Google does its part to address global warming. It places on its roofs the largest installation of solar photovoltaic panels of any corporate campus in the United States, generating sufficient electricity to power one thousand homes. It has solar-powered stations in its outdoor parking lots to charge its fleet of hybrid cars, and offers subsidies (five thousand dollars at first and now three thousand) to any employee who purchases a hybrid that gets at least forty-five miles per gallon (one thousand employees have received this subsidy). The company earmarks 1 percent of its profits to its philanthropic arm, the Google Foundation. CEO Schmidt sometimes lapses into speaking of Google as a “moral force,” as if its purpose were to save the world, not make money.
Al Gore, who has served as a consultant and adviser to Google since soon after he left the White House in 2001, likes to talk of Google’s “great values.” He told me he believes these values are spreading to other companies. Those who attribute Google’s success to its algorithms or “the law of increasing returns,” he said, fail to fully appreciate “the extent to which Google’s superior talent recruitment stems from its unusual empowerment of employees and the attention they pay to the quality of the employee experience at Google.” The best engineering schools produce a few near geniuses each year, and the reason he said Google is “getting more than their fair share of the most talented” is that they target them. “I’ve called college seniors for them,” he said, adding, “It’s not only in the recruiting and retention of the higher-quality employees. It also has to do with their alignment with community values, with trying to make the world a better place. People unlock a higher fraction of their creative potential when they feel that what they’re doing is about more than making a buck, or more than enhancing the business scorecard and building the value of the company. When they think that what they’re doing is something that makes the world a better place, I don’t think that’s just touchy-feely stuff.”
THE REST OF THE world, particularly the media part of it, doesn’t always have a “touchy-feely” view of the company. Google has been sued by Viacom for allegedly allowing YouTube to pirate its television programs, by publishers and the Authors Guild for digitizing their books without permission, and came close to being sued by the Associated Press for linking to its stories without paying compensation. Newspapers and magazines are alarmed that Google News and Google search link to their content and don’t pay for it. Hollywood frets that YouTube enlarges its own audience and diminishes theirs. Advertising companies are alarmed that Google and DoubleClick retain so much information that their advertising clients might turn to Google to purchase their online advertising, and maybe design their ads. Telephone companies are alarmed that Google is pushing into their mobile phone business. All feared Google would devise a navigation system for their media akin to what search was for the Web, and thus would be poised to become the traffic cop for all media.
Schmidt said he, Brin, and Page often ask themselves: “How can you grow big without doing evil?” He believes Google has become a lightning rod, particularly for old media. “In our society bigness is often associated with bad,” he said. “There is no question that a company with the ambitions of Google will generate controversy, will have people upset with us. The question is: Where does it come from? Is it coming from a competitor? Is it coming from a business whose business model is being endangered by the Internet? Or is it because we’re behaving badly?”
Schmidt believes the hostility comes from threatened competitors who scapegoat Google. “When you have a technology that is as engrossing as the Internet, you’re going to have winners and losers,” he said. “I’m not trying to sound arrogant. I’m trying to sound rational about it. The Internet allows people to consume media in a different way. They’re going to do it.” Schmidt acknowledged that, in his own naivete, Google has probably fanned paranoia. “Google is run by three computer scientists,” he said. “We’re going to make all the mistakes computer scientists running a company would make. But one of the mistakes we’re not going to make is the mistake that nonscientists make. We’re going to make mistakes based on facts and data and analysis.”
Schmidt’s summation understates the mistakes Google will make, and has made, because its computer scientists live on their own planet and often harbor disdain for the way others think. Terry Winograd, who was Larry Page’s graduate school mentor at Stanford, and who still serves as an engineering consultant to Google, recounted a discussion at a TGIF he attended where an employee raised the question of one day splitting Google’s stock and asserted that a stock purchased at, say, four hundred dollars a share that was now selling at forty dollars per share because it had been split, would be perceived as not a good thing for employees because the perception would be that their stock was worth less. Page erupted, “It’s stupid. If you own ten shares at forty dollars and one share at four hundred dollars, it’s the same thing! You just need to know how to divide.”
This is “logically true,” said Winograd. “But there is an emotional issue here. He felt that those who disagreed were not thinking logically, were being stupid.”
Logic, however, is not always universal. The planet is occupied by humans, who often make decisions under the guise of a logic that others deem stupid. Great leaders have the empathy to factor this wisdom into their deliberations. They know Robert Louis Stevenson understood a broader truth when he wrote: “No man lives in the external truth among salts and acids, but in the warm, phantomagoric chamber of his brain, with all the painted windows and storied wall.” That Larry Page and Sergey Brin-and many Google employees-are brilliant is a conclusion cemented by the tale of Google’s rise. Whether they are also wise is not as clear-cut.
PART TWO. The Google Story
CHAPTER TWO. Starting in a Garage
In early 1998, Bill Gates couldn’t envision what was to come. Microsoft was at the apex of its power, with revenues that would reach $14.5 billion by year’s end, with ever-rising profits, a soaring stock valuation, more than twenty-seven thousand employees, and a market share of computer operating systems that encompassed more than 90 percent of all desk and laptop PCs. The government had not yet sued it for monopolistic practices, or convinced two federal courts that Bill Gates’s company was guilty. At the time, Microsoft was so flush that it had flirted with investing in Hollywood, having already dispatched its chief technology officer and dealmaker, Nathan P. Myhrvold, to spend an anthropological week with DreamWorks cofounder Jeffrey Katzenberg.
It was in that confident time that I visited Gates in his office on the sprawling Microsoft campus in Redmond, Washington, in 1998. In the course of our interview, I asked him to describe his competitive nightmare: “What challenge do you most fear?” He rocked gently back and forth, sipping from a can of Diet Coke, and silently pondered the question. When he finally spoke he did not recite the usual litany of prominent foes: Netscape, Sun Microsystems, Oracle, Apple. Nor did he cite the federal government. Instead, he said, “I fear someone in a garage who is devising something completely new.” He had no idea where the garage might be-or even what country it might be in-nor could he guess the nature of the new technology. He just knew that innovation was usually the enemy of established companies.