Overview of Google
I recently realized that Google now provides definitions if you type define:word in the search. This is interesting to me because I was once looking from something like this when I developed my vocabulary website WordMingle. I also realized today that you can search for flight information on Google by typing the two airports in the search. For example, you search for “lax nyc” and the first thing that comes up is the flight/travel links. Google has a ton of neat features and functionality and here is a short overview of Google.
In brief, search engines before Google ranked results according to how many times the search term appeared on a page. In 1996, Larry Page and Sergey Brin, two Ph.D. students at Stanford University, wanted to create a search engine that would analyze relationships between websites and thus, produce better search results. In the beginning, the search engine ran on the Stanford University website with the domain google.stanford.edu. Later, on September 14th, 1997, the domain google.com was registered and the company was incorporated on September 7th, 1998.
The initial investment into Google was around $1.1 million. Google started selling ads with search keywords in 2000. On August 2004, Google went public opening at $85 and finishing the day at $100. In the next three months, Google stock hit $200. Seven months later, the stock hit $300. Five months after that it hit $400 on November 17th, 2005. As you can imagine, many Google employees are millionaires just from the stock options. Today, the stock is at $500 and a lot of investors believe that this is not a crazy price. In fact, Google shares expect to hit hit $550 soon and other analysts believe Google will hit $600 within the next year. Some people await a stock split before investing but Page and Brin have clearly explained that they have no intention of splitting the stock to create a lower per-share price that appeals to more Main Street investors.
Why is a search engine making so much money? So, Google is mainly a good search engine with a clean and simple design. But, obviously that is not all. Google also has Froogle, Google Groups, Google Scholar, Blog Search, Google Maps, Google Moon, Google Mars, Google Ride Finder, Google Transit, Google Earth, Gmail, Google Talk, Google Video, Google Calendar, Google Page Creator, etc. Smaller Google projects are contained on the Google Labs website. Next, there are a ton of acquisitions like the purchase of YouTube or JotSpot. In fact, YouTube was purchased for 1.65 billion USD in Google’s stock. And, obviously, let’s not forget the advertising. Internet advertising reached a new high of $4.2 billion in the third quarter, marking the eighth consecutive quarter of growth, according to a study released Tuesday. In August 2006, Google signed a $900 million deal with News Corp.’s Fox Interactive Media unit to provide search and advertising on MySpace and other News Corp. websites including IGN, AmericanIdol.com, Fox.com, and Rotten Tomatoes.
Random Facts:
Google had 9,378 full-time employees as of September 30, 2006 and is based in Mountain View, California.
Google Revenue in 2005 was 6.138 Billion and Net Income in 2005 was 1.465 Billion.
This information was mostly compiled from Wikipedia and if you are interested in a nice list of Google Products go to Wikipedia.
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I believe Google did their stock option expensing properly since the ipo as well so all of the options have already been taken out of income.