Can Google Stay Google?

Still, it's likely that individuals at Google will have a harder time feeling they can have an impact on the company now that it has thousands of people, not hundreds. And many talented individuals will surely leave for startups once Silicon Valley discovers its next big thing. Some of the people who stay will find motivation harder to come by once their stock grants vest and they no longer need to work to make a living or even to buy real estate in the nation's least affordable housing market. At Microsoft in the '90s, engineers and marketers took to wearing buttons around the office that said "fuifv." You can guess what the first two letters stand for. The last three meant "I'm fully vested."

Brin doesn't have firsthand memory of much Silicon Valley history -- for the benefit of business experience, he says he turns to his board members, including new recruits CEO Paul Otellini from Intel and CEO Art Levinson from Genentech. Before Google, he says, "I never had a real job." But he does mention Microsoft as a case study for compensation policy. "The options were great as long as the stock was rising," he says. "Compensation is important, but it's not the only or the most important reward."

Right now, Brin and Page can afford to share the wealth -- not only are they both multibillionaires, but Google's $1 million in revenues per employee is high for any company, and it beats even key competitors. At some point, though, the stock isn't going to be a trump card for running the company. That means the challenge and meaningfulness of the work is going to be Google's best hope for thriving in the long run. To keep up its extraordinary success, Google must do more than simply follow its slogan "Don't be evil." It has to be inspiring and good.

Learning From the Past

What can Google's founders learn from the ghosts of SGI that wander the campus they've taken over? SGI's decline came when Intel's hardware and Microsoft's software ultimately began to catch up to its own. In Silicon Valley, it's hard to keep a lead for long. SGI tried for a second act with what was known in the early and mid-1990s as the "information superhighway," but it bet wrongly that interactive TV was the form it would take. SGI's founder, Jim Clark, left -- and bet correctly that the "infobahn" would be the Internet. He cofounded Netscape and began the Web stock boom.

Google's head-to-head rivals -- Yahoo and MSN -- are already starting to catch up to its technology, at least in the crucial basics of search. Google's indirect rivals, such as Amazon.com, are imitating it, too: Amazon's shrewd founder, Jeff Bezos, realizing that search is vital for how people find what they want to buy, has created his own search engine, A9.com. Google, for its part, has been busily imitating Yahoo and MSN by offering more of the features -- such as email, news, groups, shopping, and personalized starter pages -- that it needs to become a full-fledged Web portal. For the next few years, the Web's manic growth should provide plenty of opportunity for all of these sites, which have already established good brands and created a kind of Web power oligarchy together with eBay and America Online (which pays Google to power the searches on its site).

Among the several portals, Google's most obvious competitive advantage is that people prefer it for search, probably because it has built its reputation specifically around the technology. It led in the United States with 47.3% of Web searches in the month of May compared with Yahoo at 20.9% and MSN at 13.6%. But where Google's business really stands out is as a huge advertising network: On other Web sites, when you see text advertisements that are triggered by keywords from the content of their pages, the odds are that those ads are powered by Google, which profits from every click. This "Google Network" accounted for around half of the company's $3.2 billion in revenue last year.

Despite Google's incredible share and momentum as an advertising network, there's nothing stopping another big player, like Yahoo or Microsoft, from making big inroads, too. For the longer run, what Google needs is to come up with the next awesome leap in technology -- something that's as addictive and inspiring as Google itself was when it hit big. What's more likely, though, is that someone new -- maybe some other grad students at Stanford -- will do to Google what Google did to Microsoft and the other powers. Like Microsoft, Google is rich now, and it can pay for highly credentialed talent and use some of its spare billions of stock value to acquire any number of smaller companies that have promising technology or pose a potential competitive threat. But there's never a substitute for that great new idea. So far, at least, the Google guys are doing the right things in terms of creating a culture for hatching and nurturing it. But to be a hot company in 2015, they're going to need to find -- and keep -- the next Sergey Brin and Larry Page.

Sidebar: Do You Realize That Google Has Ads?

Google's motto is "Don't be evil." Its revenues come mostly from selling advertising in the form of the paid search results running down the right side of the Web page. In response to pressure from consumer advocates, these are labeled as "sponsored links." Still, according to a recent Pew Trust survey, only 38% of people realize the difference between paid and unpaid search results. That might seem surprising, but it fits the pattern of other innovative forms of advertising that have emerged in the past generation: Studies show that it has taken many years for most people to grasp that "infomercials" are different from regular TV programs and that brands shown in movies are paid product placements. Once consumers wise up, the gimmicks lose much of their impact. Google's ads are unusually effective because most people don't realize they are ads. Is that evil?

Alan Deutschman is a Fast Company senior writer based in San Francisco.