Features: "Google's earnest but likeable founders Larry Page and Sergey Brin are asking potential Google investors to read the entire, 164-page prospectus submitted to the SEC last night. Then, based on what they have read, they must decide how many shares they want and how much they would like to pay for them.
Based on these applications, Google - in league with underwriters Morgan Stanley and Credit Suisse First Boston - will fix an initial public offering price that it hopes will last and will then allocate shares to those people who either matched or exceeded (but not by too much) it. It is thus like a giant game of 'make a thoroughly well-informed guess at the number of sweeties in the sweetie jar'.
The shares on sale will be some of those of Page and Brin themselves, along with those of other existing investors that the two are hoping to persuade to get involved. Its investors include Arnold Schwarzenegger, Tiger Woods and Shaqille O'Neill; no wonder they'll be called Class A stocks.
But, since it is clear at this stage neither how many shares will be on sale, nor how much they will go for, there is no real guessing at the value of this first visit of the world's most eagerly awaited stock to the stock market. The only figure Google has committed to is $2.7bn, an estimate of the total offering price generated so NYSE could set a registration fee ($344,000).
However, for most of our readers there is something of a problem: no-one 'located' outside the US will be able to bid. For such a global business, this is vexing, especially given Google's reasoning: 'We have not undertaken any efforts to qualify this offering for offers to individual investors in any jurisdiction outside the US.'In other words, it was too much like hard work to do all thi"
Saturday, May 01, 2004
By the Numbers: Google IPO Filing Tells Story of '03
By the Numbers: Google IPO Filing Tells Story of '03: The first quarter of '04 is positively eye-popping: $390 million in revenue, $64 million in net income. This is a company on track to do $1.8 billion in business in 2004 only six years after launching.
Partner Pay Intrudes on Google Fantasy: "The folks at Google would have you believe that they've modeled their company on the principles of Warren Buffett.
But investor beware: The more appropriate comparison is Willy Wonka"
Gmail accounts go up for bid | CNET News.com: "Google, which last month announced it was testing a new e-mail system, invited 1,000 people to join the trial. Gmail offers 1 gigabyte of storage and includes a news aggregation page and newsgroup interface, and allows users to search through their e-mail. The service has generated excitement, but not as much as Google's upcoming IPO...
Beta testers invited by Google to take part in its new free e-mail service also received invitations to give to another person, but many are being auctioned on eBay, so far fetching bids as high as $61.
"Gmail is still in beta testing, so Google is strictly limiting how many people are using the service at this time," wrote one seller, who has five days left on the auction and six interested bidders. "This is an opportunity to get in 'on the ground floor' with this interesting new e-mail service."
Currently, 42 testers have listed their invitations on eBay, with one offering to sell an additional invitation outright--for a mere $199. "
Partner Pay Intrudes on Google Fantasy: "The folks at Google would have you believe that they've modeled their company on the principles of Warren Buffett.
But investor beware: The more appropriate comparison is Willy Wonka"
Gmail accounts go up for bid | CNET News.com: "Google, which last month announced it was testing a new e-mail system, invited 1,000 people to join the trial. Gmail offers 1 gigabyte of storage and includes a news aggregation page and newsgroup interface, and allows users to search through their e-mail. The service has generated excitement, but not as much as Google's upcoming IPO...
Beta testers invited by Google to take part in its new free e-mail service also received invitations to give to another person, but many are being auctioned on eBay, so far fetching bids as high as $61.
"Gmail is still in beta testing, so Google is strictly limiting how many people are using the service at this time," wrote one seller, who has five days left on the auction and six interested bidders. "This is an opportunity to get in 'on the ground floor' with this interesting new e-mail service."
Currently, 42 testers have listed their invitations on eBay, with one offering to sell an additional invitation outright--for a mere $199. "
Friday, April 30, 2004
Google Weblogs
How to sound like a Google insider
By Frank Barnako, CBS.MarketWatch.com
Last Update: 9:49 AM ET Apr 30, 2004
WASHINGTON (CBS.MW) -- Bloggers have come to the aid of those who can't bring themselves to read the prospectus for the Google stock offering and lack their own spy networks in Silicon Valley.
Aaron Swartz, a self-described "teenage writer, coder and hacker," maintains a Google watch at Google Weblog: His latest post comes from a temporary worker, who described trying to eavesdrop on yesterday's company meeting about the stock offering. Afterward, "We grabbed someone we knew, who told us, 'I think we're doing the right thing.'"
Jason Calacanis, a serial Internet entrepreneur, sponsors The Unofficial Google Weblog - google.weblogsinc.com: as part of his Weblogs Inc. venture. Nino Marchetti, a freelance journalist in San Mateo, Calif., writes it. He watches for stories and information, often picking up bits and pieces the major media don't have.
Google Blogoscoped - About Me - Why a Google Blog?: is written by a 20-something-year-old German, Jan Philipp Lenssen. His day job is designing Web sites. Lenssen concentrates on the technology behind Google. His programming skills come in handy as he passes along links and tips on how he makes Google do even more.
Google IPO Central - Unofficial Site for Latest Investing and Stock Offering News has been reporting on its eponymous beat for eight months. Other sites for interested potential investors include Watching Google Like A Hawk - Google News Watch Site; We Love Google :: Google Rules!: "Google Fan", which reported that one of the company's founders drives a Toyota Prius; and � Google Indicateur: .
By Frank Barnako, CBS.MarketWatch.com
Last Update: 9:49 AM ET Apr 30, 2004
WASHINGTON (CBS.MW) -- Bloggers have come to the aid of those who can't bring themselves to read the prospectus for the Google stock offering and lack their own spy networks in Silicon Valley.
Aaron Swartz, a self-described "teenage writer, coder and hacker," maintains a Google watch at Google Weblog: His latest post comes from a temporary worker, who described trying to eavesdrop on yesterday's company meeting about the stock offering. Afterward, "We grabbed someone we knew, who told us, 'I think we're doing the right thing.'"
Jason Calacanis, a serial Internet entrepreneur, sponsors The Unofficial Google Weblog - google.weblogsinc.com: as part of his Weblogs Inc. venture. Nino Marchetti, a freelance journalist in San Mateo, Calif., writes it. He watches for stories and information, often picking up bits and pieces the major media don't have.
Google Blogoscoped - About Me - Why a Google Blog?: is written by a 20-something-year-old German, Jan Philipp Lenssen. His day job is designing Web sites. Lenssen concentrates on the technology behind Google. His programming skills come in handy as he passes along links and tips on how he makes Google do even more.
Google IPO Central - Unofficial Site for Latest Investing and Stock Offering News has been reporting on its eponymous beat for eight months. Other sites for interested potential investors include Watching Google Like A Hawk - Google News Watch Site; We Love Google :: Google Rules!: "Google Fan", which reported that one of the company's founders drives a Toyota Prius; and � Google Indicateur: .
OOP
OOP: "There is no over optimization penalty:
From GG: 'Has Google applied some sort of OOP or filter to the algorithm since the Florida update or was the drastic change in SERPs purely the result of new ranking criteria?'
