From the April 2002 issue of Entrepreneur

Depending on how hip to the Web you are, you may or may not have heard of Google. You've likely heard catch phrases like "odd Google," which is commonly used in Web logs and online diaries when visitor stats reveal a person reached a site by typing a laughable combination of words into the search engine. Or perhaps when utilizing Yahoo! to search the Web, you ended up with results "powered by Google."

Whichever way you look at it, the masses are catching on to the buzz, and an increasing number of users--from the 100-plus Internet companies that pay Google Inc. for its search services to journalists scouring the Net for extremely specific information--are looking to the Mountain View, California, search engine company for the best results. The exact formula for attaining the best results is a well-guarded secret, but the reasons why Google has not only stayed afloat amid the dotcom dive and current recession, but avoided layoffs to boot are quite obvious.

"Never heard of it!" laughs Ray Sidney, a 32-year-old software engineer who's been employed by Google Inc. for three years in regard to that fateful spring of 2000 when so many Internet companies shut their doors. He believes Google's success in avoiding tragedy is an amalgam comprising an "incredible love of Google out there" and the fact that the company has actually entered the black.

If you ask co-founder and president Sergey Brin about the stunning success of the company he and Larry Page founded in 1998, he'll tell you it's the concept itself. Search is the No. 1-used application on the Web, second only to e-mail in all online activities. Last July, Jupiter Media Metrix reported Google ranked first among "free-standing" search engines like AltaVista, Ask Jeeves and GoTo, and ranks 15th in usage among all Web sites.

"If you look at the history of these companies, all the search engines decided they wanted to be Yahoo! around '96 and '97," says Brin, 28. "They were going to be portals and decided search was not really that important. Our perception was that search was very important, and the quality of results was important to people. That was a hypothesis that [turned] out to be true," says Brin. It was also the goal that brought Brin and co-founder and president Page, 29, together and prompted Internet big guns to back Google when it was still operating out of Brin and Page's Stanford dorm rooms.

Disk Array

At first, Google started as a collaborative graduate-level research project focusing on link analysis in 1996. The long-term goal was to "retrieve relevant information from a massive set of data," not to start a business and become a hot topic in the media and in the technology world.

Deadpan, Brin admits to his and Page's lackadaisical approach to the project. "We were quite lazy about it," he says. "Stanford was pretty comfy. Being a graduate student there, you didn't really get paid well, but you got to spend time with a lot of interesting people. It's a pretty nice place to be, so we weren't really that motivated to run off and start a company."

But after a short time, they were having a lot of success retrieving information and realized the importance of what they were working on. "It got to the point where the easier way to provide it to the world was to start a company," says Brin. They were no-frills when it came to equipment: Page's dorm room was their data center and Brin's was the office until they upgraded to a garage. Money, however, wasn't hard to come by.

Their privately owned company has received funding from the likes of Kleiner Perkins Caufield & Byers and Sequoia Capital. In fact, money has flowed since the very beginning. After Brin and Page decided to start the company, they put forth about $20,000 of their own capital to buy disks and computers. "We would've been happy to self-fund [the company], but it just happened to be easier to get a little investment, so we went to people we were close to," says Brin.

Google's initial angel investors included Ram Shriram, then-president of Junglee, which was eventually purchased by Amazon.com; professors from Stanford University; and Andy Bechtolsheim, co-founder of Sun Microsystems, who tried a few queries using Google on a Palo Alto porch one morning and was impressed enough to write a $100,000 check on the spot. The reason Google incorporated when it did was because that check was made out to one Google Inc.

With the myriad of tell-all biographies detailing Internet mavens' rise to glory and movies depicting many a dotcommer's fall from grace, you'd think Google's ride would be a similar whirlwind. Not the case. "I feel bad about even being associated with those kinds of people," says Brin about cutthroat go-getters featured in documentaries like Startup.com. "I think there are a lot of ethical issues there. That company started with, 'There's an Internet boom--why don't we capitalize on it?' In Google's case, we were really interested in developing our search technology. It wasn't a get-rich-quick thing, and it still isn't. We're trying to build better and better products and a stronger and stronger company, but you don't see us running around trying to make a buck by IPO-ing or selling the company."

