Defining Google

What Powers The Silicon Valley Gem And Where It May Be Going Next

Has there ever been a brand name like Google? Non-existent six years ago, it's now a part of the global language, as in, "I Googled this," or "I Googled that," or "I Googled you." To Google, a verb, is to get an instant answer by using the company's super-computer to look up anything on the Internet.

What began as a school project is now worth about as much as Ford and General Motors combined, thanks to a stock that has roughly doubled in price since the company went public last August.

And for the first time since then, Google has opened its doors, to let "60 Minutes" Google them. Lesley Stahl reports.

Google co-founder Sergey Brin showed us an electronic globe displaying the mountains of Google searches happening around the world at any given moment. Two-hundred million times a day, someone, somewhere uses Google to search for something on the Internet: an old boyfriend; a new boyfriend; a new gadget; or maybe a used car. Some searches are serious, others, frivolous. Type in Paris Hilton, and Google's computers - roughly 100,000 of them - search the entire Internet for every mention of her (6.5 million hits) and every picture (6,500 images) in half a second.

Looking at the company's Silicon Valley headquarters, dubbed the "Googleplex," it's hard to imagine that just a few years ago the company basically consisted of the Russian-born Brin and co-founder Larry Page. Back then they worked in a converted garage.

"Our boardroom table was also our ping pong table," recalls Brin. "So, it had the net and everything." He describes the dress code as, "disheveled students."

A lot of Google workers still look like disheveled students. Inside, the Googleplex feels more like a college dorm than a corporate office, with bikes in the hallways, dogs under the desks. And there's a strong spirit of play; besides all the ping-pong, there's a volleyball game every day at noon.

Brin explains, "This is really where we spend, you know, the overwhelming majority of our time. And so in order to have a good lifestyle, we had to have a good lifestyle at work. Which meant that, you know, you do have lots of sports and things. We have our ski trip."

Yes, there's a ski vacation for the whole company, whose ranks are approaching 3,000. That's enough people to take up a whole mountain, but, then again, they can afford it.

Google can afford a lot of things these days. And so can its employees, many of whom had stock options. About 1,000 of them became millionaires when the stock went public, and Brin and Page, who are 31 and 32 years old respectively, are worth about $6 billion each.

But they're doing everything they can to keep the money from becoming a distraction. Brin treated the day that the company went public as just another workday. "Everybody was focused on their projects," he says. "One of the engineers I talked to, and I asked him what his plans were and he said he was gonna throw out all of his socks and buy new ones so they would all match - they'd all be the same kind. So that was the kind of extravagance we're seeing here.

Brin says he splurged on a new T-shirt. And he still drives a little Japanese car.

"If anybody got a Porsche or a Ferrari right now at Google, they'd probably be drummed out of the company," observes John Battelle, an author and entrepreneur who has been following Silicon Valley companies for 20 years.

He says, "Google has a brand image to maintain. And their image is they're all about innovation and they're all about the Internet, and they're all about trust. They're not about selling out. They're not about getting rich quick. So you've got a culture like that; I think if anyone were to buy, you know, a new Mercedes convertible and drive around with the stereo blaring, and miss work a couple days because they're rich now, that would not be acceptable behavior at Google.

"But trust me," he adds. "There's a Mercedes convertible in every one of their heads. There is. And it will…come out. Over time, it will come out."

As if to prove they're not being distracted by the money, Google has been on a tear in the months since going public, with what seems to be a new product announced every week: Google print, to make millions of books searchable online; Google desktop, which lets you search your own computer's hard drive; and another new addition called Keyhole.

Google executive Marissa Mayer showed us how Keyhole can find an aerial photo of almost any address.

And more new ideas are being hatched. Google's style is to race them out in "beta" form - that means "not finished yet" - and let users play with them for free and make suggestions. Actually, almost everything on Google's home page is free. No one pays to search.

