15 September 2009

Unlocking the Internet

This Google logo commemorates the visit by Britain’s Queen Elizabeth II to Google’s London office.

This article is excerpted from the book Outline of the U.S. Economy, published by the Bureau of International Information Programs. View the entire book (PDF, 3.26 MB).

In 1998, two graduate students at Stanford University in California thought they saw how to unlock the Internet’s rapidly expanding universe of information. A decade later, Google—as they called their invention—had become the dominant Internet search engine in most of the world. Its revenue topped $20 billion in 2008, half from outside the United States, and its employees numbered 20,000. Its computers could store, index, and search more than one trillion other Web site pages. So ubiquitous had this search engine grown that its very name had become a verb: When most people want to find something on the Internet, they “google” it.

Although this astonishing success has rarely been matched, its ingredients are a familiar part of the U.S. economic story. Google illustrates how ideas, entrepreneurial ambition, university research, and private capital together can create breakthrough innovations.

Google’s founders, Sergey Brin and Larry Page, started with particular advantages. Brin, born in Moscow, and Page, a midwesterner, are sons of university professors and computer professionals. “Both had grown up in families where intellectual combat was part of the daily diet,” says David Vise, author of The Google Story. They met by chance in 1995 at an orientation for new doctoral students at Stanford University’s graduate school, and by the next year they were working together at a new Stanford computer science center built with a $6 million donation from Microsoft founder Bill Gates.

As with other Internet users, Brin and Page were frustrated by the inability of the existing search programs to provide a useful sorting of the thousands of sites that were identified by Web queries. What if the search results could be ranked, they asked themselves, so that pages that seemed objectively most important were listed first, followed by the next most important, and so forth? Page’s solution began with the principle that sites on the Web that got the most traffic should stand at the top in search reports. He also developed ways of assessing which sites were most intrinsically important.

At this point, Stanford stepped in with critical help. The university encourages its PhD students to use its resources to develop commercial products. Its Office of Technology Licensing paid for Google’s patent. The first funds to purchase the computers used for Google’s searches came from a Stanford digital library project. Their first users were Stanford students and faculty.

The linkages between university research and successful business innovation have not always thrived in regions where technology industries are not well rooted. But Stanford, in Palo Alto, California, stands at the center of Silicon Valley, a matrix of technology companies, investment funds, and individuals with vast personal fortunes that evolved during the decades of the computer industry’s evolution.

In 1998, Brin and Page met Andy Bechtolsheim, a co-founder of Sun Microsystems, an established Silicon Valley leader. Bechtolsheim believed that Brin and Page could succeed. His $100,000 personal check helped the pair build their computer network and boosted their credibility. A year later, Google was handling 500,000 queries a day and winning recognition across the Internet community. Google’s clear advantages over its rivals and the inventors’ commitment attracted $25 million in backing from two of Silicon Valley’s biggest venture funds. And the founders got the money without having to give up control of the company.

A decade after its founding, Google’s goals have soared astronomically. As author Randall Stross, author of Planet Google, puts it, the company aims to “organize everything we know.” Its initiatives include an effort to digitize every published book in the world.

Google has emerged as a metaphor for the openness and creativity of the U.S. economy, but also for the far-ranging U.S. power that so worries foreign critics. Human rights advocates and journalists blasted Google’s 2006 agreement to self-censor its search engine in China at the direction of Beijing’s government. Google answers that these kinds of restrictions will fade with the spread of democracy and individual freedoms. If that proves true, this example of American entrepreneurship will have been an agent of that change.