Twenty Years In, the Democratized Knowledge Google Championed Looks Like a Failure | QDaily Business History

Google once set itself a goal higher than "success."

On September 4, 1998, two Stanford graduate students, Larry Page and Sergey Brin, incorporated Google because nobody would buy the internet search engine they had built.

Twenty years later, that invention has changed how people get information. The company owns the world's most-used search engine, the operating system on the most phones, the video site with the most uploads, a digital map of the entire planet, and quite possibly the smartest artificial intelligence anyone has built so far.

Page and Brin are both still under 50, and together they are worth more than $110 billion. Google's market value is over $820 billion, its annual net profit close to $20 billion.

Change the world and get infinitely rich doing it: this founding story drove two decades of internet startups that came after.

But at the start Google set itself a goal higher than "success." It wanted to be an "unconventional" company.

Because it refused to be ordinary, Google's 23rd employee and the creator of Gmail, Paul Buchheit, wrote the now-famous line "Don't Be Evil" on a company whiteboard. Page and Brin warned Wall Street in their letter to shareholders: "Google is not a conventional company. We do not intend to become one."

"Don't Be Evil," as an employee code, pushed Google to build the cleanest ad interface, the most accurate search system, the most useful maps and email. It is also why, in 2010, the company walked away from the world's second-largest internet market.

Today people believe in the wealth, the growth, and the sense of world-changing achievement that Google stands for. But in the early 2000s, when Google was starting out in a world just past the dot-com bust and 9/11, people loved Google rather than the bigger, richer Microsoft mostly because it was "unconventional."

What drove Paul Buchheit to the whiteboard was his feeling that Google, having moved out of the garage, was starting to look "like a big company — like Intel or IBM": debating how to expand, how to make money, how to open up an advertising business. To a big company, all of that is perfectly normal.

Eric Schmidt, then Google's CEO, walked in and saw the three words, but nobody could tell what he made of them. A few days later, at a meeting on the advertising business, an employee jumped up halfway through, slammed his fist on the table and shouted: "THAT'S EVIL!"

Recalling that day, Schmidt said, "Everyone was stunned."

Google's advertising business launched soon after. No animated banners of the kind hanging on every portal site at the time, no pop-ups; the ads sat in a neat column down one side of the page, like a memo. Nothing else in search looked like it.

The engineers who built the search engine later sent cars down roads all over the world to make Google Maps, a free and open digital map. To build a book index, they scanned 130 million volumes page by page.

The world found Google's daily "unconventional" habits as fascinating as these vast digital projects.

Google's engineers turned even the company logo into an art project, the Google Doodle, remaking it on every important date to mark a person, a thing, an event. When the internet cuts out, users can steer a pixelated dinosaur through an endless game in the browser. Even the casing Google built in 1998 for its array of server disks was put together by Page and Brin out of Lego.

To convince colleagues that Google Translate could be built on volunteers, the tongue-tied Page once took off his shoe in a meeting and pounded the table with it, the way Khrushchev did, to show how strongly he felt.

The whole company gave off a boyish enthusiasm, which was exactly the spirit the world wanted then. At the turn of the century the tech industry did not have the standing it has now. Big traditional media groups held the copyrights, internet companies filled users' screens with junk ads to turn a profit, and Microsoft, once the face of innovation, had become a monopolist that bullied the weak and was tangled up in a Justice Department investigation.

Against that background, a Google that insisted on being free and on not doing evil became a Silicon Valley idol, and soon the mainstream world's hope as well. In 2003, the veteran New York Times technology commentator Thomas L. Friedman made no attempt to hide his sympathies in an op-ed titled Is Google God?

Twenty years on, the enthusiasm has drained away. "Unconventional" has been replaced by "conventional," and even the line "Don't Be Evil" has disappeared from Google's employee code of conduct.

Not that keeping those three words would have convinced many outsiders. Google forces Android handset makers to preinstall its internet services in a bundle, which is not far off what Microsoft did back when Google was challenging it — and this year the EU fined the company, which has always advertised its "high moral standards," 5 billion euros for exactly that.

Some of the business Google once kept at arm's length has also been pulled back onto the table: helping the Pentagon put artificial intelligence into weapons that kill people, or reviving a China search project inside the company. Executives know perfectly well how far both depart from what Google used to stand for. What worries them most now is not whether it is evil, but whether the outside world finds out.

