Google began with a mission: to create the ultimate search engine to help users tame the unruly and exponentially growing repository of information that is the internet. And most would agree that when the word “Google” became a verb, that mission was largely accomplished.
It had been nearly six years since Google’s attention-grabbing initial public offering and, despite overall stock market weakness, Google remained strong. Although the stock moved with the market in general, the company returned significantly higher returns to its shareholders than did the S&P 500 (Exhibit1). Founders Sergey Brin and Larry Page had created a huge empire in which they now faced challenges of continued growth and innovation. These challenges would carry them through the second decade of the new millennium.
Google was founded in a garage in 1998 by Larry and Sergey Brin, two Stanford computer science graduate students, based on ideas generated in 1995. The name Google was chosen as a play on googol, a mathematical term for the number one followed by one hundred zeros. It is thought the term was appealing to the founders as it related to their mission to organize an exponentially growing web. Foundered on $100,000 from Sun Microsystems, Brin and Page were on their way to creating and Internet engine giant. Google immediately gained the attention of the Internet sector for being a better search engine than its competitors, including Yahoo!
By 2000, Google was in 15 languages and gaining international acclaim for its web search services. The Google toolbar was first released in late 2000. Current Chairman of the Board Eric Schmidt joined Google in that capacity in March 2001. In 2002, Google released Adwords, which was a new cost per click pricing system for advertising.
In August 2004, Google went public with 19,605,042 shares at an opening price of $83 per share. Exhibit1 traces the growth of Google stock to over $600 per share and the end of 2009. Gmail, an instant messaging and free e-mail service, was released in 2006, just a few months before the announced acquisition of YouTube. In that announcement, CEO Eric Shmidt stated:
The YouTube team has built an exciting and powerful media platform that compliments Google’s mission to organize the word’s information and make it universally accessible and useful. Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners, and advertisers.