watchmojo.com
Welcome to watchmojo.com. I am your host Ashkin and in today’s business school bid, we take a look at another successful company. Now, if you landed on watchmojo.com via a search engine, there is a very strong likelihood that that search engine was none other than Google. You see, Google commands nearly a 50% market share in the very lucrative search industry.
Now, Google began in 1996 as a research study by two very promising and smart PhD applicants out of Stanford University. Sergey Brin, born in Moscow who moved for the States at an early age as well as Larry Page from Michigan who continued his PhD studies in Stanford. Now, incidentally the first time the two gentlemen met, they did not get along and they did not even like each other way too much but that is the way usually that two strong minded individuals essentially hit it off.
Now, once they began talking and they started the research paper, they became convinced that for a given topic that the website with the most incoming links from all over the web, that underlying search result would probably be the most interesting and the most relevant search result for a given term. So, using this as the foundation of their research paper which started in 1996, they began to apply it in the world of search. Now, you must know that around that time most of the search leaders such as Lycos and Yahoo and AltaVista had begun to give up on the search model because they believe that it would be more lucrative to offer everything from email to weather to stock worlds and not focus on search.
Recognizing this opportunity and recognizing that their method to the madness would probably yield better, more relevant results, Google decided to basically launch the google.com website in 1997. By 1998, the company incorporated and they secured C Financing from one of Sun Microsystems original investors. Soon thereafter, two of the biggest venture capital firms in the world, Sequoia and Kleiner Perkins Caufield and Byers decided to each invest $12.5 million and each have one board member seats on their board; the rest to some extent is history.
Google went on to become one of the most highly visited website in the world and the most successful search engine ever. Now, it should be noted that up to the year 2000, Google generated no revenue whatsoever. The reason for that was that Google was more interested in developing the best search out there and not necessarily looking at ways of monetizing their traffic. But as the NASDAQ crashed in the year 2000, more investors began to look at ways to monetize traffic. What Google did was not start selling banner ads but borrow page from Go2.
Go2 was essentially a search engine with no destination site. Very few people would go to Go2.com. But what Go2 was very successful at was develop the pay-per-click essentially the CPC, the calls-per-click model, which meant that an advertiser would advertise alongside the search result. So, if you search for carpenter, you might get at search result on the history of carpenting but you will also get ads from carpenters looking for your business. Go2 pioneered this model; nobody questions that. And this was chronicled master for—to search. But what Google did is that because they had so much more traffic, they borrowed from Go2 and they essentially scaled that. Within a couple of years, Google became the biggest search engine out there and once, Yahoo decided, for whatever reason, to actually use Google as its default search engine then Google went on to become not just the biggest search engine but far and away, the most successful one as well.
Today, Google is a company that employs over 5,000 people specifically about 7,000 and Google is a company with a market capitalization of about $120 billion. To put that into context, Microsoft today is worth about $200 billion. Yahoo is worth about $40 billion. Even Amazon is worth $15 billion. Yet, in eight years, Google has managed to become the most successful internet company. And the bottom line is quality matters and when it came to search, Google ha
Transcription by:
Scribe4you Transcription Services