The hit factory

It was launched by two students in a garage seven years ago. Today, it is the planet's gateway to the internet and is valued at $15bn. But could the Google phenomenon crash as spectacularly as it was born? Charles Arthur investigates

In California, a boy types his name into a computer and discovers that his mother abducted him from Canada after a failed custody fight with his father 14 years ago. A man cannot find a book he wants through the online bookstore Amazon, so he types the title in another site, and is directed to the Amazon page with the book he wants. A security expert asked to test a bank's website starts with a search engine, and finds a spreadsheet with 10,000 credit card numbers belonging to the bank's customers. A government seeking to make a case to attack a country on the basis of its weapons of mass destruction finds a PhD thesis that fits the bill on the web.

All are true cases culled from the recent past. And you already know the name of the site all four used: the search engine Google. It has entered the language; to "Google" someone or something means to use the website to investigate them using the most powerful search tool developed in the past half-century. It has transformed love lives, shopping, and especially - to the delight of connected children - homework. (And, it must be admitted, journalism, where instant expertise about anything is suddenly only a search box away.)

Yet even while we might feel that Google is an ineluctable part of the infrastructure of our lives, its founders, the Stanford graduates Sergey Brin and Larry Page, are preparing for what could be their toughest year since they unveiled their minimalist website to the public in 1998. Then, amidst dot.com mania, it stood out: a web page without fanfare, stock quotes, news tickers or weather reports, completely against the grain of the boom that had sucked them out of their own PhD studies at Stanford University and into the wider world.

Now, it is the target of rivals that want to supplant it in our browsers, such as Yahoo! and Microsoft (which is rumoured to have bid $10bn for the company last year; though Bill Gates has said, "We've never been in any talks with Google about any acquisition thing in any way, shape or form"). And it is readying itself to float on the stock market with an offering that could value it at anywhere between $15 and $25bn.

And Google has just got bigger. Last week it announced that it now covers more than six billion items - 4.28 billion web pages, 880 million images, 845 million "Usenet" newsgroup postings, and a growing number of book-related pages in non-web formats. That's a near doubling against this time last year. The reason is simple, says a Google spokeswoman: "Our mission is to organise the world's information and make it universally accessible and useful."

"Sergey Brin and Larry Page may go down in history as the guys who saved the internet after the ignominious blat of the [dot.com] bubble," notes George Colony, chairman and chief executive of the analysis group Forrester Research, who calls Google's search "one of the most splendid technologies on the planet right now". He adds: "I like Google. The web has gone through two major phases in its short history: pre-Google and post-Google." But he thinks the idea of its going public is "hype and silliness"; and if it does float for anywhere near $15bn, a lot of people will lose their investment. A more reasonable value, he thinks, would be about $6bn.

The expected flotation, and the rivalry, feels like a heady return to the dot.com days; some of the rumours surrounding the flotation - such as shares being offered over the Web to its millions of users - recall those days, too; lastminute.com was briefly the darling of investors for offering its shares over the net. But it fell from grace when shares plunged soon after its flotation.

Some think Google runs the same risks. "Right now, it's Google's game to lose," says Chris Sherman, associate editor of Search Engine Watch, which keeps close tabs on this multi-billion-pound business. "Search has become an extremely competitive environment, and if Google stumbles there are others ready to step into its place. But Google is so entrenched in people's minds that no amount of advertising or marketing will change it." He thinks a flotation is "inevitable"; the only question is when.

Still, even $6bn wouldn't be too shabby for a company whose founders met for the first time less than a decade ago.

"Google", as a verb, has wormed its way into our vocabularies very quickly. That's because searching for information is (and, arguably, always has been) the second most common activity on the internet. The first is e-mail, and you could argue that since more than half of all e-mail is now spam, searching is actually our prime online activity as we hunt and gather those titbits of knowledge we need in our daily lives.

According to Google legend, Brin and Page didn't hit it off when they first met at Stanford in 1995. Both were doing postgraduate work; Brin, 23, had been assigned to show Page, 24, who had just graduated from the University of Michigan, around the place. As scientists will, they soon found a common interest: how to get the best information out of a sprawling mass of data. And their idea was, why not start with the Web? By January 1996 they were working on the prototype of what became Google, called "Backrub", because it would determine how authoritative a web site was by looking at the links coming to it from other web pages, and especially from the web pages viewed by others as authoritative.

Previously, simply having the relevant words included many times on your website was enough. But that led to a miasma of pornography websites that emptied dictionaries onto their web pages, in invisibly small fonts in white text against a white background, to attract the attention of the search engines' "crawlers". The pollution of results by the end of 1998 had the search companies tearing their hair out. Google's method was simpler, because porn sites tend not to link to each other, and most ordinary people don't set up links to hothornyteens.com on their web pages. So when Google came, the flood of porn vanished from the results. Everyone breathed a sigh of relief. Apart, of course, from the porn sites.

