How Google Grows...and Grows...and Grows

The company's organic approach to invention bugs some onlookers. "Google is a great innovator," says Danny Sullivan, editor of Search Engine Watch and an influential commentator. "They keep rolling out great things. But Google News was an engineer deciding he wanted a news engine. Now Google has this product, and it doesn't know how to make money off of it."

Sullivan is onto something important: At some point, all of this great stuff has to turn a profit. That was the one great moral of the dotcom blowout: "Monetizing eyeballs" turned out to mean "throwing money down a sinkhole." When Mayer argues that "the traffic will let us know" whether News is a success, she's echoing a long line of now-unemployed executives who thought that they had tamed the business cycle.

But at Google, building and then following the traffic makes perfect sense. It's central to the company's culture and its operating logic. Consider this: For the first 18 months of its existence, Google didn't make a penny from its basic Web-search service. Only then did it make the transition from great technology to great technology with a critical mass of users.

And Google was able to package that traffic in ways that seem both ingenious and completely synchronous. The search service itself remained free. But Google has, for example, sold untold numbers of ads pegged to specific search keywords. (Not surprisingly, Fast Company slips in a paid ad to the side of your results whenever your query includes fast company.)

Advertisers don't just pay a set rate, or even a cost per thousand viewers. They bid on the search term. The more an advertiser is willing to pay, the higher its ad will be positioned. But if the ad doesn't get clicks, its rank will decline over time, regardless of how much has been bid. If an ad is persistently irrelevant, Google will remove it: It's not working for the advertiser, it's not serving users, and it's taking up server capacity.

This is how it is at Google. Google News attracted eyeballs among Bharat's employees, so it made the leap to the public domain. If enough users like it, it will have real power with advertisers. And traffic for advertisers will beget even more traffic for advertisers.

So yes, Mayer has a revenue strategy. She's had one since January 2002, before the first version of News went public. She won't say what it is, but if News can build enough traffic, Google almost surely will seek advertising. It will probably resell the service to portals and other commercial sites, just as it does with its core Web search. (Every time you see the Google logo on a corporate site, the company is likely paying at least $25,000 a year for a Google server.) "But we're not in a hurry," Mayer says. "We're focused on making News a great experience. Until we figure out whether the product has traction, there's no rush to execute the revenue plan."

Could it be any simpler? Build great products, and see if people use them. If they do, then you have created value. And if you've truly done that, then you have a business. Says Mayer: "Our motto here is, There's no such thing as success-failure on the Net." In other words, if users win, then Google wins. Long live democracy.

Sidebar: Just how big is Google?

That's hard to say. Officially, Google says that it processes more than 150 million searches a day, but the true number is probably much higher. According to Nielsen/NetRatings, 67.6 million people worldwide visited Google an average of 6.2 times last December. Analysts guess that last year's revenue was between $60 million and $300 million.

Sidebar: A Gaggle of Google Games

While tens of millions of people like Google, a disconcertingly large minority are obsessed with it. Since 1999, techies have invested many hours and much creativity into devising a wide range of Google-based parlor games and curiosities. Here's a sampling, courtesy of Google and Cameron Marlow at MIT's Media Lab.

Googlewhack Find two words which, when combined in a Google query, deliver one and only one result. www.googlewhack.com claims that it has recorded 120,000 whacks since January 2002. Among recent entries to its "Whack Stack" are prevarication pileups and hiccupping flubber. (A Fast Company original: defamatory meerkats.)

Googlebomb Geek terrorism. Taking advantage of a Google loophole, Googlebombers gang up to mass-hyperlink a target page with a specific (usually derogatory) phrase. Google picks up on the links, even if the phrase isn't on the page itself. The legendary first, incited by Adam Mathes in April 2001, tagged Mathes's friend Andy Pressman's site with the words "talentless hack." For a while, it stuck.