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In search of a dissertation theme, Page had been considering—among other things—exploring the mathematical properties of the World Wide Web, understanding its link structure as a huge graph. His supervisor, Terry Winograd, encouraged him to pick this idea (which Page later recalled as "the best advice I ever got") and Page focused on the problem of finding out which web pages link to a given page, based on the consideration that the number and nature of such backlinks was valuable information for an analysis of that page (with the role of citations in academic publishing in mind).
In his research project, nicknamed "BackRub", Page was soon joined by Brin, who was supported by a National Science Foundation Graduate Fellowship. Brin was already a close friend, whom Page had first met in the summer of 1995—Page was part of a group of potential new students that Brin had volunteered to show around the campus. Both Brin and Page were working on the Stanford Digital Library Project (SDLP). The SDLP's goal was “to develop the enabling technologies for a single, integrated and universal digital library" and it was funded through the National Science Foundation, among other federal agencies.
Page's web crawler began exploring the web in March 1996, with Page's own Stanford home page serving as the only starting point. To convert the backlink data that it gathered for a given web page into a measure of importance, Brin and Page developed the PageRank algorithm. While analyzing BackRub's output—which, for a given URL, consisted of a list of backlinks ranked by importance—the pair realized that a search engine based on PageRank would produce better results than existing techniques (existing search engines at the time essentially ranked results according to how many times the search term appeared on a page).
A small search engine called "RankDex" from IDD Information Services (a subsidiary of Dow Jones) designed by Robin Li was, since 1996, already exploring a similar strategy for site-scoring and page ranking. The technology in RankDex was patented and used later when Li founded Baidu in China.
Convinced that the pages with the most links to them from other highly relevant Web pages must be the most relevant pages associated with the search, Page and Brin tested their thesis as part of their studies, and laid the foundation for their search engine. By early 1997, the BackRub page described the state as follows:[dead link]
Originally the search engine used Stanford's website with the domain google.stanford.edu. The domain google.com was registered on September 15, 1997. They formally incorporated their company, Google, on September 4, 1998 at a friend's (Susan Wojcicki) garage in Menlo Park, California.
The first patent filed under the name "Google Inc." was filed on August 31, 1999. This patent, filed by Siu-Leong Iu, Malcom Davis, Hui Luo, Yun-Ting Lin, Guillaume Mercier, and Kobad Bugwadia, is titled "Watermarking system and methodology for digital multimedia content" and is the earliest patent filing under the assignee name "Google Inc."
Both Brin and Page had been against using advertising pop-ups in a search engine, or an "advertising funded search engines" model, and they wrote a research paper in 1998 on the topic while still students. They changed their minds early on and allowed simple text ads.
By the end of 1998, Google had an index of about 60 million pages. The home page was still marked "BETA", but an article in Salon.com already argued that Google's search results were better than those of competitors like Hotbot or Excite.com, and praised it for being more technologically innovative than the overloaded portal sites (like Yahoo!, Excite.com, Lycos, Netscape's Netcenter, AOL.com, Go.com and MSN.com) which at that time, during the growing dot-com bubble, were seen as "the future of the Web", especially by stock market investors.
In March 1999, the company moved into offices at 165 University Avenue in Palo Alto, home to several other noted Silicon Valley technology startups. After quickly outgrowing two other sites, the company leased a complex of buildings in Mountain View at 1600 Amphitheatre Parkway from Silicon Graphics (SGI) in 2003. The company has remained at this location ever since, and the complex has since become known as the Googleplex (a play on the word googolplex, a number that is equal to 1 followed by a googol of zeros). In 2006, Google bought the property from SGI for US$319 million.
The Google search engine attracted a loyal following among the growing number of Internet users, who liked its simple design. In 2000, Google began selling advertisements associated with search keywords. The ads were text-based to maintain an uncluttered page design and to maximize page loading speed. Keywords were sold based on a combination of price bid and click-throughs, with bidding starting at $.05 per click. This model of selling keyword advertising was pioneered by Goto.com (later renamed Overture Services, before being acquired by Yahoo! and rebranded as Yahoo! Search Marketing). While many of its dot-com rivals failed in the new Internet marketplace, Google quietly rose in stature while generating revenue.