"People always ask us how Google makes money," Mayer says, as she does a Google search for flowers. The left side of the screen displays the top 10 Web sites Google found related to flowers. Appearing on the right side are what Google calls sponsored links. This, she explains, is where the money comes from. When someone clicks on a sponsored link, say in this case it's an ad for FTD flowers, the company pays Google. It's a revolutionary idea: advertising to an audience of one, and one who's already looking for what you want to sell.

The rates are so low - typically between 5 cents and 50 cents per click - that almost anyone can afford to advertise.

Eric Schmidt, Google's 49-year-old CEO who was hired in 2001 to be the resident grown-up, says that the pool of potential advertisers is almost limitless: "There's a lot of evidence that the companies of which Google is a member are enabling a new kind of commerce, between very small communities, people who can find each other, for whom the traditional advertising mechanisms, whether it's television advertising or radio, do not serve.

"An example: a friend of mine named Peter puts his credit card in and he give us $50 [for a sponsored link]. And his wife knits a particular kind of rug. I said, 'Call me back, give me an update.' So Peter calls back and says, 'We're ecstatic. For $50, we got all these customers.' And I said, 'Well, how many did you get?' And he said 100. And I thought, 'Wow, you know, that's great. What a wonderful outcome.' And he said, 'There's a wife does one rug per year.' So that's all the revenue we're ever gonna get from Peter."

But there are millions of Peters out there, and billions in potential ad revenue. The business world is just beginning to grasp the potential.

Microsoft founder Bill Gates has admitted that, "Google kicked our butt" in Internet search. Gates doesn't like to have his butt kicked. So he's just launched a prototype of a Microsoft search engine.

Schmidt says Google isn't feeling the pressure. He thinks, "It's perfectly possible that the current competitors can all compete and coexist actually quite well, at least for a few years. So I disagree with the people who say that this is a zero-sum game."

It's Google's strategy to downplay the threat from Gates, but that doesn't mean they're not fighting back. The company's new product, a free piece of software called Google desktop, organizes all the files on your computer. That's one of the things that Microsoft Windows does now.

According to Battelle, "Google desktop is a direct challenge at Microsoft. There's no question about it. Google is going after Microsoft, but they would never tell you that they're doing that, because they don't want to paint a huge target on their back, right?"

And so, the war is on, with Google betting that its troops can innovate faster than Microsoft's.

"Everyone assumes that we're busy competing in the last war when in fact we're going to invent something new," says Schmidt. "That's how Google works. Whatever product idea I have is from the old times. And they [Google employees] say, 'Oh, Eric, what a stupid idea. Why don't you try this new idea?' Which I haven't thought about. That's the genius of Google."

Where did that genius come from in the first place? And where is Google going?

Brin and Page still share one tiny office at company headquarters. That's the way they've always worked. And, just as when they were Google's only employees, they still make every major decision together, and personally approve the hiring of nearly every new employee.

Both men come from brainy families. Page's dad is a computer science professor, and Brin's is a math professor. They even look a little bit alike. But in their personalities, they're opposite: Page is shy, almost introverted; Brin more outgoing, something of a showman. He's even taken circus classes and flown on a trapeze.

What Brin and Page really excel at is writing computer code. They met as Ph.D. students at Stanford University, where both were trying to figure out how to make information easier to find on the Internet.

They realized that a lot of search engines available at the time inundated you with a bewildering, disorganized list of every Web site that contained the words you were searching for.

Brin and Page's breakthrough was a series of algorithms - software code - that created a ranking system by relevance for the Internet. They installed their software on the school's computers.

Then they created a test search engine, which they named "Google," a play on the word googol, a math term meaning 1 followed by 100 zeros.

Brin recalls, "We just let a few of our friends know about it so they would go to that Web site, or the test search engine, try it out. And people started to use it more and more and word spread. You know, it really started to grow. And eventually we ran out of computers."

They started building their own computers, and moved into their "world headquarters" - a garage.

"We were very conservative," Brin says. "We didn't hire very many people. You know, we never ran Super Bowl ads, like many other dot-coms."