It's the second one. People post around here about filters, blocking, penalties, etc. etc. A far better explanation is 'things which used to work before don't receive the same amount of credit now.' It's natural for people who are way out there with their linking strategies or their page-building strategies to think of a drop as an over-optimization penalty, but it's more realistic to conclude that Google is weighting criteria differently so that over-optimized sites just aren't doing as well now. http://www.markcarey.com/googleguy-says/archives/discuss-denial-of-google-over-optimization-penalty.html "
Later in discussion: OOP: "I had 2 sites with 2 owners both targeting the same phrase
they had the one and 2 postions
they both got kicked out during florida
the one guy didn't sweat it , the ohter was emailing wanting to try anything
I took the keywords out of about 50 inbound links and took the keywords out of the title tag and a bunch of the text
nothing happened then suddenly they where both back except the guy whose site was the same was at number 1 and the one i had chaged was number 25 "
From GG: 'Has Google applied some sort of OOP or filter to the algorithm since the Florida update or was the drastic change in SERPs purely the result of new ranking criteria?'
It's the second one. People post around here about filters, blocking, penalties, etc. etc. A far better explanation is 'things which used to work before don't receive the same amount of credit now.' It's natural for people who are way out there with their linking strategies or their page-building strategies to think of a drop as an over-optimization penalty, but it's more realistic to conclude that Google is weighting criteria differently so that over-optimized sites just aren't doing as well now. http://www.markcarey.com/googleguy-says/archives/discuss-denial-of-google-over-optimization-penalty.html "
Later in discussion: OOP: "I had 2 sites with 2 owners both targeting the same phrase
they had the one and 2 postions
they both got kicked out during florida
the one guy didn't sweat it , the ohter was emailing wanting to try anything
I took the keywords out of about 50 inbound links and took the keywords out of the title tag and a bunch of the text
nothing happened then suddenly they where both back except the guy whose site was the same was at number 1 and the one i had chaged was number 25 "
Form S-1 googles registration doc
Form S-1: "As filed with the Securities and Exchange Commission on April 29, 2004 Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
GOOGLE INC.
(Exact name of Registrant as specified in its charter) "
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
GOOGLE INC.
(Exact name of Registrant as specified in its charter) "
John Battelle's Searchblog on Googles open letter
John Battelle's Searchblog: "While my summary of the letter may sound negative, it's my honest and initial response: to me, the letter comes off pretty strong, and likely will anger many on Wall Street. But I have to commend the founders for sticking to their beliefs, and using the IPO as something of a megaphone/soapbox. It is brave, unique, and rather commendable to very publicly state that the founders are controlling the company, and the founders will decide what is best for Google, not Wall Street. They've set themselves a very high long-term bar, claiming they will best the system, in essence. I think it will be very interesting to see how Wall Street responds. There is a chance, in the end, that the Street will feel slighted, and turn its back on the company."
Newsday.com: Text of Open Letter from Google's Founders
No apologies for posting this in full for posterity...Newsday.com: Text of Open Letter from Google's Founders: "Text of Open Letter from Google's Founders
The 'Letter from the Founders' is an open letter attached to Google's April 29, 2004 IPO filing'
LETTER FROM THE FOUNDERS
"AN OWNER'S MANUAL" FOR GOOGLE'S SHAREHOLDERS (1)
INTRODUCTION
Google is not a conventional company. We do not intend to become one. Throughout Google's evolution as a privately held company, we have managed Google differently. We have also emphasized an atmosphere of creativity and challenge, which has helped us provide unbiased, accurate and free access to information for those who rely on us around the world.
Now the time has come for the company to move to public ownership. This change will bring important benefits for our employees, for our present and future shareholders, for our customers, and most of all for Google users. But the standard structure of public ownership may jeopardize the independence and focused objectivity that have been most important in Google's past success and that we consider most fundamental for its future. Therefore, we have designed a corporate structure that will protect Google's ability to innovate and retain its most distinctive characteristics. We are confident that, in the long run, this will bring Google and its shareholders, old and new, the greatest economic returns. We want to clearly explain our plans and the reasoning and values behind them. We are delighted you are considering an investment in Google and are reading this letter.
Sergey and I intend to write you a letter like this one every year in our annual report. We'll take turns writing the letter so you'll hear directly from each of us. We ask that you read this letter in conjunction with the rest of this prospectus.
SERVING END USERS
Sergey and I founded Google because we believed we could provide a great service to the world--instantly delivering relevant information on any topic. Serving our end users is at the heart of what we do and remains our number one priority.
Our goal is to develop services that improve the lives of as many people as possible--to do things that matter. We make our services as widely available as we can by supporting over 97 languages and by providing most services for free. Advertising is our principal source of revenue, and the ads we provide are relevant and useful rather than intrusive and annoying. We strive to provide users with great commercial information.
We are proud of the products we have built, and we hope that those we create in the future will have an even greater positive impact on the world.
LONG TERM FOCUS
As a private company, we have concentrated on the long term, and this has served us well. As a public company, we will do the same. In our opinion, outside pressures too often tempt companies to sacrifice long-term opportunities to meet quarterly market expectations. Sometimes this pressure has caused companies to manipulate financial results in order to "make their quarter." In Warren Buffett's words, "We won't 'smooth' quarterly or annual results: If earnings figures are lumpy when they reach headquarters, they will be lumpy when they reach you."
If opportunities arise that might cause us to sacrifice short term results but are in the best long term interest of our shareholders, we will take those opportunities. We will have the fortitude to do this. We would request that our shareholders take the long term view.
Many companies are under pressure to keep their earnings in line with analysts' forecasts. Therefore, they often accept smaller, but predictable, earnings rather than larger and more unpredictable returns. Sergey and I feel this is harmful, and we intend to steer in the opposite direction.
(1) Much of this was inspired by Warren Buffett's essays in his annual reports and his "An Owner's Manual" to Berkshire Hathaway shareholders.
Google has had adequate cash to fund our business and has generated additional cash through operations. This gives us the flexibility to weather costs, benefit from opportunities and optimize our long term earnings. For example, in our ads system we make many improvements that affect revenue in both directions. These are in areas like end user relevance and satisfaction, advertiser satisfaction, partner needs and targeting technology. We release improvements immediately rather than delaying them, even though delay might give "smoother" financial results. You have our commitment to execute quickly to achieve long term value rather than making the quarters more predictable.
We will make decisions on the business fundamentals, not accounting considerations, and always with the long term welfare of our company and shareholders in mind.
Although we may discuss long term trends in our business, we do not plan to give earnings guidance in the traditional sense. We are not able to predict our business within a narrow range for each quarter. We recognize that our duty is to advance our shareholders' interests, and we believe that artificially creating short term target numbers serves our shareholders poorly. We would prefer not to be asked to make such predictions, and if asked we will respectfully decline. A management team distracted by a series of short term targets is as pointless as a dieter stepping on a scale every half hour.
RISK VS REWARD IN THE LONG RUN
Our business environment changes rapidly and needs long term investment. We will not hesitate to place major bets on promising new opportunities.
We will not shy away from high-risk, high-reward projects because of short term earnings pressure. Some of our past bets have gone extraordinarily well, and others have not. Because we recognize the pursuit of such projects as the key to our long term success, we will continue to seek them out. For example, we would fund projects that have a 10% chance of earning a billion dollars over the long term. Do not be surprised if we place smaller bets in areas that seem very speculative or even strange. As the ratio of reward to risk increases, we will accept projects further outside our normal areas, especially when the initial investment is small.
We encourage our employees, in addition to their regular projects, to spend 20% of their time working on what they think will most benefit Google. This empowers them to be more creative and innovative. Many of our significant advances have happened in this manner. For example, AdSense for content and Google News were both prototyped in "20% time." Most risky projects fizzle, often teaching us something. Others succeed and become attractive businesses.