Google's declared code of conduct is "Don't be evil", a phrase which they went so far as to include in their prospectus (aka "S-1") for their 2004 IPO, noting that "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."
The first funding for Google as a company was secured in August 1998 in the form of a US$100,000 contribution from Andy Bechtolsheim, co-founder of Sun Microsystems, given to a corporation which did not yet exist.
On June 7, 1999, a round of equity funding totalling $25 million was announced; the major investors being rival venture capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital. While Google still needed more funding for their further expansion, Brin and Page were hesitant to take the company public, despite their financial issues. They were not ready to give up control over Google.
Following the closing of the $25 million financing round, Sequoia encouraged Brin and Page to hire a CEO. Brin and Page ultimately acquiesced and hired Eric Schmidt as Google’s first CEO in March 2001.
In October 2003, while discussing a possible initial public offering of shares (IPO), Microsoft approached the company about a possible partnership or merger. The deal never materialized. In January 2004, Google announced the hiring of Morgan Stanley and Goldman Sachs Group to arrange an IPO. The IPO was projected to raise as much as $4 billion.
Google's initial public offering took place on August 19, 2004. A total of 19,605,052 shares were offered at a price of $85 per share. Of that, 14,142,135 (another mathematical reference as √2 ≈ 1.4142135) were floated by Google and 5,462,917 by selling stockholders. The sale raised US$1.67 billion, and gave Google a market capitalization of more than $23 billion. Many of Google's employees became instant paper millionaires. Yahoo!, a competitor of Google, also benefited from the IPO because it owns 2.7 million shares of Google.
After reporting earnings on the 17th of October 2013, the stock price of GOOG closed above $1,000.00 for the first time in its history of trading on the NASDAQ.
|This section does not cite any references or sources. (January 2015)|
In February 2003, Google acquired Pyra Labs, owner of Blogger, a web log hosting website. The acquisition secured the company's competitive ability to use information gleaned from blog postings to improve the speed and relevance of articles contained in a companion product to the search engine Google News.
At its peak in early 2004, Google handled upwards of 84.7% of all search requests on the World Wide Web through its website and through its partnerships with other Internet clients like Yahoo!, AOL, and CNN. In February 2004, Yahoo! dropped its partnership with Google, providing an independent search engine of its own. This cost Google some market share, yet Yahoo!'s move highlighted Google's own distinctiveness, and today[when?] the verb "to google" has entered a number of languages (first as a slang verb and now as a standard word), meaning "to perform a web search" (a possible indication of "Google" becoming a genericized trademark).
After the IPO, Google's stock market capitalization rose greatly and the stock price more than quadrupled. On August 19, 2004 the number of shares outstanding was 172.85 million while the "free float" was 19.60 million (which makes 89% held by insiders). In January 2005 the number of shares outstanding was up 100 million to 273.42 million, 53% of that was held by insiders, which made the float 127.70 million (up 110 million shares from the first trading day).} The two founders were said to hold almost 30% of the outstanding shares. The actual voting power of the insiders was much higher, as Google has a dual class stock structure in which each Class B share gets ten votes compared to each Class A share getting one. Page says in the prospectus that Google has "a dual class structure that is biased toward stability and independence and that requires investors to bet on the team, especially Sergey and me." The company had not reported any treasury stock holdings as of the Q3 2004 report.
On June 1, 2005, Google shares gained nearly four percent after Credit Suisse First Boston raised its price target on the stock to $350. On that same day, rumors circulated in the financial community that Google would soon be included in the S&P 500. When companies are first listed on the S&P 500 they typically experience a bump in share price due to rapid accumulation of the stock within index funds that track the S&P 500. Google was not added to the S&P 500 until 2006. Nevertheless, on June 7, 2005, Google was valued at nearly $52 billion, making it one of the world's biggest media companies by stock market value.
On August 18, 2005 (one year after the initial IPO), Google announced that it would sell 14,159,265 (another mathematical reference as π ≈ 3.14159265) more shares of its stock to raise money. The move would double Google's cash stockpile to $7 billion. Google said it would use the money for "acquisitions of complementary businesses, technologies or other assets".
On September 28, 2005, Google announced a long-term research partnership with NASA which would involve Google building a 1,000,000-square-foot (93,000 m2) R&D center at NASA's Ames Research Center, and on December 31, 2005 Time Warner's AOL unit and Google unveiled an expanded partnership—see Partnerships below.