Unable to find anyone who wanted to buy their idea, Brin and Page started the company themselves. The official opening was on 7 September 1998, and done using a remote control, because the "office" was in a garage of a friend. There was a staff of three. And right away Google was answering 10,000 search queries daily; word of mouth had spread around Silicon Valley. By 21 September 1999, it removed the "beta" (geek for "experimental") label from its website. Google was for real. At the end of the year it was being named the best search engine on the Web, principally because it was so much better than what was out there at the time. Now, it dominates. According to the research firm Nielsen/NetRatings, in December, 50 per cent of all people in the US who used a search engine visited Google at least once. By contrast, 29 per cent visited Yahoo!'s search, 30 per cent searched via Microsoft's MSN, and just 15 per cent used AOL. (In fact, AOL actually uses Google's search engine, as does the BBC.)

The rise of Google has been meteoric. Less than five years after its launch, it was part of the cultural landscape. By contrast, Microsoft was founded in 1975, but the first version of Windows didn't appear until 10 years later. And does anyone use any of Microsoft's trademarked names in normal conversation? If you go back further, to look at names such as Ford or Esso or EMI, you find their growth is so comparatively slow you almost wonder why they kept at it.

One thing that has worked in Google's favour - and which its founders espouse - is its sense of cool. The company name itself is ironic, a verb derived from the word "googol", which, we all now know - because it was the question with which Major Charles Ingram won (ahem) £1m - is one followed by 100 zeros. The company's offices now, far larger than a garage, are called the "Googleplex"; a googleplex is 10 to the power of googol. It was cool in 1998 to have an essentially empty home page when everyone else had flashing bells and whistles. And Google is still cool; earlier this year, Brin lectured attendees at the Davos conference about how one becomes, and remains, hip. "If you have to think about being hip, you're never going to be hip," he told them. (No doubt they carefully wrote it down.) He also joked that after Google, he'd like to build a detector for airports to prevent unhip people boarding planes; he only likes to share aircraft with "cool" passengers. And the company's "core values" include these: "you can be serious without a suit"; yet "work should be challenging, but the challenge should be fun". The Googleplex has rubber balls, lava lamps, giant Mondrian shapes framing the lifts, a company chef who used to cook for the Grateful Dead, and two massage therapists.

Yet rapid rises can also imply rapid falls. Google's ascendancy today was earnt at the expense of the search engine that had previously been "the world's best", operated by Altavista.com. As Sullivan explains, "the search engines [like AltaVista] that were popular in the mid-1990s took their eye off the ball. They decided that searching was taking people away from their site, and they wanted people to stay on there so they could show them adverts - 'monetise' them by being 'sticky', in the jargon of the time. So they introduced chat and news and horoscopes, and they under-invested in search. And Google came along and said, 'we're just going to focus exclusively on searching'."

But now it is expanding so fast, he says, that it is in danger of losing sight of what we want to do. It has bought a "blogging" company called Blogger, and set up a "social software" site called Orkut and now is rumoured to be setting up a free e-mail service. "I don't see what those have to do with search," says Sullivan.

One problem that Google is struggling with is "spam" sites that generate links to each other, to make themselves seem popular. Google tweaks its "ranking" system every few months to keep ahead of them - and so far, it has. But the company is clearly worried: "A small number of sites are becoming increasing aggressive in their attempts to mislead users and gain a high ranking in search engines," a spokeswoman says. Sites that do so can be banned, but that won't put the spammers off. Just as with e-mail, getting noticed is their aim.

At Forrester, Colony warns: "How long did it take you to switch to Google? Seconds. How long will it take you to switch out of Google? Seconds." By contrast, he says, "all great businesses are built on a monopoly". And nobody has that in searching. Get it wrong, and the pack will leave footprints all over your back. "Is Google's search good?" he adds. "Yes. Is the company worth tens of billions? No."

That's because it's comparatively cheap to set up a new search engine, and Google has well-funded rivals - after all, if two penniless graduates can do it, why not a well-funded company like Microsoft or Yahoo!? Secondly, says Colony, there's the fact that the Web itself is changing. Web "pages" in the future might have programs on the page, or complex new services that will integrate directly with your computer. (Microsoft has said this is an objective of its next operating system, due in 2006.) "When that happens, the usefulness of link-based search will wane," says Colony. "Simply stated, Google is very much of the times, with no advantage in the internet that lies ahead."

But there is one thing that could work in Google's favour: our laziness. As we begin measuring our time on the net in years rather than (as when Google started) months, we are used to what we do. Nearly half the people searching Google use computers running versions of Windows more than five years old. If they won't change that, they probably won't change their search page. So is Google just fortunate to have come along at the right time to embed itself in our internet consciousness? "There was a fair amount of luck in the timing," says Sullivan. "But you can't take away the fact that they came up with what people wanted." And as long as that stays true, its place in dictionaries is assured.