Fortune.com - Technology - Can Google Grow Up?

No apologies for quoting at length.... Fortune.com - Technology - Can Google Grow Up?: "We'll sing more of Google's praises later, but first the worrisome news: Google has grown arrogant, making some of its executives as frustrating to deal with in negotiations as AOL's cowboy salesmen during the bubble. It has grown so fast that employees and business partners are often confused about who does what. A rise of stock- and option-stoked greed is creating rifts within the company. Employees carp that Google is morphing in strange and nerve-racking ways. And talk swirls over the question of who's really in charge: CEO Schmidt or co-founders Brin and Page?"...

All are aiming for what they see as Google's weak spot: lack of customer lock-in. ...Google's foes have a much firmer hold on customers, argues Seth Godin, a well-known Internet consultant and editor of last summer's widely distributed online book What Should Google Do?... consider the way My Yahoo brings you information on everything from your portfolio to fixing your house. They will probably use that same information to tailor search results. Google, meanwhile, knows little more about you than what you are currently searching for.
...
versus...
In a short time Google has become one of the world's best-loved brands. Movie stars like Gwyneth Paltrow and ex-Presidents like Jimmy Carter drop by for visits. A thousand people apply for jobs at Google every day."...

Though web-search startups were a dime a dozen, investors couldn't hand money over to Google fast enough. When the founders showed Sun Microsystems co-founder Andy Bechtolsheim a demo in the summer of 1998, he wrote a $100,000 check on the spot. Brin and Page had to wait a month until Google actually existed to cash it. In 1999 top venture capitalists Kleiner Perkins and Sequoia Capital invested $25 million. "It was very unfashionable to invest in a company like Google back then," said Michael Moritz, the Sequoia partner in charge of the deal, in an interview with FORTUNE last year. "But we thought Larry and Sergey were taking a fresh look." Soon after, Yahoo anted up $10 million...

Larry and Sergey spent more time talking about how they weren't going to make money—no user registration, no blast e-mails, no banner advertising—than how they were," says a participant in Google's early discussions. On Google's website, under the heading "Ten things Google has found to be true," No. 6 still reads, "You can make money without doing evil." Not doing evil is a common concern around Google and loosely translates into avoiding anything that mars Google's user experience...

Adsense, which puts ads on nonsearch sites. Read about the New York marathon on newyorktimes.com, for instance, and Adsense serves up ads for sports drinks, running shoes, or whoever else pays...

Those close to Google say that the company has begun to more closely resemble a madhouse than any kind of serene dot-com dream. It's a tough place to work, and a tough place to do business with.

Beyond the bean-bagged lobby, 12-hour days are considered standard, and an unspoken caste system has emerged. At the top are the engineers, people in the mold of Brin and Page. At the bottom are the contractors, the 30% of Google workers who labor alongside full-timers—yet without benefits, stock options, or access to the company intranet, not to mention to meetings or social events. That's fostered anger in Google's overeducated ranks....


The most immediate threat is Yahoo. It's expanding into new areas like product search (helping people to find goods, read reviews, compare prices, and buy) and local search (enabling users to find a plumber or landscaper in their neighborhood). Google has prototype sites that provide those services (froogle.google.com and labs.google.com/location), but they're not nearly as good. With about a 5% stake in Google, Yahoo goes quiet when talking about the company. Yet it's likely Yahoo will dump the stock after the IPO. Even sooner it will stop using Google's search on its site, relying instead on its newly acquired units. Says Jeff Weiner, senior vice president in charge of search: "We have every intention of deploying Inktomi and Overture throughout all our search..."

Then there's Microsoft. The company has an army of brainiacs working on incorporating web search into MSN and its new operating system, code-named Longhorn, due out in 2006. It plans to be able to index every user's hard drive and use the information to provide better searches. "All I'll say is that search is vitally important to us," says Chris Payne, Microsoft's executive in charge of search