We may have quarter-to-quarter volatility as we realize losses on some new projects and gains on others. If we accept this, we can all maximize value in the long term. Even though we are excited about risky projects, we expect to devote the vast majority of our resources to our main businesses, especially since most people naturally gravitate toward incremental improvements.
EXECUTIVE ROLES
We run Google as a triumvirate. Sergey and I have worked closely together for the last eight years, five at Google. Eric, our CEO, joined Google three years ago. The three of us run the company collaboratively with Sergey and me as Presidents. The structure is unconventional, but we have worked successfully in this way.
To facilitate timely decisions, Eric, Sergey and I meet daily to update each other on the business and to focus our collaborative thinking on the most important and immediate issues. Decisions are often made by one of us, with the others being briefed later. This works because we have tremendous trust and respect for each other and we generally think alike. Because of our intense long term working relationship, we can often predict differences of opinion among the three of us. We know that when we disagree, the correct decision is far from obvious. For important decisions, we discuss the issue with the larger team. Eric, Sergey and I run the company without any significant internal conflict, but with healthy debate. As different topics come up, we often delegate decision-making responsibility to one of us.
We hired Eric as a more experienced complement to Sergey and me to help us run the business. Eric was CTO of Sun Microsystems. He was also CEO of Novell and has a Ph.D. in computer science, a very unusual and important combination for Google given our scientific and technical culture. This partnership among the three of us has worked very well and we expect it to continue. The shared judgments and extra energy available from all three of us has significantly benefited Google.
Eric has the legal responsibilities of the CEO and focuses on management of our vice presidents and the sales organization. Sergey focuses on engineering and business deals. I focus on engineering and product management. All three of us devote considerable time to overall management of the company and other fluctuating needs. We are extremely fortunate to have talented management that has grown the company to where it is today--they operate the company and deserve the credit.
CORPORATE STRUCTURE
We are creating a corporate structure that is designed for stability over long time horizons. By investing in Google, you are placing an unusual long-term bet on the team, especially Sergey and me, and on our innovative approach.
We want Google to become an important and significant institution. That takes time, stability and independence. We bridge the media and technology industries, both of which have experienced considerable consolidation and attempted hostile takeovers.
In the transition to public ownership, we have set up a corporate structure that will make it harder for outside parties to take over or influence Google. This structure will also make it easier for our management team to follow the long term, innovative approach emphasized earlier. This structure, called a dual class voting structure, is described elsewhere in this prospectus.
The main effect of this structure is likely to leave our team, especially Sergey and me, with significant control over the company's decisions and fate, as Google shares change hands. New investors will fully share in Google's long term growth but will have less influence over its strategic decisions than they would at most public companies.
While this structure is unusual for technology companies, it is common in the media business and has had a profound importance there. The New York Times Company, the Washington Post Company and Dow Jones, the publisher of The Wall Street Journal, all have similar dual class ownership structures. Media observers frequently point out that dual class ownership has allowed these companies to concentrate on their core, long-term interest in serious news coverage, despite fluctuations in quarterly results. The Berkshire Hathaway company has applied the same structure, with similar beneficial effects. From the point of view of long-term success in advancing a company's core values, the structure has clearly been an advantage.
Academic studies have shown that from a purely economic point of view, dual class structures have not harmed the share price of companies. The shares of each of our classes have identical economic rights and differ only as to voting rights.
Google has prospered as a private company. As a public company, we believe a dual class voting structure will enable us to retain many of the positive aspects of being private. We understand some investors do not favor dual class structures. We have considered this point of view carefully, and we have not made our decision lightly. We are convinced that everyone associated with Google--including new investors--will benefit from this structure.
To help us govern, we have recently expanded our Board of Directors to include three additional members. John Hennessy is the President of Stanford and has a Doctoral degree in computer science. Art Levinson is CEO of Genentech and has a Ph.D. in biochemistry. Paul Otellini is President and COO of Intel. We could not be more excited about the caliber and experience of these directors.
We have a world class management team impassioned by Google's mission and responsible for Google's success. We believe the stability afforded by the dual-class structure will enable us to retain our unique culture and continue to attract and retain talented people who are Google's life blood. Our colleagues will be able to trust that they themselves and their labors of hard work, love and creativity will be well cared for by a company focused on stability and the long term.
As an investor, you are placing a potentially risky long term bet on the team, especially Sergey and me. The two of us, Eric and the rest of the management team recognize that our individual and collective interests are deeply aligned with those of the new investors who choose to support Google. Sergey and I are committed to Google for the long term. The broader Google team has also demonstrated an extraordinary commitment to our long term success. With continued hard work and good fortune, this commitment will last and flourish.
When Sergey and I founded Google, we hoped, but did not expect, it would reach its current size and influence. Our intense and enduring interest was to objectively help people find information efficiently. We also believed that searching and organizing all the world's information was an unusually important task that should be carried out by a company that is trustworthy and interested in the public good. We believe a well functioning society should have abundant, free and unbiased access to high quality information. Google therefore has a responsibility to the world. The dual-class structure helps ensure that this responsibility is met. We believe that fulfilling this responsibility will deliver increased value to our shareholders.
BECOMING A PUBLIC COMPANY
Google should go public soon.
We assumed when founding Google that if things went well, we would likely go public some day. But we were always open to staying private, and a number of developments reduced the pressure to change. We soon were generating cash, removing one important reason why many companies go public. Requirements for public companies became more significant in the wake of recent corporate scandals and the resulting passage of the Sarbanes-Oxley Act. We made business progress we were happy with. Our investors were patient and willing to stay with Google. We have been able to meet our business needs with our current level of cash.
A number of factors weighed on the other side of the debate. Our growth has reduced some of the advantages of private ownership. By law, certain private companies must report as if they were public companies. The deadline imposed by this requirement accelerated our decision. As a smaller private company, Google kept business information closely held, and we believe this helped us against competitors. But, as we grow larger, information becomes more widely known. As a public company, we will of course provide you with all information required by law, and we will also do our best to explain our actions. But we will not unnecessarily disclose all of our strengths, strategies and intentions. We have transferred significant ownership of Google to employees in return for their efforts in building the business. And, we benefited greatly by selling $26 million of stock to our early investors before we were profitable. Thus, employee and investor liquidity were significant factors.
We have demonstrated a proven business model and have designed a corporate structure that will make it easier to become a public company. A large, diverse, enthusiastic shareholder base will strengthen the company and benefit from our continued success. A larger cash balance will provide Google with flexibility and protection against adversity. All in all, going public now is the right decision.
IPO PRICING AND ALLOCATION
Informed investors willing to pay the IPO price should be able to buy as many shares as they want, within reason, in the IPO, as on the stock market.
It is important to us to have a fair process for our IPO that is inclusive of both small and large investors. It is also crucial that we achieve a good outcome for Google and its current shareholders. This has led us to pursue an auction-based IPO for our entire offering. Our goal is to have a share price that reflects a fair market valuation of Google and that moves rationally based on changes in our business and the stock market. (The auction process is discussed in more detail elsewhere in this prospectus.)
Many companies have suffered from unreasonable speculation, small initial share float, and boom-bust cycles that hurt them and their investors in the long run. We believe that an auction-based IPO will minimize these problems.