The Long Haul

According to Danny Sullivan, founder and editor of SearchEngineWatch.com, published by INT Media Group Inc. in Darien, Connecticut, Google's success will ultimately come down to how well its relevancy technology can compete with that of newcomers like Teoma.com. Success will also depend on the company's ability to maintain its sparkling reputation.

Right now, it seems that everyone is singing Google's praises, from diehard Linux enthusiasts to advertisers like Eddie Bauer and Acura. The companies embrace Google's highly targeted advertising programs because its text-only format produces a much higher click-through rate than banner ads and are targeted based on users' searches. What became popular among Stanford students and a largely techie audience has snowballed, as Sullivan puts it, into a slew of fans from every walk of Internet life.

Noting there will be some worthy technological competition to come from the likes of Teoma, whose relevancy technology rivals that of Google, Sullivan says that a waning reputation can often hurt a company. "People always want to know what the hottest thing is, and what they don't want to know is that the hottest thing is the same it was yesterday," he says. In Sullivan's opinion, the company's dedication to Internet search is what makes it stand out from the rest. Says Sullivan: "Google has been good in rolling out new features. Even if the press doesn't want to keep writing about Google, it's not necessarily writing about Google when it writes about the Google Image Search engine.

"I don't think they [do it] just because they know they need to keep press attention. I think they come up with it because they care about search. That's what's going to carry them through more than anything else."

It's hard to argue with that. With everything from Google's PageRank system, which ranks an individual page's value, to availability on WAP-ready phones and Palm Pilots, it's obvious Brin and Page care about what they're doing. "We have a long-term goal of creating the ultimate search engine--one that would understand exactly what users mean and give back exactly what users want," says Page.

In the meantime, they work toward their goal in a pleasant, kick-back work environment. Google's Mountain View headquarters houses an arcade machine with games built by a Google engineer, a piano in the lobby, lava lamps, a gym with locker rooms, and PlayStation 2 and Dreamcast diversions. And to top it off, there are three full-time chefs who cook lunch and dinner. A sample menu includes creamy tomato basil soup with grilled free range chicken followed by a pumpkin cheesecake with walnut crust for dessert.

Sound like the glory days that sent most dotcoms into a downward spiral? "These things aren't that expensive, and they make me happy, which is important," jokes Brin. More seriously, though, he says,"We try to provide an environment where people are going to be happy. I think that's a much better use of money than, say, hundred-million-dollar marketing campaigns or outrageously inflated salaries."

Apart from the opportunities, it was the air of good times that made Ray Sidney join the team back when there were only four people at the company. Sidney admits the intimate feel has changed a bit now that the company has 270-plus employees. Certain protocols are now more necessary than they once were, and the company's structure is more defined. But it sure makes for a more exciting hockey game in the parking lot.

Despite its rapid growth, Google is still a place where CEO Eric Schmidt always leaves his door open, and where the co-founders hit the puck alongside engineers. Because its good name has prompted major portals like Yahoo! and international corporate sites like MarthaStewart.com and Cisco Systems to choose Google services. And because targeted advertising pulls in Google revenue, the company has never had to cut back on hiring. In fact, it's hiring "the best"--be it university faculty for the research division to engineers with doctrates in computer science--that has helped Google advance so quickly. Says Brin, "We look for diversity and talent--both implementation talent, idea talent and more science vs. engineering talent."

Somehow you can just look at the Google logo and know it's run by passionate and fun-loving folk, and that the heart of the company is true. It's the way Sergey Brin and Larry Page decided things were going to be from the beginning. "There are situations now as an executive-hiring people, firing people, ethical quandaries and things you run into where you have to define yourself as a person," says Brin. "I found it's important to set a high standard early and follow it, which we did. That's how you develop trust with your colleagues and companies you work with--and that's how you maintain a really good reputation."