Additionally in 2005, Google formed a partnership with Sun Microsystems to help share and distribute each other's technologies. As part of the partnership Google will hire employees to help in the open source office program OpenOffice.org.
With Google's increased size came more competition from large mainstream technology companies. One such example is the rivalry between Microsoft and Google. Microsoft had been touting its Bing search engine to counter Google's competitive position. Furthermore, the two companies are increasingly offering overlapping services, such as webmail (Gmail vs. Hotmail), search (both online and local desktop searching), and other applications (for example, Microsoft's Windows Live Local competes with Google Earth). In addition to an Internet Explorer replacement Google designed its own Linux-based operating system called Chrome OS to directly compete with Microsoft Windows. There were also rumors of a Google web browser, fueled much by the fact that Google is the owner of the domain name "gbrowser.com". These were later proven when Google released Google Chrome. This corporate feud boiled over into the courts when Kai-Fu Lee, a former vice-president of Microsoft, quit Microsoft to work for Google. Microsoft sued to stop his move by citing Lee's non-compete contract (he had access to much sensitive information regarding Microsoft's plans in China). Google and Microsoft reached a settlement out of court on December 22, 2005, the terms of which are confidential.
Click fraud also became a growing problem for Google's business strategy. Google's CFO George Reyes said in a December 2004 investor conference that "something has to be done about this really, really quickly, because I think, potentially, it threatens our business model."
While the company's primary market is in the web content arena, Google has experimented with other markets, such as radio and print publications. On January 17, 2006, Google announced that it had purchased the radio advertising company dMarc, which provides an automated system that allows companies to advertise on the radio. Google also began an experiment in selling advertisements from its advertisers in offline newspapers and magazines, with select advertisements in the Chicago Sun-Times.
During the third quarter 2005 Google Conference Call, Eric Schmidt said, "We don't do the same thing as everyone else does. And so if you try to predict our product strategy by simply saying well so and so has this and Google will do the same thing, it's almost always the wrong answer. We look at markets as they exist and we assume they are pretty well served by their existing players. We try to see new problems and new markets using the technology that others use and we build."
After months of speculation, Google was added to the Standard & Poor's 500 index (S&P 500) on March 31, 2006. Google replaced Burlington Resources, a major oil producer based in Houston that had been acquired by ConocoPhillips. The day after the announcement Google's share price rose by 7%.
As of November 2014, Google operates over 70 offices in more than 40 countries.
In its infancy, very little was needed to fully optimize on page content in the eyes of Google. With an inverse relationship between query position (in the HTML tag hierarchy) and weight, it simply boiled down to putting one’s important keywords higher on the HTML tag hierarchy. With this relatively simple algorithm in place, webmasters quickly discovered tricks to vastly boost their SERP (Search Engine Ranking Position). One of the first instances of deceitful SEO, came in the form of link keyword stuffing under on page content. As a response, Google removed these sites from its index, a practice it occasionally reverts to as a way of punishing disingenuous webmasters looking to cheat the system. The seemingly arbitrary changes to Googles PageRank algorithm however, led to both community outrage (“many declaring the “death of PageRank”) and a noticeable decline in precision of search results. Google was also constructing its index via a large monthly crawl. Not only did this lock search results to this one month window, it also meant that results would show stale content. An update dubbed “Everflux” introduced fresh crawling (daily crawls) to supplement the larger, primary crawl. Daily crawling added another layer of relevancy, (based upon date and time), to content ranking. The inconsistencies of index versions across data centers during the early implementation of Everflux panicked users, who saw their SERPs fluctuate wildly from day to day.
Google's “Boston” update in February 2003 saw major algorithmic changes and the promise of frequent index updates. “Cassandra” marked a much more aggressive attack on shady SEO techniques like hidden and disguised keyword links, by emphasizing link quality This was taken a step further in “Dominic”, which sought to analyze the quality of all backlinks to prevent the then emerging practice of splogging (the practice of creating nonsensical offsite content to boost SERP of another site). To combat practices like “Googlebombing” (putting irrelevant, often negative anchor text linking to popular websites) Dominic tinkered with the weighting of anchor text while stringently scrutinizing back links and internal linking. An exploit where webmasters would link to the same site using different anchor text (thereby allowing both links to unfairly contribute to sites PageRank) was addressed by allowing only one site (given duplicate site links with differing anchor text) link to flow to PageRank.