Discussing the Pentagon deal in internal email, Google's then chief AI scientist, Fei-Fei Li, warned colleagues to keep it strictly confidential: "Avoid at ALL COSTS any mention or implication of AI. Weaponized AI is probably one of the most sensitized topics of AI." The China project was buried under more layers of secrecy still.

After American media exposed both projects, both set off internal protest and leaks. An open letter signed by thousands of employees went straight at the CEO's decision, and dozens of people resigned over what the company was doing. Many of its employees have not gotten used to Google becoming conventional — accepting the rules every other big company in the world already accepts.

The change has been under way for a while, and the old standoff between Google and Wall Street is gone. Page, Brin and a few company veterans still hold control, but the CEO running Google day to day, Sundar Pichai, came out of McKinsey, and the CFO who runs its money, Ruth Porat, is a Wall Street veteran through and through. Today's Google no longer hides how much it is spending on new businesses, and it buys back enormous amounts of stock to reward investors. Both practices started after Porat joined in 2015.

"Unconventional" — expecting a public company to live outside the old rules that govern the rest of the world — may have been too idealistic to begin with, even if Page and Brin made people believe for a while that they might pull it off.

In the end every successful startup story arrives at the same place. The idealistic founders drift away from the business, and the company passes to people who are better and better with money. To hit revenue and profit, and to keep investors happy, it gradually accepts the customary rules and takes on the business it once refused on moral grounds.

The world took a full twenty years to make Google, and to make it stop resisting and start accepting the old rules.

Search engines are still indispensable technology, but they are no longer the first thing people touch on the internet each day. On the day Google turned 20, Amazon, the world's largest e-commerce company, became the second listed company after Apple to pass a $1 trillion market value — though five years earlier Google had been worth twice as much as Amazon.

In 2014, Page, then still Google's CEO, said the company's original mission — "to organize the world's information and make it universally accessible and useful" — had been accomplished. In fact information on the internet keeps getting less organized. New material posted inside social networks is invisible to search engines, in China and everywhere else.

The habit of having a question and searching for the answer is being replaced by video and social apps that spoon information straight into people's mouths. What each person sees is decided more and more by algorithms rather than by their own curiosity. The internet has gone from a utopia where everyone was a creator to a giant television of the new era where everyone is a consumer.

In the end it was larger forces that stopped Google's plan to remake the world — and those same forces changed Google itself.

The internet has become less open, and search is no longer the main gateway to information

In 2010, Chris Anderson, editor-in-chief of Wired, sketched this scene in an article called The Web Is Dead. Long Live the Internet.

You wake up and check your email on your bedside iPad — that's one app. During breakfast you browse Facebook, Twitter, and The New York Times — three more apps. On the way to the office, you listen to a podcast on your smartphone. Another app. At work, you scroll through RSS feeds in a reader and have Skype and IM conversations. More apps. At the end of the day, you come home, make dinner while listening to Pandora, play some games on Xbox Live, and watch a movie on Netflix's streaming service. Another pile of apps.

Looking back, apart from the names of a few services, the argument in that article — which caused fierce debate at the time — still holds.

Mobile is not search's territory. People no longer build websites large and small for search engines to serve up. The sheer profusion of apps has left search engines without the loudest voice, and has split the information ecosystem apart. Even Google, which controls Android, has not been able to reverse it.

The internet has closed up. Power in the digital world has moved from the companies that control search and operating systems to whichever internet giant occupies users' time.

Everyone uses the internet, but most people end up only consuming information

In Google's ideal republic, the first step to understanding the world is asking a question, not receiving information passively. Google's search box, which was everywhere, changed how people got information; searching on Google became a reflex.

The open, interconnected internet gave everyone a chance to produce. Users got information free while trading their own writing, audio, video and pictures out to everyone else online. Even today, in most of the world, there is no real barrier to publishing something on the internet.

But mobile changed how people use it. Instead of typing a question into a search engine, you go straight into an app. The cost of producing content has fallen enormously, yet the change in how people get information has turned most of them into consumers rather than producers.

That shook Google's ideal. For a company that grew out of search and utility software, the last thing it wanted was users going from asking and creating to passively receiving.

