The Google Guys by Richard L. Brandt

potential as it becomes increasingly dependent on partnerships in order to expand into new markets.
    So, the more amenable Schmidt is taking on more and more responsibility for working with third parties. “Larry and Sergey are good at anything they choose to be good at,” the CEO says. “Their role has evolved. Before we went public, they were doing everything. After going public, they retreated to work on the product side and the innovation side. Today, that ballet works.”
    It is, however, a dance that is still evolving.

Chapter 5
    Advertising for the Masses
    I have never made but one prayer to God, a very short one: “O Lord, make my enemies ridiculous.” And God granted it.
    â€”Voltaire
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    I n June of 2000, Larry and Sergey had a meeting with America Online. AOL had recently merged with Time Warner, creating what most observers believed to be the most important Internet property in the business. The AOL executives wanted to get to know Google better and were considering licensing its search engine. Google had already garnered rave reviews and, in terms of users, was growing faster than a baseball player on steroids. But it had officially been on the market for only a few months, and the AOL deal was huge for Google. It made sense to link the two companies; KPCB was an early investor in both Google and AOL. Although licensing their search engine was the primary means of getting revenue at the time, Larry and Sergey were reluctant participants in the talks.
    â€œSergey and Larry were mad that they had to go to the meeting,” says an employee who worked at Google for most of 2000 but who, like most former employees, refuses to let his name be used. “They only wanted to talk to technology people. They were really socially awkward.”
    The AOL executives started talking about all the potential opportunities in the two companies’ working together. Then one of the AOL business guys in the meeting talked about how Google was “stupidly” refusing money by not accepting paid placements—i.e., ads slipped surreptitiously into the search results. This was one thing that Larry and Sergey considered evil. Says the former employee, “Sergey walked out of the meeting and started screaming so that everyone in the meeting could hear him, ‘Someone get me a can of gasoline—I have to light myself on fire to get rid of the scum of those people.’ ”
    So much for getting AOL’s business—at least that time. In 2002, Google returned to the negotiating table with AOL to discuss the possibility both of AOL using Google’s search engine and of Google enhancing AOL’s advertising system with its own. This time Schmidt took charge of negotiations, and this time he was the one reluctant to sign a deal. AOL wanted a guarantee that Google would provide it with at least $50 million in revenue over the length of the contract. At that time, Google was bringing in only a total of $80 million in revenue annually for itself, was just breaking even, and had net cash assets of zero: $9 million in cash and $9 million in debt. “I thought we would go bankrupt,” Schmidt says.
    This started the first huge argument between the founders and the CEO, one he describes as “a significant marital spat.” Larry and Sergey were ready to take the deal, and ended up arguing with Schmidt every day. Eventually Schmidt decided to schedule an argument every afternoon at 4:00 P.M. The scheduled arguments included Larry and Sergey, sales executive Omid Kordestani, corporate counsel David Drummond, and Eric Schmidt. But Larry and Sergey would not give in.
    Finally, Schmidt decided to take his case to the board, certain that the venture capitalists who had backed Google would share his reluctance. He was wrong. By that time they had learned to trust the seeming recklessness of the founders. “I called the board members, and they said, ‘Oh, take the