Fritz finalized the “Everflux” implementation, meaning Google's index would receive some degree of updating every day. Daily crawling added another layer of relevancy, (based upon date and time), to content ranking. The creation of a supplemental index was designed to house content Google felt didn’t quite fit in its main index (due either to a low PageRank or shady linking practices). Storing some sites in a separate index that was to be searched only when no good match was found in the primary index, Google hoped, would seamlessly filter out duplicate and untrustworthy content. Questions about the efficacy of a multi-index system (particularly on improving recall) arose, and it remains unclear as to whether Google has retained this system. Google's “Florida” update looked to be the proverbial “nail in the coffin” for SEO abusers. With Florida, context and relevancy were determined not just by the appearance of keywords, but of synonyms and supporting vocabulary throughout the page. This sought to eliminate keyword and inbound anchor text dumping. Features that had long been experimented on, like phrase proximity and keyword stemming, became official and users were now being penalized for overly using commercial/popular keywords. With Florida coming down hard on SEO, many webmasters with commercial presences on the web took a drastic hit. The real estate community in particular, was hit hard by Florida’s changes to Google rankings. In its attempt at wide spread reform, the quality of results took a hit and many site owners felt they took undeserved drops.
Building off of Florida’s aggressive approach to SEO, Austin targeted Free-For-All pages (pages that allow users to enter a url thereby creating a free backlink) and meta-tag stuffing. Google also began to implement elements of the “Hilltop” algorithm, which focuses on identifying “expert” (pages that link to many relevant documents) pages and then giving a boost to “authority” pages with several outgoing links from that expert page. Brandy saw the growth of the already sizable Google index as well as two important tools for analyzing relevance: Latent Semantic Indexing and link relevancy (“neighborhoods”). By looking at the relationship among terms and the overlap of term use across documents, Latent Semantic Indexing went beyond simple text matching to provide a more robust and “intelligent” search service. The idea of link “neighborhoods” was introduced in Brandy and it made it important to have backlinks that were relevant to the linked site. A sites use of keywords in its HTML tag hierarchy was also devalued in what was another attempt to curb SEO. Austin and Brandy marked a decided shift towards content analysis in site ranking.
The no-follow HTML attribute allowed site owners to tell Google not to crawl specific links on their page. By giving this kind of control directly to the user, untrusted content and paid links could be removed from Google’s crawl at the site-owners discretion.
To create seamless personalization of search (beyond manual filtering) Google began tapping into users browsing histories to deliver more relevant, personal results. Promising to grow with the users browsing history, Personalized Search added a new dimension to search by incorporating past user behavior. The implementation of personalized search was a blow to those relying on SEO techniques, as user browsing history was an element outside of their control.
By allowing webmasters to create and submit XML files dictating URLs to be crawled as well as procedural information regarding how the page should be crawled, Google expanded the scope of its index. Providing an additional method of organically increasing site exposure, Google hoped, would decrease the need for shady SEO practices.
Big Daddy was less an algorithmic change as it was a change of Google's crawling and indexing infrastructure. Pages with superfluous, reciprocal linking schemes and irrelevant outbound and inbound links would be demoted in the new crawler. Whereas previous updates handled the issue of link reliability through algorithmic changes, the Big Daddy modified how many pages a site would have crawled, and subsequently added to the index. The number of pages crawled on a site was again dependent on the relevance and quality of its links.
In May 2007 Google implemented Universal search to its standard web results page. Search results were now a compilation of all relevant results across all of Google’s “vertical” search engines, (Google Images, Google Video etc.). With the implementation of Universal Search, coverage of all types of content (not simply text) rose significantly. It now became important to optimize all forms of on-site content, not just on-site text content, increasing the complexity and breadth of SEO.
Google Suggest marked the addition of real-time query suggestion. As users began to enter a query, a list of possible query matches would dynamically appear beneath the search bar, allowing for quicker and more accurate searches. According to Google, only about 2% of all user queries were tracked and monitored, in an effort to better improve the service, quelling concerns over privacy. The addition of instant suggestions added yet another dynamic to SEO, as webmasters now vied to associate their site with high ranking instant suggestion queries.
