Friday, July 25, 2008

Google

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Google, Inc.
Type Public
(NASDAQ: GOOG)
(LSE: GGEA)
Founded Menlo Park, California (September 7, 1998)[1]
Founder Sergey Brin
Larry Page
Headquarters Flag of the United States Googleplex, Mountain View, California, US
Area served Worldwide
Key people Dr. Eric E. Schmidt
(Chairman) & (CEO)
Sergey Brin
(Technology President)
Larry Page
(Products President)
Industry Internet, Computer software
Products See list of Google products
Market cap US$ 179.07 Billion (2008)
Revenue 55.97% US$ 16.593 Billion (2007)[2]
Operating income 30.64% US$ 5.084 Billion (2007)[2]
Net income 25.33% US$ 4.203 Billion (2007)[2]
Total assets US$ 25.335 Billion (2007)[2]
Total equity US$ 22.689 Billion (2007)[2]
Employees 19,604 (June 30, 2008)[3]
Website Google.com

Google Inc. (NASDAQ: GOOG and LSE: GGEA) is an American public corporation, earning revenue from advertising related to its Internet search, web-based e-mail, online mapping, office productivity, social networking, and video sharing services as well as selling advertising-free versions of the same technologies. Google's headquarters, the Googleplex, is located in Mountain View, California. As of June 30, 2008 the company has 19,604 full-time employees.[3] As of October 31, 2007, it is the largest American company (by market capitalization) that is not part of the Dow Jones Industrial Average.[4]

Google was co-founded by Larry Page and Sergey Brin while they were students at Stanford University and the company was first incorporated as a privately held company on September 7, 1998. Google's initial public offering took place on August 19, 2004, raising US$1.67 billion, making it worth US$23 billion. Google has continued its growth through a series of new product developments, acquisitions, and partnerships. Environmentalism, philanthropy, and positive employee relations have been important tenets during Google's growth, the latter resulting in being identified multiple times as Fortune Magazine's #1 Best Place to Work.[5] The company's unofficial slogan is "Don't be evil", although criticism of Google include concerns regarding the privacy of personal information, copyright, censorship, and discontinuation of services.

Contents

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History

Google in 1998
Google in 1998
Main article: History of Google

Google began in January 1996, as a research project by Larry Page, who was soon joined by Sergey Brin, two Ph.D. students at Stanford University in California.[6] They hypothesized that a search engine that analyzed the relationships between websites would produce better ranking of results than existing techniques, which ranked results according to the number of times the search term appeared on a page.[7] Their search engine was originally nicknamed "BackRub" because the system checked backlinks to estimate a site's importance.[8] A small search engine called Rankdex was already exploring a similar strategy.[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. Originally, the search engine used the Stanford University website with the domain google.stanford.edu. The domain google.com was registered on September 15, 1997,[10] and the company was incorporated as Google Inc. on September 7, 1998 at a friend's garage in Menlo Park, California. The total initial investment raised for the new company amounted to almost US$1.1 million, including a US$100,000 check by Andy Bechtolsheim, one of the founders of Sun Microsystems.[11]

The main Google page as of June 2008
The main Google page as of June 2008

In March 1999, the company moved into offices in Palo Alto, home to several other noted Silicon Valley technology startups.[12] 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.[13] The company has remained at this location ever since, and the complex has since come to be known as the Googleplex (a play on the word googolplex). In 2006, Google bought the property from SGI for US$319 million.[14]

The Google search engine attracted a loyal following among the growing number of Internet users, who liked its simple design and usability.[15] In 2000, Google began selling advertisements associated with search keywords.[6] The ads were text-based to maintain an uncluttered page design and to maximize page loading speed.[6] Keywords were sold based on a combination of price bid and clickthroughs, with bidding starting at US$.05 per click.[6] 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).[16][17][18] While many of its dot-com rivals failed in the new Internet marketplace, Google quietly rose in stature while generating revenue.[6]

The name "Google" originated from a common misspelling of the word "googol",[19][20] which refers to 10100, the number represented by a 1 followed by one hundred zeros. Having found its way increasingly into everyday language, the verb "google", was added to the Merriam Webster Collegiate Dictionary and the Oxford English Dictionary in 2006, meaning "to use the Google search engine to obtain information on the Internet."[21][22]

A patent describing part of Google's ranking mechanism (PageRank) was granted on September 4, 2001.[23] The patent was officially assigned to Stanford University and lists Lawrence Page as the inventor.

