Google

Background

Google, the internet search giant founded in 1998 by Larry Page and Sergey Brin, has spent more than a quarter-century organizing vast amounts of the information and content found online—making everything from videos to books to news stories more quickly and easily accessible. 

The launch of Google’s namesake search engine that year would prove so successful that the word "Google" itself entered the common vernacular as a verb. The company now handles some 8.5 billion searches a day, with the resulting ad revenue attached to those searches helping turn Google into a $2T company.

The Breakthrough Idea

Google’s story began in a Stanford University dorm room, where the two founders developed an algorithm for sorting and searching information on the web called PageRank (watch overview). It operated on the theory that the number and quality of links pointing to a webpage would signal that page’s importance and relevance to a user.

This algorithm would be the central innovation driving Google to its early dominance. Brin and Page incorporated the company in September 1998, the same day their PageRank-infused Google search engine became available to the public—a search engine soon delivering better and more accurate results than rivals.

Google offered a much cleaner, simpler interface than its rivals. The results were highly relevant—due to PageRank’s sorting methods—compared to the often spammy and limited utility of early search engine results that relied on matching keywords.

Google Search, in turn, laid the groundwork for Google’s ads business that accounted for some 75% of parent company Alphabet’s total revenue in 2023. User searches signal intent, and Google tries to meet that intent with personalized ads included among search results.

In other words, the market leadership of Google Search matched with its uniquely targeted advertising made for revenue potential at an unprecedented scale.

Milestones

Google spent its early years raising money to fund its infrastructure and growth. In 2001, Eric Schmidt joined as CEO; three years later, Google went public and raised almost $2B. 

Google launched Gmail in 2004, allowing it to apply its search expertise and leverage its experience in selling ads against user interests while differentiating it from rival search companies. The service now has an estimated 1.8 billion users.

In 2006, Google acquired YouTube—another opportunity to leverage search and ad sales—an investment that improved the company’s core technology while bringing new revenue opportunities. YouTube accounted for over $31B of the $307B Google’s parent company Alphabet made in 2023.

Other milestones include Google Maps, its Chrome internet browser, the Android mobile operating system, and the now-defunct social network Google+. See a timeline here.

In 2015, Google restructured to become a subsidiary of a holding company, Alphabet. This allows Google to continue focusing on its core business, while Alphabet pursues more experimental ventures.

The Future

Google today generally maintains a roughly 90% share of global online search. Despite its long list of acquisitions, Google’s ads are still responsible for some 75% of Alphabet’s entire yearly revenue. 

Some analysts suggest the rise of chatbots like ChatGPT, Perplexity, Anthropic’s Claude, and others, may fundamentally challenge Google’s core business because they provide direct answers to queries instead of sending users to third-party links. In response, Google began incorporating AI-generated answers at the top of many searches in mid-2024. 

Separately, regulators are weighing a breakup of Google in response to a federal judge’s landmark ruling that Google’s dominance of internet search makes the company equivalent to a monopoly. Cases remain ongoing as of third quarter 2024.