An auction is an unusual process for an IPO in the United States. Our experience with auction-based advertising systems has been surprisingly helpful in the auction design process for the IPO. As in the stock market, if people try to buy more stock than is available, the price will go up. And of course, the price will go down if there aren't enough buyers. This is a simplification, but it captures the basic issues. Our goal is to have an efficient market price--a rational price set by informed buyers and sellers--for our shares at the IPO and afterward. Our goal is to achieve a relatively stable price in the days following the IPO and that buyers and sellers receive a fair price at the IPO.
We are working to create a sufficient supply of shares to meet investor demand at IPO time and after. We are encouraging current shareholders to consider selling some of their shares as part of the offering. These shares will supplement the shares the company sells to provide more supply for investors and hopefully provide a more stable fair price. Sergey and I, among others, are currently planning to sell a fraction of our shares in the IPO. The more shares current shareholders sell, the more likely it is that they believe the price is not unfairly low. The supply of shares available will likely have an effect on the clearing price of the auction. Since the number of shares being sold is likely to be larger at a high price and smaller at a lower price, investors will likely want to consider the scope of current shareholder participation in the IPO. We may communicate from time to time that we would be sellers rather than buyers.
We would like you to invest for the long term, and to do so only at or below what you determine to be a fair price. We encourage investors not to invest in Google at IPO or for some time after, if they believe the price is not sustainable over the long term.
We intend to take steps to help ensure shareholders are well informed. We encourage you to read this prospectus. We think that short term speculation without paying attention to price is likely to lose you money, especially with our auction structure.
GOOGLERS
Our employees, who have named themselves Googlers, are everything. Google is organized around the ability to attract and leverage the talent of exceptional technologists and business people. We have been lucky to recruit many creative, principled and hard working stars. We hope to recruit many more in the future. We will reward and treat them well.
We provide many unusual benefits for our employees, including meals free of charge, doctors and washing machines. We are careful to consider the long term advantages to the company of these benefits. Expect us to add benefits rather than pare them down over time. We believe it is easy to be penny wise and pound foolish with respect to benefits that can save employees considerable time and improve their health and productivity.
The significant employee ownership of Google has made us what we are today. Because of our employee talent, Google is doing exciting work in nearly every area of computer science. We are in a very competitive industry where the quality of our product is paramount. Talented people are attracted to Google because we empower them to change the world; Google has large computational resources and distribution that enables individuals to make a difference. Our main benefit is a workplace with important projects, where employees can contribute and grow. We are focused on providing an environment where talented, hard working people are rewarded for their contributions to Google and for making the world a better place.
DON'T BE EVIL
Don't be evil. We believe strongly that in the long term, we will be better served--as shareholders and in all other ways--by a company that does good things for the world even if we forgo some short term gains. This is an important aspect of our culture and is broadly shared within the company.
Google users trust our systems to help them with important decisions: medical, financial and many others. Our search results are the best we know how to produce. They are unbiased and objective, and we do not accept payment for them or for inclusion or more frequent updating. We also display advertising, which we work hard to make relevant, and we label it clearly. This is similar to a newspaper, where the advertisements are clear and the articles are not influenced by the advertisers' payments. We believe it is important for everyone to have access to the best information and research, not only to the information people pay for you to see.
MAKING THE WORLD A BETTER PLACE
We aspire to make Google an institution that makes the world a better place. With our products, Google connects people and information all around the world for free. We are adding other powerful services such as Gmail that provides an efficient one gigabyte Gmail account for free. By releasing services for free, we hope to help bridge the digital divide. AdWords connects users and advertisers efficiently, helping both. AdSense helps fund a huge variety of online web sites and enables authors who could not otherwise publish. Last year we created Google Grants--a growing program in which hundreds of non-profits addressing issues, including the environment, poverty and human rights, receive free advertising. And now, we are in the process of establishing the Google Foundation. We intend to contribute significant resources to the foundation, including employee time and approximately 1% of Google's equity and profits in some form. We hope someday this institution may eclipse Google itself in terms of overall world impact by ambitiously applying innovation and significant resources to the largest of the world's problems.
SUMMARY AND CONCLUSION
Google is not a conventional company. Eric, Sergey and I intend to operate Google differently, applying the values it has developed as a private company to its future as a public company. Our mission and business description are available in the rest of the prospectus; we encourage you to carefully read this information. We will optimize for the long term rather than trying to produce smooth earnings for each quarter. We will support selected high-risk, high-reward projects and manage our portfolio of projects. We will run the company collaboratively with Eric, our CEO, as a team of three. We are conscious of our duty as fiduciaries for our shareholders, and we will fulfill those responsibilities. We will continue to attract creative, committed new employees, and we will welcome support from new shareholders. We will live up to our "don't be evil" principle by keeping user trust and not accepting payment for search results. We have a dual-class structure that is biased toward stability and independence and that requires investors to bet on the team, especially Sergey and me.
In this letter we have explained our thinking on why Google is better off going public. We have talked about our IPO auction method and our desire for stability and access for all investors. We have discussed our goal to have investors who determine a rational price and invest for the long term only if they can buy at that price. Finally, we have discussed our desire to create an ideal working environment that will ultimately drive the success of Google by retaining and attracting talented Googlers.
We have tried hard to anticipate your questions. It will be difficult for us to respond to them given legal constraints during our offering process. We look forward to a long and hopefully prosperous relationship with you, our new investors. We wrote this letter to help you understand our company.
We have a strong commitment to our users worldwide, their communities, the web sites in our network, our advertisers, our investors, and of course our employees. Sergey and I, and the team will do our best to make Google a long term success and the world a better place.
Larry Page
Sergey Brin
Copyright © 2004, Newsday, Inc.
The 'Letter from the Founders' is an open letter attached to Google's April 29, 2004 IPO filing'
LETTER FROM THE FOUNDERS
"AN OWNER'S MANUAL" FOR GOOGLE'S SHAREHOLDERS (1)
INTRODUCTION
Google is not a conventional company. We do not intend to become one. Throughout Google's evolution as a privately held company, we have managed Google differently. We have also emphasized an atmosphere of creativity and challenge, which has helped us provide unbiased, accurate and free access to information for those who rely on us around the world.
Now the time has come for the company to move to public ownership. This change will bring important benefits for our employees, for our present and future shareholders, for our customers, and most of all for Google users. But the standard structure of public ownership may jeopardize the independence and focused objectivity that have been most important in Google's past success and that we consider most fundamental for its future. Therefore, we have designed a corporate structure that will protect Google's ability to innovate and retain its most distinctive characteristics. We are confident that, in the long run, this will bring Google and its shareholders, old and new, the greatest economic returns. We want to clearly explain our plans and the reasoning and values behind them. We are delighted you are considering an investment in Google and are reading this letter.
Sergey and I intend to write you a letter like this one every year in our annual report. We'll take turns writing the letter so you'll hear directly from each of us. We ask that you read this letter in conjunction with the rest of this prospectus.
SERVING END USERS
Sergey and I founded Google because we believed we could provide a great service to the world--instantly delivering relevant information on any topic. Serving our end users is at the heart of what we do and remains our number one priority.
Our goal is to develop services that improve the lives of as many people as possible--to do things that matter. We make our services as widely available as we can by supporting over 97 languages and by providing most services for free. Advertising is our principal source of revenue, and the ads we provide are relevant and useful rather than intrusive and annoying. We strive to provide users with great commercial information.