Financing and initial public offering

The first funding for Google as a company was secured in 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] Around six months later, a much larger round of funding was announced, with the major investors being rival venture capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital.[24]

Google's IPO took place on August 19, 2004. 19,605,052 shares were offered at a price of US$85 per share.[25][26] Of that, 14,142,135 (another mathematical reference as √2 ≈ 1.4142135) were floated by Google, and the remaining 5,462,917 were offered by existing stockholders. The sale of US$1.67 billion gave Google a market capitalization of more than US$23 billion.[27] The vast majority of Google's 271 million shares remained under Google's control. Many of Google's employees became instant paper millionaires. Yahoo!, a competitor of Google, also benefited from the IPO because it owned 8.4 million shares of Google as of August 9, 2004, ten days before the IPO.[28]

Google's stock performance after its first IPO launch has gone well, with shares hitting US$700 for the first time on October 31, 2007,[29] due to strong sales and earnings in the advertising market, as well as the release of new features such as the desktop search function and its iGoogle personalized home page.[30] The surge in stock price is fueled primarily by individual investors, as opposed to large institutional investors and mutual funds.[30]

The company is listed on the NASDAQ stock exchange under the ticker symbol GOOG and under the London Stock Exchange under the ticker symbol GGEA.

Growth

While the company's primary business interest is in the web content arena, Google has begun experimenting with other markets, such as radio and print publications. On January 17, 2006, Google announced that its purchase of a radio advertising company "dMarc", which provides an automated system that allows companies to advertise on the radio.[31] This will allow Google to combine two niche advertising media—the Internet and radio—with Google's ability to laser-focus on the tastes of consumers. Google has also begun an experiment in selling advertisements from its advertisers in offline newspapers and magazines, with select advertisements in the Chicago Sun-Times.[32] They have been filling unsold space in the newspaper that would have normally been used for in-house advertisements.

Google was added to the S&P 500 index on March 30, 2006. It replaced Burlington Resources, a major oil producer based in Houston which was acquired by ConocoPhillips.[citation needed]

Acquisitions

See also: List of Google acquisitions

Since 2001, Google has acquired several small start-up companies, often consisting of innovative teams and products.[citation needed] One of the earlier companies that Google bought was Pyra Labs. They were the creators of Blogger, a weblog publishing platform, first launched in 1999.[citation needed] This acquisition led to many premium features becoming free. Pyra Labs was originally formed by Evan Williams, yet he left Google in 2004.[citation needed] In early 2006, Google acquired Upstartle, a company responsible for the online word processor, Writely. The technology in this product was used by Google to eventually create Google Docs & Spreadsheets.[citation needed]

In 2004, Google acquired a company called Keyhole, Inc., which developed a product called Earth Viewer which was renamed in 2005 to Google Earth.[citation needed]

In February 2006, software company Adaptive Path sold Measure Map, a weblog statistics application, to Google. Registration to the service has since been temporarily disabled. The last update regarding the future of Measure Map was made on April 6, 2006 and outlined many of the service's known issues.[33]

In late 2006, Google bought online video site YouTube for US$1.65 billion in stock.[34] Shortly after, on October 31, 2006, Google announced that it had also acquired JotSpot, a developer of wiki technology for collaborative Web sites.[35]

On April 13, 2007, Google reached an agreement to acquire DoubleClick. Google agreed to buy the company for US$3.1 billion.[36]

On July 9, 2007, Google announced that it had signed a definitive agreement to acquire enterprise messaging security and compliance company Postini.[37]

Partnerships

In 2005, Google entered into partnerships with other companies and government agencies to improve production and services. Google announced a partnership with NASA Ames Research Center to build up 1,000,000 square feet (93,000 m²) of offices and work on research projects involving large-scale data management, nanotechnology, distributed computing, and the entrepreneurial space industry.[38] Google also entered into a partnership with Sun Microsystems in October to help share and distribute each other's technologies.[39] The company entered into a partnership with Time Warner's AOL,[40] to enhance each other's video search services.

The same year, the company became a major financial investor of the new .mobi top-level domain for mobile devices, in conjunction with several other companies, including Microsoft, Nokia, and Ericsson among others.[41] In September 2007, Google launched, "Adsense for Mobile", a service for its publishing