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Google: Fortune's Cover Story

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The December 13, 2004 issue of Fortune arrived today with Brin and Page on the cover. It asks the question, "Is this company worth $165 a share. The full text of the article is also online but requires a Fortune subscription.

John points out that a "web only" interview with Google's CEO Eric Schmidt, is available to non-subs.

Here's a quick review of the article and a few quotes:

Fred Vogelstein's opens the article explainig that one reason many people like Google these days, it's making them money.

The next section looks at how Google is able to innovate. "[Google is] constantly tweaking its signature search product and all its offshoots at a rapid rate. It might not have the impregnable wall against competitors that its blue-chip peers in tech have—digital auction house eBay with its network effect or Microsoft with its desktop monopoly—but it's trying to build something comparable through quick and easy-to-use innovations that keep surfers coming back."

+ A look at what Yahoo, MS, and Amazon are up to.

+ Overview about how Google makes money with both paid ads on search result pages and contextual advertising. SeatGuru.com is mentioned. AdSense ads have made it a $120,000 year business.

"Google's goal is to get as deeply meshed as possible with advertising customers. It already handles online advertising for most of the FORTUNE 100, corporate giants with multimillion-dollar ad budgets like Citigroup, Sony, and Wal-Mart. Its ambition is to go further, cataloging every product a big company has and then advertising each one of them with unprecedented efficiency on the web."

Vogelstein offers up a few graphs about how Brin, Page, Schmidt, and the Google culture. He writes, "there seems to be a method to the madness.

A list of a few Gogleplex perks:
+ Food (we read about this one all of the time)
+ Free Laundry
+ Banking

We read about Google starting meetings at 7 minutes past the hour. Why? "It was my {Eric Schmidt] idea because that's how college works," Schmidt says. Classes often begin at 9:05 or 9:10."

Next, a look at Google's recruiting efforts:
"A team of nearly 50 recruiters divided by specialty combs through résumés, which applicants must submit online, then dumps them into a program that routes those selected for interviews to the proper hiring committee and throws the rest in the electronic trash. Interviewing for a job is a grueling process that can take months. Every opening has a hiring committee of seven to nine Googlers who must meet you. Engineers may be asked to write software or debug a program on the spot. Marketers are often required to take a writing test. No matter how long you have been out of school, Google requires that you submit your transcripts to be considered. The rigorous process is important partly for the obvious reason that in high tech, as on Wall Street, being the smartest and the cleverest at what you do is a critical business advantage."

Vogelstein then offers a pagagraph or two about how the company has deals with customers. "Some customers still complain. One says that doing a simple deal with Google is harder than doing a complicated deal with Microsoft. But others who used to gripe about Google's disorganization say there's actually been some improvement....Says another executive who has done business with Google: "They're less arrogant, and they listen better."

Near the end of the article Vogelstein writes, "For all its impressive technology and verve, Google, as noted earlier, has no such clear competitive advantage. That may help explain why?as was true during the late, great dot-com bubble?many insiders are rushing for the exits. Three top executives, engineering chief Wayne Rossing, general counsel David Drummond, and human resources chief Shona Brown, said in SEC filings at the end of November that they had sold blocks of stock worth millions of dollars."


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