The Google Guys by Richard L. Brandt Page B

are selected as having the right phenotype to prosper.
    Larry and Sergey provided Google with the DNA that allowed it to thrive and become destined to reside at the pinnacle of the Internet food chain. Just as organisms that have evolved for a particular environment lose their advantage once the environment changes, existing corporations tend to follow the same path into obsolescence. In fact, many of the ideas that Google developed were simultaneously being explored at other companies. Those ideas just never went anywhere, their significance poorly understood at the time. When it came to advertising, Larry and Sergey got it. Their advertising plan was developed—or at least considered—before Google was even launched. In a January 1999 interview conducted by Karsten Lemm, Sergey stated that they were in the process of “preparing” ideas about how to make money: “One thing is we can put up some advertising. Another way would be co-branding. Provide the back-end search engine to other sites.” 5
    But those ideas did not take the form of an actual formal business plan. In fact, there was no business plan, which would normally lay out in detail the proposed revenue stream, with projections on how fast revenues would grow in five years. “We worked on a business plan for a little bit, but we were basically never even asked for it,” Sergey told Lemm. He then added, “Recently we got an e-mail from one of our investors saying, ‘Oh, do you guys have a business plan? I don’t think I ever saw one.’ ”
    Although they didn’t yet have any idea how the ads would work, they already knew one thing: the ads had to be useful rather than an annoyance. Said Sergey: “The key there is to put up advertising that will be really useful to our users and not slow down our site. That way we won’t push people away from our site, but we’ll still take in some revenue.”
    It took them nearly three years to figure out how to fill the requirements Sergey had stipulated. Silverstein says that Larry and Sergey felt that no advertiser on the Internet had solved that problem. It’s likely none of them was trying. Just as Larry and Sergey demonstrated that there was a huge market for a search engine that gave better results, they set out to show that there was a market for Internet advertising that gave better results, with the needs of the user—not the advertisers—given the highest priority. “We had this idea that if we could get a lot of users, we could make money,” says Silverstein. “That said, we did not have advertising for a long time because we couldn’t think of a way to do it that we thought was good for our users. Which I think gets to what Sergey was warning about. There are a lot of ways to do advertising. It took us quite a while to find a way that was actually beneficial to users and have an appropriate separation between editorial and advertising. We noodled it over, we talked about it.”
    Larry and Sergey have maintained this attitude that advertising should be done only when it helps the user in some way. In 2006, engineers met with Larry and Sergey with a simple proposal: to include ads with image-search results. They argued that this would add $80 million a year to revenues. Larry’s response was to ask: “We’re not making enough money already?” Sergey was equally skeptical. “I don’t see how it enhances the experience of our users,” he said. They rejected the proposal. 6

Inventing AdWords
    In 2002, most advertising at the time, including ads on Microsoft’s site, MSN, came in the form of banner or display advertising, flashing billboards that appeared at the top of the page. Some search engine/portals were already “selling” search terms to advertisers, charging them for making the ads appear when people searched using certain words. But most contracts set a predetermined price