In December 2009, Google integrated real time search results to its main SERP. Newly indexed, relevant content from social media and news sources would be dynamically inserted into a user’s SERP, thus providing “real time content.” Google also announced its desire to prioritize original, user driven social media over authoritative, corporate social media. Additionally, a separate “updates” filter was added, allowing the user to receive all incoming content from social media, sports, and news sources.
Google’s Caffeine was the result of a complete overhaul of Google’s indexing structure. To accommodate for the explosion of new forms of content (video, real-time content, images) and growing user expectations, Google ditched its old linear system of indexing in favor of the more flexible Caffeine, capable of indexing thousands of pages in parallel. Google would no longer execute lengthy crawls supplemented by smaller daily crawls, but instead dynamically add to its index whenever new information appeared. Caffeine was reported to offer 50% fresher content than Google’s previous index, and required around 100 million gigabytes of memory.
In February 2011, the New York Times published an article titled “The Dirty Little Secrets of Search” detailing backlink purchasing by the clothing retailer JC Penny. By purchasing thousands of backlinks (often on unrelated sites), JC Penny dominated Google’s SERP across many clothing related queries, and even queries specifying a brand (JC Penny topped Samsonite for the query “Samsonite carryon luggage”). Given Google’s previous updates and their emphasis on backlink analysis, the JC Penny incident revealed that flaws still existed within the Google ranking algorithm. Google quickly demoted JC Penny’s search position, crippling online sales. Google has since lifted the demotion.
The name "Google" originated from a misspelling of "googol", which refers to the number represented by a 1 followed by one-hundred zeros. Page and Brin write in their original paper on PageRank: "We chose our systems name, Google, because it is a common spelling of googol, or 10100 and fits well with our goal of building very large-scale search engines."
There are uses of the name going back at least as far as the creation of the comic strip character Barney Google in 1919. Enid Blyton used the phrase "Google Bun" in The Magic Faraway Tree (published 1941) The Folk of the Faraway Tree (published 1946), and called a clown character "Google" in Circus Days Again (published 1942). There is also the Googleplex Star Thinker from Douglas Adams' The Hitchhiker's Guide to the Galaxy. In March 1996 a business called Groove Track Productions applied for a United States trademark for "Google" for various products including several categories of clothing, stuffed toys, board games, and candy. The firm abandoned its application in July 1997.[verification needed]
Having found its way increasingly into everyday language, the verb "google" was added to the Merriam Webster Collegiate Dictionary and the Oxford English Dictionary in 2006, meaning "to use the Google search engine to obtain information on the Internet." The use of the term itself reflects their mission to organize a seemingly infinite amount of information on the web. In November 2009, the Global Language Monitor named "Google" No. 7 on its Top Words of the Decade list. In December 2009 the BBC highlighted Google in their "Portrait of the Decade (Words)" series. In May 2012, David Elliott filed a complaint against Google, Inc. claiming that Google’s once distinctive mark GOOGLE® has become generic and lacks trademark significance due to its common use as a transitive verb. After losing to Google in UDRP proceedings involving many “Google-related” domain name registrations that he owns, Elliott now seeks a declaratory judgment that his domain names are rightfully his, that they do not infringe any trademark rights Google may own, and that all Google’s registered GOOGLE® marks should be cancelled since “Google” is now a common generic word worldwide that means “to search the Internet.”
In 2004, Google formed a non-profit philanthropic wing, Google.org, giving it a starting fund of $1 billion. The express mission of the organization is to help with the issues of climate change (see also global warming), global public health, and global poverty. Among its first projects is to develop a viable plug-in hybrid electric vehicle that can attain 0.24 litre/10 km.
Since 2001, Google has acquired several small companies, often consisting of innovative teams and products. One of the earlier companies that Google bought was Pyra Labs. They were the creators of Blogger, a weblog publishing platform, first launched in 1999. This acquisition led to many premium features becoming free. Pyra Labs was originally formed by Evan Williams, yet he left Google in 2004. In early 2006, Google acquired Upstartle, a company responsible for the online collaborative word processor, Writely. The technology in this product was combined with Google Spreadsheets to become Google Docs & Spreadsheets.