We are proud of the products we have built, and we hope that those we create in the future will have an even greater positive impact on the world.
LONG TERM FOCUS
As a private company, we have concentrated on the long term, and this has served us well. As a public company, we will do the same. In our opinion, outside pressures too often tempt companies to sacrifice long-term opportunities to meet quarterly market expectations. Sometimes this pressure has caused companies to manipulate financial results in order to "make their quarter." In Warren Buffett's words, "We won't 'smooth' quarterly or annual results: If earnings figures are lumpy when they reach headquarters, they will be lumpy when they reach you."
If opportunities arise that might cause us to sacrifice short term results but are in the best long term interest of our shareholders, we will take those opportunities. We will have the fortitude to do this. We would request that our shareholders take the long term view.
Many companies are under pressure to keep their earnings in line with analysts' forecasts. Therefore, they often accept smaller, but predictable, earnings rather than larger and more unpredictable returns. Sergey and I feel this is harmful, and we intend to steer in the opposite direction.
(1) Much of this was inspired by Warren Buffett's essays in his annual reports and his "An Owner's Manual" to Berkshire Hathaway shareholders.
Google has had adequate cash to fund our business and has generated additional cash through operations. This gives us the flexibility to weather costs, benefit from opportunities and optimize our long term earnings. For example, in our ads system we make many improvements that affect revenue in both directions. These are in areas like end user relevance and satisfaction, advertiser satisfaction, partner needs and targeting technology. We release improvements immediately rather than delaying them, even though delay might give "smoother" financial results. You have our commitment to execute quickly to achieve long term value rather than making the quarters more predictable.
We will make decisions on the business fundamentals, not accounting considerations, and always with the long term welfare of our company and shareholders in mind.
Although we may discuss long term trends in our business, we do not plan to give earnings guidance in the traditional sense. We are not able to predict our business within a narrow range for each quarter. We recognize that our duty is to advance our shareholders' interests, and we believe that artificially creating short term target numbers serves our shareholders poorly. We would prefer not to be asked to make such predictions, and if asked we will respectfully decline. A management team distracted by a series of short term targets is as pointless as a dieter stepping on a scale every half hour.
RISK VS REWARD IN THE LONG RUN
Our business environment changes rapidly and needs long term investment. We will not hesitate to place major bets on promising new opportunities.
We will not shy away from high-risk, high-reward projects because of short term earnings pressure. Some of our past bets have gone extraordinarily well, and others have not. Because we recognize the pursuit of such projects as the key to our long term success, we will continue to seek them out. For example, we would fund projects that have a 10% chance of earning a billion dollars over the long term. Do not be surprised if we place smaller bets in areas that seem very speculative or even strange. As the ratio of reward to risk increases, we will accept projects further outside our normal areas, especially when the initial investment is small.
We encourage our employees, in addition to their regular projects, to spend 20% of their time working on what they think will most benefit Google. This empowers them to be more creative and innovative. Many of our significant advances have happened in this manner. For example, AdSense for content and Google News were both prototyped in "20% time." Most risky projects fizzle, often teaching us something. Others succeed and become attractive businesses.
We may have quarter-to-quarter volatility as we realize losses on some new projects and gains on others. If we accept this, we can all maximize value in the long term. Even though we are excited about risky projects, we expect to devote the vast majority of our resources to our main businesses, especially since most people naturally gravitate toward incremental improvements.
EXECUTIVE ROLES
We run Google as a triumvirate. Sergey and I have worked closely together for the last eight years, five at Google. Eric, our CEO, joined Google three years ago. The three of us run the company collaboratively with Sergey and me as Presidents. The structure is unconventional, but we have worked successfully in this way.
To facilitate timely decisions, Eric, Sergey and I meet daily to update each other on the business and to focus our collaborative thinking on the most important and immediate issues. Decisions are often made by one of us, with the others being briefed later. This works because we have tremendous trust and respect for each other and we generally think alike. Because of our intense long term working relationship, we can often predict differences of opinion among the three of us. We know that when we disagree, the correct decision is far from obvious. For important decisions, we discuss the issue with the larger team. Eric, Sergey and I run the company without any significant internal conflict, but with healthy debate. As different topics come up, we often delegate decision-making responsibility to one of us.
We hired Eric as a more experienced complement to Sergey and me to help us run the business. Eric was CTO of Sun Microsystems. He was also CEO of Novell and has a Ph.D. in computer science, a very unusual and important combination for Google given our scientific and technical culture. This partnership among the three of us has worked very well and we expect it to continue. The shared judgments and extra energy available from all three of us has significantly benefited Google.
Eric has the legal responsibilities of the CEO and focuses on management of our vice presidents and the sales organization. Sergey focuses on engineering and business deals. I focus on engineering and product management. All three of us devote considerable time to overall management of the company and other fluctuating needs. We are extremely fortunate to have talented management that has grown the company to where it is today--they operate the company and deserve the credit.
CORPORATE STRUCTURE
We are creating a corporate structure that is designed for stability over long time horizons. By investing in Google, you are placing an unusual long-term bet on the team, especially Sergey and me, and on our innovative approach.
We want Google to become an important and significant institution. That takes time, stability and independence. We bridge the media and technology industries, both of which have experienced considerable consolidation and attempted hostile takeovers.
In the transition to public ownership, we have set up a corporate structure that will make it harder for outside parties to take over or influence Google. This structure will also make it easier for our management team to follow the long term, innovative approach emphasized earlier. This structure, called a dual class voting structure, is described elsewhere in this prospectus.
The main effect of this structure is likely to leave our team, especially Sergey and me, with significant control over the company's decisions and fate, as Google shares change hands. New investors will fully share in Google's long term growth but will have less influence over its strategic decisions than they would at most public companies.
While this structure is unusual for technology companies, it is common in the media business and has had a profound importance there. The New York Times Company, the Washington Post Company and Dow Jones, the publisher of The Wall Street Journal, all have similar dual class ownership structures. Media observers frequently point out that dual class ownership has allowed these companies to concentrate on their core, long-term interest in serious news coverage, despite fluctuations in quarterly results. The Berkshire Hathaway company has applied the same structure, with similar beneficial effects. From the point of view of long-term success in advancing a company's core values, the structure has clearly been an advantage.
Academic studies have shown that from a purely economic point of view, dual class structures have not harmed the share price of companies. The shares of each of our classes have identical economic rights and differ only as to voting rights.
Google has prospered as a private company. As a public company, we believe a dual class voting structure will enable us to retain many of the positive aspects of being private. We understand some investors do not favor dual class structures. We have considered this point of view carefully, and we have not made our decision lightly. We are convinced that everyone associated with Google--including new investors--will benefit from this structure.
To help us govern, we have recently expanded our Board of Directors to include three additional members. John Hennessy is the President of Stanford and has a Doctoral degree in computer science. Art Levinson is CEO of Genentech and has a Ph.D. in biochemistry. Paul Otellini is President and COO of Intel. We could not be more excited about the caliber and experience of these directors.
We have a world class management team impassioned by Google's mission and responsible for Google's success. We believe the stability afforded by the dual-class structure will enable us to retain our unique culture and continue to attract and retain talented people who are Google's life blood. Our colleagues will be able to trust that they themselves and their labors of hard work, love and creativity will be well cared for by a company focused on stability and the long term.