You can see it in the contest between YouTube and Netflix. YouTube, built on user-generated content, has belonged to Google for more than a decade and is still struggling below the profit line, while Netflix's market value has reached $151.6 billion, passing Comcast and then Disney to become the most valuable media company in the world.

In China, Baidu and Toutiao are fighting the same fight over the gateway to traffic. The Baidu app has roughly 150 million daily active users; the newcomer Toutiao has about 240 million, and its short-video app Douyin has passed 150 million daily active users at home as well.

Once the internet was everywhere, control of the world went back to the old "giants of flesh and steel"

John Perry Barlow, a co-founder of the Electronic Frontier Foundation (EFF), published A Declaration of the Independence of Cyberspace in 1996. He wanted everyone to be able to speak freely and independently online, out from under government control:

"Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather."

When Barlow wrote that, most people still did not understand the internet, and Google, Amazon and Alibaba did not exist. As the internet reached more and more people and tech companies grew to a size never seen before, governments got better at technology too.

Friction was inevitable. Before pulling out of China in 2010, Google's two founders said in public that they hoped Google could take part in the country's opening up and speed the flow of information. This year's run of events says something else: Google is now ready to let governments reshape it in order to enter a new market, whether the price is putting artificial intelligence into weapons or accepting a country's information censorship.

Once the internet stopped being purely virtual and became part of reality, every conflict in reality was reflected onto it — crime, elections, war, terrorism. This week another round of hearings on the internet's influence on elections opened in Washington, and giants including Google and Facebook were targets again.

Protecting privacy and fighting terrorism and fake news are what more and more governments want, and also the reasons they give when they reach out to tech companies for data.

Control of the world never did land in the hands of the geeks.

No breakthrough in new businesses — the root of Google's eventual compromise

In January 2011, Schmidt handed Page his resignation letter, ending ten years as Google's CEO.

"I knew what needed to be done, but I didn't seize the opportunity. The CEO is supposed to be responsible for the company, and I'm the one who screwed it up," Schmidt said flatly, admitting he had botched social. Around 2010 Google launched three social networks in a row to fight Facebook, and all three failed quickly.

After Schmidt left, the two founders came back. Page became CEO and threw every resource Google had at Google+. After four years of struggle, Google+ was broken up into separate businesses in early 2015 — an admission of failure in all but name. Slightly earlier, Facebook had bought WhatsApp for $19 billion, closing off Google's last route into social. Page was rumored to have worked every angle to get Google to outbid Facebook for WhatsApp, but it never happened.

Meanwhile, Google's "20% free time" existed in name only. In 2013 a report on the business news site Quartz described how it had changed: engineers now needed a manager's approval to work on a 20% project, performance reviews had multiplied, and 20% time did nothing to help an engineer clear his ordinary workload. The old 20% time had become the surplus slice of a 120% week. Google was no longer pushing employees as firmly as it once had to take risks for a big payoff.

In its place came Google X, the lab Brin oversaw directly. Google X aimed at technology that could be put to use within about a decade, and it produced Google Loon, the balloon-borne internet project, self-driving cars, and a rebuilt Google Glass.

The most important of them was Google Glass, the smart glasses cast as the next great invention after the smartphone. Google had hoped smart hardware would win it back a voice in the new era. Brin pushed the glasses hard himself — he skydived into a product launch wearing Google Glass, and told a TED audience from the round carpet on stage that looking down at a phone made him feel "emasculated."

The project later became one of the symbols of Silicon Valley's own excess, and in 2015 it was quietly wound down.

In 2015, the social project and the hardware project each founder had run personally both ended in failure. Google's parent company, Alphabet, was created soon after; daily operations went to the new CEO, Sundar Pichai, and Page and Brin faded out of day-to-day management.

At the same time Porat, newly arrived as CFO, began cutting spending on anything that did not return money, and cutting it on a large scale. Wall Street's analysts were broadly delighted. "Google got the right person," one senior Wall Street analyst told the Wall Street Journal. When word of the cuts got out, Google's share price rose on it.

Google today is still very profitable and still growing fast. Android and YouTube secure its growth in the mobile era. Short of the end of the world, it is hard to picture much going seriously wrong with the business.

But pushed by all these forces, it has also begun to accept the rules of the game that most companies accept. The Google that once made a point of being different has become the "conventional" company its younger self resisted.

Charts/Feng Xiuxia

Cover image/Visualhunt