Google — a money-losing business — until it borrowed and reimagined an idea from its biggest rival.
👇An interesting thread 🧵
👇An interesting thread 🧵
2/ The idea that made Google the world’s greatest search engine was all Page & Brin.
But the idea that turned Google into the world’s greatest company wasn’t theirs originally.
It was borrowed, with some key changes from their biggest early rival GoTo.com
But the idea that turned Google into the world’s greatest company wasn’t theirs originally.
It was borrowed, with some key changes from their biggest early rival GoTo.com
3/ In their seminal 1998 academic paper introducing the idea of Google, Page and Brin criticized advertising-funded search engines as
“inherently biased towards the advertisers and away from the needs of consumers.”
“inherently biased towards the advertisers and away from the needs of consumers.”
4/ However, the conventional wisdom at the time was that there wasn’t much money in search...
the real revenue came from keeping people on your own pages, where they could see your banner ads.
the real revenue came from keeping people on your own pages, where they could see your banner ads.
5/ By late 1999, though Google started to catch on with Internet users, but it was bleeding cash.
It was a period where things were looking pretty bleak.
It was a period where things were looking pretty bleak.
6/ During the same time, a rival search engine,
GoTo.com was beginning to reap huge revenues with a novel advertising model.
GoTo.com was beginning to reap huge revenues with a novel advertising model.
7/ GoTo.com was an attempt to solve the same problem Page and Brin had been working on...
how to build a search engine whose results wouldn’t be overrun by spam.
how to build a search engine whose results wouldn’t be overrun by spam.
8/ But where Page and Brin tackled the problem with algorithms, GoTo.com approached it from the business end.
GoTo.com came up with an audacious pricing scheme.
GoTo.com came up with an audacious pricing scheme.
9/ Instead of paying for page-views—an old-media model that had come to dominate the Web—
advertisers would pay only when people actually clicked on their ads.
advertisers would pay only when people actually clicked on their ads.
10/ And their placement on the GoTo.com results page would be determined through an auction,
so that more desirable keywords would command higher prices,
while less common keywords could be had for as little as a penny per click.
so that more desirable keywords would command higher prices,
while less common keywords could be had for as little as a penny per click.
11/ Coincidently, in late 2000, Google rolled out a new, self-service advertising product called AdWords that allowed businesses to purchase text ads on search-results pages.
In 2002 Google launched its own pay-per-click, auction-based search-advertising product- AdWords Select.
In 2002 Google launched its own pay-per-click, auction-based search-advertising product- AdWords Select.
12/ It was instant gold, and Google soon dropped the original AdWords altogether.
As revenues rocketed, the company turned its first annual profit that year.
And the rest is all history.
As revenues rocketed, the company turned its first annual profit that year.
And the rest is all history.
13/ Google didn’t invent search, they reinvented search.
Google didn’t invent email, they reinvented email.
In fact, it’s not an exaggeration to say that Google doesn’t imagine business products, they reimagine them.
@MavenHQ #business #storytime
Google didn’t invent email, they reinvented email.
In fact, it’s not an exaggeration to say that Google doesn’t imagine business products, they reimagine them.
@MavenHQ #business #storytime
@threadreaderapp please unroll.
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