Sergey Brin and Larry Page, the founders of Google, believe that expanding their company’s lobbying operation in Washington, D.C., has become a necessity
In June, 2006, Sergey Brin, one of the co-founders of Google, went to Washington, D.C., hoping to create a little good will. Google was something of a Washington oddity then. Although it was a multibillion-dollar company, with enormous power, it had no political-action committee, and its Washington office had opened, in 2005, with a staff of one, in suburban Maryland. The visit, which was reported in the Washington Post, was hurried, and, in what was regarded by some as a snub, Brin failed to see some key people, including Senator Ted Stevens, of Alaska, who was then the chairman of the Commerce Committee and someone whose idea of the Internet appeared to belong to the analog era. (He once said that a staff member had sent him “an Internet.”) Brin told me recently, “Because it was the last minute, we didn’t schedule everything we wanted to.” It probably didn’t help that his outfit that day included a dark T-shirt, jeans, and silver mesh sneakers.
Brin did meet with Senators John McCain and Barack Obama, and they spoke about “network neutrality”—an effort that Google and other companies are making to insure that the telephone and cable companies that provide high-speed access to the Internet don’t favor one Web site over another. Around the time of Brin’s visit, an organization called Hands Off the Internet, financed in part by telecommunications companies, ran full-page newspaper advertisements in which it accused Google of wanting to create a monopoly and block “new innovation”; one ad featured a grim photograph of a Google facility housing a sinister-looking “massive server farm.” Brin recognized it as a warning. “I certainly realized that we had to think about these things, and that people were going to misrepresent us,” he said. “We should be entitled to our representation in government.”
Google’s ambitions had not gone unnoticed by its competitors. What Google had created—an ingenious tool for searching the Internet—had evolved into something almost unimaginably far-reaching. The company’s mission is “to organize the world’s information and make it universally accessible and useful.” Making information “universally accessible,” though, is an ambitious goal that often clashes with those whose business is to own and distribute it.
In October, 2006, Google outbid Microsoft and the News Corporation to acquire YouTube, the dominant online video site. Alarms went off: Hollywood media companies feared that YouTube was hijacking television viewers by downloading their programs; and, last March, Viacom filed a billion-dollar lawsuit against Google for copyright infringement. Earlier, Google had declared that it wanted to digitize all the world’s books, including those under copyright. Despite Google’s assurances that it would protect authors and publishers, the company was unable to allay the fear that digitization would eventually cheapen the value of the books; and publishers and writers expressed concern that Google would profit from book searches without sharing the ad revenue. Newspapers were unhappy that Google was luring away readers and advertisers. And Microsoft, the world’s mightiest technology company, feared that Google was becoming too powerful—that it was designing Web-based software applications similar to Microsoft’s Office. (Microsoft sells Office in packages that reportedly produce profit margins of about seventy per cent.) Google already offers similar software—word processing to compete with Microsoft Word, spreadsheets, e-mail, instant messaging, managing business data and contacts, PowerPoint-like-presentation software, personal calendars—that is Web-based and, for the most part, free. Google calls this “cloud computing,” meaning that anyone with an Internet connection can store data in this “cloud” and retrieve it from any location.
In response to prodding by consumer activists, some government officials—notably Senator Herb Kohl, a Wisconsin Democrat—have begun to ask: Does Google, which today is among America’s ten richest corporations, with a market value of just over two hundred billion dollars, have too much power? (ExxonMobil, valued at just under five hundred billion, is No. 1.) Unlike Microsoft, which in 2000 was found guilty of anti-competitive behavior, a finding upheld in a federal appellate court, Google has not been charged with violating any laws. But there has never been a company whose influence extended so far over the media landscape, and which had the ability to disrupt so many existing business models. And its competitors share a vague worry that Google is more or less out to rule the world. All this attention unsettled Brin and Larry Page, Google’s co-founder.
In its 2004 annual report, Google, amending its basic corporate strategy, officially signalled its intent to be more than a search engine. The company announced that seventy per cent of its efforts would continue to be directed to its “core” mission, “our web search engine and our advertising network.” Another twenty per cent of its energies would be devoted to “adjacent areas such as Gmail”—the free e-mail accounts available to just about anyone who wants one—and the range of software that falls under the heading of “apps.” Finally, the report said, “the remaining 10 per cent is saved for anything else, giving us the freedom to innovate.” To other media companies, this sounded suspiciously like declaring, “We are in the search business, but we might be in your business.” Last spring, Google bested Microsoft, Yahoo, and the enormous advertising-marketing firm WPP to buy DoubleClick, the online advertising and marketing company. DoubleClick claims up to twelve billion daily transactions. Even without it, Google has amassed one of the world’s largest databases—a resource that has helped in altering its mission. “We are in the advertising business,” Eric Schmidt, Google’s C.E.O., told me not long ago.