As an investor, you are placing a potentially risky long term bet on the team, especially Sergey and me. The two of us, Eric and the rest of the management team recognize that our individual and collective interests are deeply aligned with those of the new investors who choose to support Google. Sergey and I are committed to Google for the long term. The broader Google team has also demonstrated an extraordinary commitment to our long term success. With continued hard work and good fortune, this commitment will last and flourish.
When Sergey and I founded Google, we hoped, but did not expect, it would reach its current size and influence. Our intense and enduring interest was to objectively help people find information efficiently. We also believed that searching and organizing all the world's information was an unusually important task that should be carried out by a company that is trustworthy and interested in the public good. We believe a well functioning society should have abundant, free and unbiased access to high quality information. Google therefore has a responsibility to the world. The dual-class structure helps ensure that this responsibility is met. We believe that fulfilling this responsibility will deliver increased value to our shareholders.
BECOMING A PUBLIC COMPANY
Google should go public soon.
We assumed when founding Google that if things went well, we would likely go public some day. But we were always open to staying private, and a number of developments reduced the pressure to change. We soon were generating cash, removing one important reason why many companies go public. Requirements for public companies became more significant in the wake of recent corporate scandals and the resulting passage of the Sarbanes-Oxley Act. We made business progress we were happy with. Our investors were patient and willing to stay with Google. We have been able to meet our business needs with our current level of cash.
A number of factors weighed on the other side of the debate. Our growth has reduced some of the advantages of private ownership. By law, certain private companies must report as if they were public companies. The deadline imposed by this requirement accelerated our decision. As a smaller private company, Google kept business information closely held, and we believe this helped us against competitors. But, as we grow larger, information becomes more widely known. As a public company, we will of course provide you with all information required by law, and we will also do our best to explain our actions. But we will not unnecessarily disclose all of our strengths, strategies and intentions. We have transferred significant ownership of Google to employees in return for their efforts in building the business. And, we benefited greatly by selling $26 million of stock to our early investors before we were profitable. Thus, employee and investor liquidity were significant factors.
We have demonstrated a proven business model and have designed a corporate structure that will make it easier to become a public company. A large, diverse, enthusiastic shareholder base will strengthen the company and benefit from our continued success. A larger cash balance will provide Google with flexibility and protection against adversity. All in all, going public now is the right decision.
IPO PRICING AND ALLOCATION
Informed investors willing to pay the IPO price should be able to buy as many shares as they want, within reason, in the IPO, as on the stock market.
It is important to us to have a fair process for our IPO that is inclusive of both small and large investors. It is also crucial that we achieve a good outcome for Google and its current shareholders. This has led us to pursue an auction-based IPO for our entire offering. Our goal is to have a share price that reflects a fair market valuation of Google and that moves rationally based on changes in our business and the stock market. (The auction process is discussed in more detail elsewhere in this prospectus.)
Many companies have suffered from unreasonable speculation, small initial share float, and boom-bust cycles that hurt them and their investors in the long run. We believe that an auction-based IPO will minimize these problems.
An auction is an unusual process for an IPO in the United States. Our experience with auction-based advertising systems has been surprisingly helpful in the auction design process for the IPO. As in the stock market, if people try to buy more stock than is available, the price will go up. And of course, the price will go down if there aren't enough buyers. This is a simplification, but it captures the basic issues. Our goal is to have an efficient market price--a rational price set by informed buyers and sellers--for our shares at the IPO and afterward. Our goal is to achieve a relatively stable price in the days following the IPO and that buyers and sellers receive a fair price at the IPO.
We are working to create a sufficient supply of shares to meet investor demand at IPO time and after. We are encouraging current shareholders to consider selling some of their shares as part of the offering. These shares will supplement the shares the company sells to provide more supply for investors and hopefully provide a more stable fair price. Sergey and I, among others, are currently planning to sell a fraction of our shares in the IPO. The more shares current shareholders sell, the more likely it is that they believe the price is not unfairly low. The supply of shares available will likely have an effect on the clearing price of the auction. Since the number of shares being sold is likely to be larger at a high price and smaller at a lower price, investors will likely want to consider the scope of current shareholder participation in the IPO. We may communicate from time to time that we would be sellers rather than buyers.
We would like you to invest for the long term, and to do so only at or below what you determine to be a fair price. We encourage investors not to invest in Google at IPO or for some time after, if they believe the price is not sustainable over the long term.
We intend to take steps to help ensure shareholders are well informed. We encourage you to read this prospectus. We think that short term speculation without paying attention to price is likely to lose you money, especially with our auction structure.
GOOGLERS
Our employees, who have named themselves Googlers, are everything. Google is organized around the ability to attract and leverage the talent of exceptional technologists and business people. We have been lucky to recruit many creative, principled and hard working stars. We hope to recruit many more in the future. We will reward and treat them well.
We provide many unusual benefits for our employees, including meals free of charge, doctors and washing machines. We are careful to consider the long term advantages to the company of these benefits. Expect us to add benefits rather than pare them down over time. We believe it is easy to be penny wise and pound foolish with respect to benefits that can save employees considerable time and improve their health and productivity.
The significant employee ownership of Google has made us what we are today. Because of our employee talent, Google is doing exciting work in nearly every area of computer science. We are in a very competitive industry where the quality of our product is paramount. Talented people are attracted to Google because we empower them to change the world; Google has large computational resources and distribution that enables individuals to make a difference. Our main benefit is a workplace with important projects, where employees can contribute and grow. We are focused on providing an environment where talented, hard working people are rewarded for their contributions to Google and for making the world a better place.
DON'T BE EVIL
Don't be evil. We believe strongly that in the long term, we will be better served--as shareholders and in all other ways--by a company that does good things for the world even if we forgo some short term gains. This is an important aspect of our culture and is broadly shared within the company.
Google users trust our systems to help them with important decisions: medical, financial and many others. Our search results are the best we know how to produce. They are unbiased and objective, and we do not accept payment for them or for inclusion or more frequent updating. We also display advertising, which we work hard to make relevant, and we label it clearly. This is similar to a newspaper, where the advertisements are clear and the articles are not influenced by the advertisers' payments. We believe it is important for everyone to have access to the best information and research, not only to the information people pay for you to see.
MAKING THE WORLD A BETTER PLACE
We aspire to make Google an institution that makes the world a better place. With our products, Google connects people and information all around the world for free. We are adding other powerful services such as Gmail that provides an efficient one gigabyte Gmail account for free. By releasing services for free, we hope to help bridge the digital divide. AdWords connects users and advertisers efficiently, helping both. AdSense helps fund a huge variety of online web sites and enables authors who could not otherwise publish. Last year we created Google Grants--a growing program in which hundreds of non-profits addressing issues, including the environment, poverty and human rights, receive free advertising. And now, we are in the process of establishing the Google Foundation. We intend to contribute significant resources to the foundation, including employee time and approximately 1% of Google's equity and profits in some form. We hope someday this institution may eclipse Google itself in terms of overall world impact by ambitiously applying innovation and significant resources to the largest of the world's problems.
SUMMARY AND CONCLUSION
Google is not a conventional company. Eric, Sergey and I intend to operate Google differently, applying the values it has developed as a private company to its future as a public company. Our mission and business description are available in the rest of the prospectus; we encourage you to carefully read this information. We will optimize for the long term rather than trying to produce smooth earnings for each quarter. We will support selected high-risk, high-reward projects and manage our portfolio of projects. We will run the company collaboratively with Eric, our CEO, as a team of three. We are conscious of our duty as fiduciaries for our shareholders, and we will fulfill those responsibilities. We will continue to attract creative, committed new employees, and we will welcome support from new shareholders. We will live up to our "don't be evil" principle by keeping user trust and not accepting payment for search results. We have a dual-class structure that is biased toward stability and independence and that requires investors to bet on the team, especially Sergey and me.
