francisco and Palo Alto. They made a few decisions early on that proved brilliant in retrospect. First was a revelation that seemed elusive to Google Video: success in a video site hinged on making it easy for users to actually view the videos. (Google Video didn’t launch a player until that June, and it required a separate download.) “It was important when you come to YouTube that within a few clicks you are watching video,” said Chen. The second decision was to include YouTube in a budding movement described as Web 2.0, where online activities were seen as participation in a self-defined community. YouTube built tools to make its videos viral; by copying and pasting a few lines of HTML code, you could stick a YouTube video into your blog or website, email it to a friend, even post it to a social network such as MySpace.

  In April 2005, the founders began uploading some videos of their own—inane stuff such as Karim rolling down a snowy hill or the antics of Chen’s cat, Stinky—and awaited the deluge. It didn’t happen instantly. In May, the impatient founders took out an ad in craigslist offering “hot” women $100 for every ten videos they’d post displaying their charms. But once the snowball started rolling, it was an avalanche. That summer, someone named Matt Harding began posting videos of himself dancing (spastic, cringe-worthy nerd dancing but so unself-conscious that it was infectiously joyful) in various vacation spots. He became a global celebrity.