Marc Andreessen, who helped create the first Web browser, Mosaic (which became Netscape), and who today is an Internet entrepreneur, says, “The game plan is to do everything. Google is Andy Kaufman”—the late, enigmatic comedian. “The whole thing with Andy Kaufman was you could never tell when he was joking. Google comes out with a straight face and says, ‘We’re just going to be a search engine. We’re not going to be doing any of this other stuff.’ But I am quite sure they’re joking.”
Google, which is based in Mountain View, California, now accounts for just over sixty per cent of the world’s Internet searches, and its power comes from the data it collects from all those searches. When a search is done on Google, a “cookie,” or fingerprint, is created and stored in the browser of the computer being used. It records what you’re looking for and what you read or simply what you’re curious about. Your search query is stored by Google for eighteen months. Over time, Google might be tempted to extract more and more user data to better target ads. This year, Google’s ad revenues are expected to reach sixteen billion dollars, approaching the combined national advertising revenues of the four major broadcast networks. The purchase of DoubleClick, for a proposed $3.1 billion, has only heightened anxiety about Google.
Google’s executives have become wiser about the company’s image. “The product brand was very strong,” Alan Davidson, Google’s senior policy counsel, who is a computer scientist as well as a lawyer, and who oversees Google’s Washington office, told me. “The political brand was very weak. Because we were not here to define it, it was being defined by our enemies.” He paused a moment, and added, “ ‘Enemy’ is a strong word. It was being defined by our competitors.”
The modest one-man operation in Washington has expanded considerably and now includes about thirty people, among them Robert Boorstin, a former speechwriter for President Clinton; Johanna Shelton, a former senior counsel to Representative John Dingell, chairman of the House Energy and Commerce Committee; and Pablo Chavez, a former chief counsel to John McCain. In October, 2006, the company established its own PAC, called NETPAC, and since then it has hired three outside firms to lobby on its behalf: the mostly Democratic Podesta Group; King & Spalding, where Google works with former Senators Connie Mack and Dan Coats, both Republicans; and Brownstein Hyatt Farber Schreck, which hired Makan Delrahim, the former Deputy Assistant Attorney General in the Bush Justice Department’s Antitrust Division.
“We’ve been under the radar, if you will, with government and certain industries,” David Drummond, a Google senior vice-president, observes. Drummond, who is based in Mountain View, oversees all the company’s legal affairs. “As we’ve grown, we’re engaging a lot more. We’ve had to put a lot more emphasis on engaging.” Google’s Washington office reports to both Drummond and Elliot Schrage, the vice-president for global communications and public affairs, who is also based in Mountain View, and one of its immediate tasks has been to address the privacy issues raised by the proposed acquisition of DoubleClick. “Privacy is an atomic bomb,” a Google executive who does not want to be identified says. “Our success is based on trust.”
By the end of 2007, Google’s overriding concern was that it avoid comparisons to the Microsoft of 2000. “No question that people here regularly discuss Microsoft’s experience and use that as a cautionary tale,” Schrage says. Brin says, “Microsoft is a bit of an unusual company. It doesn’t seem to like any of us being successful in the technology space.” This summer, Microsoft and Google competed for a small stake in the social-network site Facebook; in October, Microsoft won that competition, paying two hundred and forty million dollars for 1.6 per cent of the site, whose profits were meagre but which has about sixty million active users and competes with Google as a home page. When I met Facebook’s founder, Mark Zuckerberg, for dinner in Palo Alto, Zuckerberg, who is twenty-three, sipped lemonade and chose his words about Google carefully, saying, “On the highest level, we’re both trying to supply people with information that interests them.”
Andy Grove, the former chairman and C.E.O. of Intel, who was an enthusiastic supporter of Google’s founders when they started the company, in 1998, believes that there may be more worry about Google than there was about Microsoft. “Microsoft’s power was intra-industry,” he told me. “Google’s power is shaping what’s happening to other industries.” Because of this, he says, Google is increasingly seen as a company “on steroids, with a finger in every industry.”
The Google story, like the rise of Microsoft—or the Beatles—has already become a legend of popular culture. In 1995, Brin and Page, graduate students at Stanford, figured out a way to scan and index the Internet. Earlier search engines had done this, but Brin and Page did it better. By 1998, they had incorporated Google, coming up with a company name that suggested the audacity of their ambition. (“Googol” is the math term for the figure 1 followed by a hundred zeros.) And they came up with an informal company motto to signal their benign intent: “Don’t be evil.” In 1999, when Marissa Mayer was hired as the first female engineer and the nineteenth Google employee, the entire Google search index, she says, “was thirty million pages, and we did four hundred thousand searches my first day.” Today, it reaches billions of pages. And, according to ComScore, Google does an estimated four hundred billion searches a year.