In this letter we have explained our thinking on why Google is better off going public. We have talked about our IPO auction method and our desire for stability and access for all investors. We have discussed our goal to have investors who determine a rational price and invest for the long term only if they can buy at that price. Finally, we have discussed our desire to create an ideal working environment that will ultimately drive the success of Google by retaining and attracting talented Googlers.
We have tried hard to anticipate your questions. It will be difficult for us to respond to them given legal constraints during our offering process. We look forward to a long and hopefully prosperous relationship with you, our new investors. We wrote this letter to help you understand our company.
We have a strong commitment to our users worldwide, their communities, the web sites in our network, our advertisers, our investors, and of course our employees. Sergey and I, and the team will do our best to make Google a long term success and the world a better place.
Larry Page
Sergey Brin
Copyright © 2004, Newsday, Inc.
Wednesday, April 28, 2004
Google Alert...More personalisation of search results.... Edit Search
Google Alert - Edit Search
April 28, 2004
SightPoint Personalized Search Results
SightPoint automatically learns which search results are most relevant to you. Your new search results are rated based on results you have clicked on in the past. These relevance ratings, out of five stars, become more accurate over time.
Using SightPoint
SightPoint is an opt-in feature that is switched on using the checkbox. Once switched on, SightPoint works automatically as you click on results in HTML emails, the online browser and RSS feeds.
April 28, 2004
SightPoint Personalized Search Results
SightPoint automatically learns which search results are most relevant to you. Your new search results are rated based on results you have clicked on in the past. These relevance ratings, out of five stars, become more accurate over time.
Using SightPoint
SightPoint is an opt-in feature that is switched on using the checkbox. Once switched on, SightPoint works automatically as you click on results in HTML emails, the online browser and RSS feeds.
United States Patent: 6,725,259
United States Patent: 6,725,259: "United States Patent 6,725,259
Bharat April 20, 2004
Ranking search results by reranking the results based on local inter-connectivity
Abstract
A search engine for searching a corpus improves the relevancy of the results by refining a standard relevancy score based on the interconnectivity of the initially returned set of documents. The search engine obtains an initial set of relevant documents by matching a user's search terms to an index of a corpus. A re-ranking component in the search engine then refines the initially returned document rankings so that documents that are frequently cited in the initial set of relevant documents are preferred over documents that are less frequently cited within the initial set.
Inventors: Bharat; Krishna (Santa Clara, CA)
Assignee: Google Inc. (Mountain View, CA) "
Bharat April 20, 2004
Ranking search results by reranking the results based on local inter-connectivity
Abstract
A search engine for searching a corpus improves the relevancy of the results by refining a standard relevancy score based on the interconnectivity of the initially returned set of documents. The search engine obtains an initial set of relevant documents by matching a user's search terms to an index of a corpus. A re-ranking component in the search engine then refines the initially returned document rankings so that documents that are frequently cited in the initial set of relevant documents are preferred over documents that are less frequently cited within the initial set.
Inventors: Bharat; Krishna (Santa Clara, CA)
Assignee: Google Inc. (Mountain View, CA) "
AXA challenges Google's business model - Breaking - theage.com.au
AXA challenges Google's business model - Breaking - theage.com.au: "AXA, the world's No.3 insurer, is taking Google Inc to court next month in the latest trademark challenge to threaten the heart of Google's business model - advertising.
Google is already embroiled in litigation on both sides of the Atlantic over claims that its pay-for-placement service, Adwords, lets clients hijack their competitors' trademarks...
A source close to the insurer said the lawsuit was filed after Google sold AXA's registered trademarks as advertising search terms.
Internet users who typed "AXA" or "Direct Assurance" into the search engine got ads for rival insurers alongside ordinary search results, the source said. A Google search in Paris last Thursday of "AXA" reaped mostly AXA sites and one UK financial planning site...
The lawsuits have arisen despite Google's stated policy that it will generally remove ads triggered by registered trademarks when notified by their legitimate owners.
Google is about to relax that policy. Earlier this month, it announced plans to allow the sale of any US or Canadian trademark as a search term. Trademarks in the text of ads would remain restricted.
The shift would give Google a more aggressive stance on trademarks than its archrival Yahoo Inc, whose paid search service, Overture, pledges to vet the use of brands as search terms."
Google is already embroiled in litigation on both sides of the Atlantic over claims that its pay-for-placement service, Adwords, lets clients hijack their competitors' trademarks...
A source close to the insurer said the lawsuit was filed after Google sold AXA's registered trademarks as advertising search terms.
Internet users who typed "AXA" or "Direct Assurance" into the search engine got ads for rival insurers alongside ordinary search results, the source said. A Google search in Paris last Thursday of "AXA" reaped mostly AXA sites and one UK financial planning site...
The lawsuits have arisen despite Google's stated policy that it will generally remove ads triggered by registered trademarks when notified by their legitimate owners.
Google is about to relax that policy. Earlier this month, it announced plans to allow the sale of any US or Canadian trademark as a search term. Trademarks in the text of ads would remain restricted.
The shift would give Google a more aggressive stance on trademarks than its archrival Yahoo Inc, whose paid search service, Overture, pledges to vet the use of brands as search terms."
Monday, April 26, 2004
Gmail: the Next Gator?
Gmail: the Next Gator?: "E-mail marketers may be surprised to learn what happens when recipients see their messages in Google's soon-to-debut, ad-supported e-mail application. Messages contain ads for competitors' products, ClickZ News tests revealed...
Example: a Travelocity mailing that triggered ads from Hotwire, Cheapfares.com and TravelFleaMarket.com. All are Travelocity competitors. Similar situations occur with publishers' e-mail newsletters, which are often ad-supported; and transactional e-mail, such as online bill statements or order confirmations...
It's analogous to McDonald's paying someone to wear a McDonald's-branded sandwich board in front of a Burger King. In the interactive arena, it's akin to the kind of competitive pop-up ads that have generated controversy (and legal action) for Claria.
"Google targets ads based on the text of a message," said a Google spokesperson. "If a message contains information about a service or product, Gmail may display a competitor's ad. This is a benefit to users because it provides additional relevant information that enables them to make informed decisions."
If Gmail is released more widely in its current form, the competitive environment is certain to intensify. Google recently shifted its trademark policy to allow advertisers to bid on trademarked keywords. Hypothetically, a message from Banana Republic (for example) could, simply because of its subject line, trigger ads from J. Crew, Eddie Bauer and the like."
Example: a Travelocity mailing that triggered ads from Hotwire, Cheapfares.com and TravelFleaMarket.com. All are Travelocity competitors. Similar situations occur with publishers' e-mail newsletters, which are often ad-supported; and transactional e-mail, such as online bill statements or order confirmations...
It's analogous to McDonald's paying someone to wear a McDonald's-branded sandwich board in front of a Burger King. In the interactive arena, it's akin to the kind of competitive pop-up ads that have generated controversy (and legal action) for Claria.
"Google targets ads based on the text of a message," said a Google spokesperson. "If a message contains information about a service or product, Gmail may display a competitor's ad. This is a benefit to users because it provides additional relevant information that enables them to make informed decisions."