On October 9, 2006, Google announced that it would buy the popular online video site YouTube for $1.65 billion and maintain YouTube as a separate brand, rather than merging it with Google Video. Meanwhile, Google Video signed an agreement with Sony BMG Music Entertainment and the Warner Music Group, for both companies to deliver music videos to the site. The deal was finalized by November 13, 2006.
On October 31, 2006, Google announced that it had purchased JotSpot, a company that helped pioneer the market for collaborative, web-based business software to bolster its position in the online document arena.
On March 17, 2007, Google announced its acquisition of two more companies. The first is Gapminder's Trendalyzer software, a company that specializes in developing information technology for provision of free statistics in new visual and animated ways On the same day, Google also announced its acquisition of Adscape Media, a small in-game advertising company based in San Francisco, California.
Google has worked with several corporations, in order to improve production and services. On September 28, 2005, Google announced a long-term research partnership with NASA which would involve Google building a 1,000,000-square-foot (93,000 m2) R&D center at NASA's Ames Research Center. NASA and Google are planning to work together on a variety of areas, including large-scale data management, massively distributed computing, bio-info-nano convergence, and encouragement of the entrepreneurial space industry. The new building would also include labs, offices, and housing for Google engineers. In October 2006, Google formed a partnership with Sun Microsystems to help share and distribute each other's technologies. As part of the partnership Google will hire employees to help the open source office program OpenOffice.org.
Time Warner's AOL unit and Google unveiled an expanded partnership on December 21, 2005, including an enhanced global advertising partnership and a US$1 billion investment by Google for a 5% stake in AOL. As part of the collaboration, Google plans to work with AOL on video search and offer AOL's premium-video service within Google Video. This did not allow users of Google Video to search for AOL's premium-video services. Display advertising throughout the Google network will also increase.
In August 2006, Google signed a $900 million offer with News Corp.'s Fox Interactive Media unit to provide search and advertising on MySpace and other News Corp. websites including IGN, AmericanIdol.com, Fox.com, and Rotten Tomatoes, although Fox Sports is not included as a deal already exists between News Corp. and MSN.
On December 6, 2006, British Sky Broadcasting released details of a Sky and Google alliance. This includes a feature where Gmail will link with Sky and host a mail service for Sky, incorporating the email domain "@sky.com".
In 2007, Google displaced America Online as a key partner and sponsor of the NORAD Tracks Santa program. Google Earth was used for the first time to give visitors to the website the impression that they were following Santa Claus' progress in 3-D. The program also made its presence known on YouTube in 2007 as part of its partnership with Google.
In coordination with several of the major corporations, including Microsoft, Nokia, LG, Samsung, and Ericsson, Google provided financial support in the launch of the .mobi top level domain created specifically for the mobile internet, stating that it is supporting the new domain extension to help set the standards that will define the future of mobile content and improve the experience of Google users. In early 2006, Google launched Google.mobi, a mobile search portal offering several Google mobile products, including stripped-down versions of its applications and services for mobile users. On September 17, 2007, Google launched "Adsense for Mobile", a service to its publishing partners providing the ability to monetize their mobile websites through the targeted placement of mobile text ads. Also in September, Google acquired the mobile social networking site, Zingku.mobi to "provide people worldwide with direct access to Google applications, and ultimately the information they want and need, right from their mobile devices."
On Wednesday, January 18, 2006, the U.S. Justice Department filed a motion to compel in United States district court in San Jose seeking a court order that would compel search engine company Google Inc. to turn over "a multi-stage random sample of one million URL’s" from Google’s database, and a computer file with "the text of each search string entered onto Google’s search engine over a one-week period (absent any information identifying the person who entered such query)." Google maintains that their policy has always been to assure its users' privacy and anonymity, and challenged the subpoena. On March 18, 2006, a federal judge ruled that while Google must surrender 50,000 random URLs, the Department of Justice did not meet the necessary burden to force Google to disclose any search terms entered by its users in Google.
A jury in Texas awarded Bedrock Computer Technologies $5 million in a patent lawsuit against Google. The patent allegedly covered use of hash tables with garbage collection and separate chaining in the Red Hat Linux kernel. The judgment was later vacated by the court.