When the Internet boom went bust in late 2000, says Battelle, Google was one of the few survivors: "Google was this odd company; it seemed like the Internet bust never happened. The lava lamps were going, they had a chef, they had parties, everyone was happy, everyone seemed to be enjoying their work. Now [for] most of the Silicon Valley, the opposite was true. It was smoldering wreckage. So they hired some of the smartest, best engineers they could find, during a time when they were so thankful to have a job."

There was something else different about Google: the company motto, "Do no evil."

"We have tried to boil it down at some point to a code of conduct, so to speak," Brin says. "How do we make all our decisions. For example, we don't mix our ads with our search results. We always label the advertising clearly down the side of the page."

To this day, Google has still never run a TV commercial. Their popularity has spread literally by word of mouth around the world, as people everywhere search for everything under the sun.

That includes the term "60 Minutes," for which Google's computers return 19 million search results in one-fifth of a second. But at first glance, the top results are all related to "60 Minutes" stories that have created some kind of controversy. And that's a big problem with Google: Its ranking system tends to put negative events or statements at the top of the list.

And if you Google a person, Battelle says, the picture you'll get is, "an entirely skewed one, in my opinion. When anybody puts in a name, and that person has had a terrible event... that will become who she is in the world."

"As hard as we try," Schmidt says, "we have not yet understood how to make value and moral judgments about information. And we can't distinguish between hugely popular accurate information and hugely popular dated information."

That's not Google's only challenge. The main thing now is managing the company's explosive success.

"They're expanding so quickly that they might just blow up, that the wheels just might come off," Battelle says. "That it's very difficult to manage a company that's growing as fast as Google."

Schmidt calls it their "internal enemy," and says it's a daily worry.

For example, Google is hiring about 25 new people every week, and receives more than 1,000 resumes a day. But they're determined to stick to their rigorous screening process.

Google uses aptitude tests, which it has even placed in technical magazines, hoping some really big brains would tackle the hardest problems. Score well on the test, and you might get a job interview. And then another and another. One recent hire had 14 interviews before getting the job - and that was in the public relations department.

Once people do get hired, Google does everything possible to keep them happy.

Schmidt says, "One day we're sitting in my staff meeting, and Larry said, 'We're not having enough parties.' And I said to the two of them, 'We have more parties than any other company I've ever seen.' And they said, 'We have to have another party.'"

At the Googleplex, it looks as though every day's a party. They have a fantastic cafeteria, where the food - Chinese, Mexican, deli food, Kosher food, any kind of food - is all free. Battelle notes, "The company makes money by having that free lunch, because people stay on campus, they don't go out, they don't waste time. They often get the food and go back to their desk."

And that's crucial: as well-fed and casual as they may look, the folks at Google are intense, burn-the-midnight-flourescent workaholics, all trying to come up with Google's "next big thing."

Google engineer Alan Eustace explains, "One of the ideas that we're working on is machine translation. We strongly believe that there's enough data on the Web and in the world right now to allow us to automatically translate from one language to another."

Another goal is to make TV shows and video clips searchable online. Google has teams working on all sorts of change-the-world ideas.

"I think it could be summed up in, 'search will no longer live only on your PC,'" says Battelle, when asked to speculate on what the next big breakthrough might be. Google is already moving that way, testing a new product that allows people to send short text messages from their cellphones and get an immediate reply to the search.

This isn't just an idea; an early version is already out, and anyone with a text-messaging cellphone can play with it for free.

And if that's not science-fiction enough, Battelle describes another advance potentially on the not-so-distant horizon. Users would, he says, "have a device which is in your pocket, which looks like a phone, and you go to a supermarket and you see a potentially overpriced box of pasta. And you take that device and you wand it over the product code, and you see comparison prices from Google of three other stores that are within a mile, OK? That's power. That's search. But no one has quite figured out that. That's also the future.

Brin won't say if it's something in Google's future. But there is one ambition he admits to: finishing his Ph.D. "My mom asks me every week," he says. "I actually do keep meaning to finish it. But I haven't found quite the slot of time."