If Gmail is released more widely in its current form, the competitive environment is certain to intensify. Google recently shifted its trademark policy to allow advertisers to bid on trademarked keywords. Hypothetically, a message from Banana Republic (for example) could, simply because of its subject line, trigger ads from J. Crew, Eddie Bauer and the like."
Gmail Terms of Use
IP rights & privacy concerns: Gmail Terms of Use:
"Your Intellectual Property Rights. Google does not claim any ownership in any of the content, including any text, data, information, images, photographs, music, sound, video, or other material, that you upload, transmit or store in your Gmail account. We will not use any of your content for any purpose except to provide you with the Service. "
"Advertisements. As consideration for using the Service, you agree and understand that Google will display ads and other information adjacent to and related to the content of your email. Gmail serves relevant ads using a completely automated process that enables Google to effectively target dynamically changing content, such as email. No human will read the content of your email in order to target such advertisements or other information without your consent, and no email content or other personally identifiable information will be provided to advertisers as part of the Service."
"Google welcomes feedback on this document and policy as the Gmail service is currently in an early testing stage. As Gmail evolves over the next several months, we expect to incorporate improvements in response to community feedback. Send comments to privacymatters@google.com"
"How we deliver targeted content to you.
We never share your personally identifying information with any advertiser as part of this service, unless you specifically ask us to do so. When you are logged into your Gmail account, Google will display targeted ads and other relevant information based on the content of the email displayed. In a completely automated process, computers process the text in a message and match it to ads or related information in Google's extensive database. No human reads your mail to target ads or other information without your consent.
Advertisers receive a record of the total number of impressions and clicks for each ad. They do not receive any personal information about the person who viewed the ad. If you click on an ad, Google will send a referring URL to the advertiser's site identifying that you are visiting from Gmail. Google does not send personally identifying information to advertisers with the referring URL. Once you are on the advertiser's site, however, the advertiser may collect personal information about you. Google does not control or take responsibility for the privacy policies of other sites.
Google may send you information related to your Gmail account or other Google services. Because we believe such information is important, you will not be given the opportunity to opt-out of receiving them."
"Your Intellectual Property Rights. Google does not claim any ownership in any of the content, including any text, data, information, images, photographs, music, sound, video, or other material, that you upload, transmit or store in your Gmail account. We will not use any of your content for any purpose except to provide you with the Service. "
"Advertisements. As consideration for using the Service, you agree and understand that Google will display ads and other information adjacent to and related to the content of your email. Gmail serves relevant ads using a completely automated process that enables Google to effectively target dynamically changing content, such as email. No human will read the content of your email in order to target such advertisements or other information without your consent, and no email content or other personally identifiable information will be provided to advertisers as part of the Service."
"Google welcomes feedback on this document and policy as the Gmail service is currently in an early testing stage. As Gmail evolves over the next several months, we expect to incorporate improvements in response to community feedback. Send comments to privacymatters@google.com"
"How we deliver targeted content to you.
We never share your personally identifying information with any advertiser as part of this service, unless you specifically ask us to do so. When you are logged into your Gmail account, Google will display targeted ads and other relevant information based on the content of the email displayed. In a completely automated process, computers process the text in a message and match it to ads or related information in Google's extensive database. No human reads your mail to target ads or other information without your consent.
Advertisers receive a record of the total number of impressions and clicks for each ad. They do not receive any personal information about the person who viewed the ad. If you click on an ad, Google will send a referring URL to the advertiser's site identifying that you are visiting from Gmail. Google does not send personally identifying information to advertisers with the referring URL. Once you are on the advertiser's site, however, the advertiser may collect personal information about you. Google does not control or take responsibility for the privacy policies of other sites.
Google may send you information related to your Gmail account or other Google services. Because we believe such information is important, you will not be given the opportunity to opt-out of receiving them."
The Observer | Business | The Networker: What can't you find on Google? Vital statistics
The Observer | Business | The Networker: What can't you find on Google? Vital statistics: "The computing engine that powers Google is the largest cluster of Linux servers in the history of the world...
Wall Street - with its beady eye on the forthcoming IPO - wants to know what Google does (and more importantly, what it plans to do next). Computer scientists, in contrast, want to know how Google does it...
it seems that the overall aim is to understate every aspect of Google's technology and technical performance by several orders of magnitude.
How do we know this? Mainly because of internal inconsistencies in the data provided by Google employees. One university presentation, for example, claimed that Google handled 150 million queries a day, and 1,000 per second at peak times. This prompted Simpson Garfinkel of MIT's Technology Review to do some simple calculations. If the system is handling a peak load of 1,000 queries per second, he reasoned, that translates to a peak rate of 86.4 million queries per day - or perhaps 40 million queries per day if you assume that the system spends only half its time at peak capacity. 'No matter how you crank the math', he concluded, 'Google's statistics are not self-consistent'...
But what it all comes down to is this: Google has far more computing power at its disposal than it is letting on. In fact, there have been rumours in the business for months that the Google cluster actually has 100,000 servers - which if true means that the company's technical competence beggars belief.
Now the interesting question raised by all this is: why the reticence? Most companies lose no opportunity to brag about their technology. (Think of all those Oracle ads.) Is this an example of Google behaving ultra-responsibly - being careful not to hype its prospects prior to an IPO? Or is it a sign of a deeper commercial strategy? The latter is what Garfinkel suspects. 'After all,' 'he says, 'if Google publicised how many pages it has indexed and how many computers it has in its data centres around the world, search competitors such as Yahoo!, Teoma, and Mooter would know how much capital they had to raise in order to have a hope of displacing the king at the top of the hill.' If truth is the first casualty of war, openness is the first casualty of going public."
Wall Street - with its beady eye on the forthcoming IPO - wants to know what Google does (and more importantly, what it plans to do next). Computer scientists, in contrast, want to know how Google does it...
it seems that the overall aim is to understate every aspect of Google's technology and technical performance by several orders of magnitude.
How do we know this? Mainly because of internal inconsistencies in the data provided by Google employees. One university presentation, for example, claimed that Google handled 150 million queries a day, and 1,000 per second at peak times. This prompted Simpson Garfinkel of MIT's Technology Review to do some simple calculations. If the system is handling a peak load of 1,000 queries per second, he reasoned, that translates to a peak rate of 86.4 million queries per day - or perhaps 40 million queries per day if you assume that the system spends only half its time at peak capacity. 'No matter how you crank the math', he concluded, 'Google's statistics are not self-consistent'...
But what it all comes down to is this: Google has far more computing power at its disposal than it is letting on. In fact, there have been rumours in the business for months that the Google cluster actually has 100,000 servers - which if true means that the company's technical competence beggars belief.
Now the interesting question raised by all this is: why the reticence? Most companies lose no opportunity to brag about their technology. (Think of all those Oracle ads.) Is this an example of Google behaving ultra-responsibly - being careful not to hype its prospects prior to an IPO? Or is it a sign of a deeper commercial strategy? The latter is what Garfinkel suspects. 'After all,' 'he says, 'if Google publicised how many pages it has indexed and how many computers it has in its data centres around the world, search competitors such as Yahoo!, Teoma, and Mooter would know how much capital they had to raise in order to have a hope of displacing the king at the top of the hill.' If truth is the first casualty of war, openness is the first casualty of going public."
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