Smash hit

With a superb search technology and a growing edge in the quality of its employees, Brin and Page sought to figure out how to keep Google afloat without compromising their lofty principles. Rather than focus on licensing its search technology to businesses, they decided to concentrate on profiting by allowing advertisers to reach their growing and loyal legion of users. Google would continue to keep search results free — just as television networks offered entertainment and news free — and would look to make money by selling unobtrusive, targeted advertising to businesses on the results pages.

A few search engines, hungry for cash, accepted money from websites in exchange for placing the sites in search results. Brin and Page saw this as a “particularly insidious” form of bias and eschewed such payments. They also disliked the flashy, irrelevant banner ads that littered the internet. But there was another path to profit: running targeted “text only” ads that were triggered by users’ specific search requests.

“We are about money and profits,” said Brin, revealing his conversion from strident student to pragmatic company president. “Banners are not working and click-through rates are falling. I think highly focused ads are the answer.”

One company that caught Brin’s attention, for the simple reason that it seemed to be making money by selling ads to accompany search results, was GoTo.com, later renamed Overture Inc.

Although most consumers had never heard of Overture, it provided the ads that appeared with search results on Yahoo, America Online, EarthLink, and other leading internet sites. In fact, in contrast to the backlash against annoying pop-up and banner ads, search-related advertising was just about the most appealing game in town, and one that was growing. ()

Brin and Page began studying Overture and immediately found aspects of its approach distasteful. Among other things, it would sell guarantees that websites would be included more frequently in web crawls if a business was willing to pay extra for it.

The Google Guys had two choices: they could hire Overture to sell ads to display alongside search results on Google.com, or they could try to sell advertising themselves.

The decision was not difficult. Google wrote all its own software and built all its own computers. If Brin and Page believed in anything, it was their own ability to get things done. Why couldn’t they sell ads themselves and keep 100 cents of every dollar, rather than share the proceeds with Overture? Doing it themselves would also give them total control, enabling them to avoid potentially dangerous conflicts and any perceptions that might damage Google’s stature as a trusted brand name.

So the two decided to emulate aspects of what Overture had started in 1998 on the ad side, with some tweaks. The newly emerging business strategy was simple: continue to produce free search results, and profit by selling ads. The key was to make it clear they would not bias the search results.

Brin and Page talked to many people before embarking on the path toward ads to ensure they didn’t make any mistakes. They became persuaded that, just as there was a clear distinction between news stories and ads in newspapers, they could achieve the same thing on Google.com.

But they hated to clutter the clean interface that had been its calling card from the start, so they kept the homepage free of ads, and they developed strict standards for the size and type of ads they would display elsewhere. They decided also to have a bright line on the results page that separated the free search results from the ads, which they would label “Sponsored Links”. That way, nobody could argue that the search results were combined with the ads, yet the ads would be clicked on more often under the heading “Sponsored Links” than if they were simply labelled “Ads”.

The ads were to be brief and look identical — just a headline, a link, and a short, haiku-like description. Initially they were sold one by one, mostly to larger businesses that could afford hefty ad campaigns. But by using their own technology they soon moved to a model that enabled advertisers to sign up easily online. This cut costs, and brought midsize businesses into the fold. Text ads could be up and running on Google in minutes after a company provided its credit-card number.

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