5.4. THE ELUSIVE BUSINESS PLAN
The Google guys initially had a rough time coming up with a workable business plan. In 1999, the company was burning through its venture capital reserves without a clear strategy to generate revenues. It wasn't until early 2001 that they came up with the concept that would work.
As much as they disliked the idea, Larry and Sergey realized that advertising was a necessary part of their business model. Eventually, Google's management understood it had two core businesses, search and advertising. Search originally was a technology, not a business, but by servicing other sites, such as Yahoo! and AOL, it converted to a business. Search has gradually morphed into a portal as well, a website from which users can establish a home page, Gmail, and legions of other conveniences that connect them to the Internet but also keep them within Google. Advertising, every bit as complex and important as search, provides about 99 percent of Google's income.
Most Googlers now see the organization as a technology-driven media company. Google isn't so different from a magazine, newspaper, or television station. Content or programming, or in Google's case, search, is the lure. Advertising connected to the service provides the income. Many great fortunes, including those of Ted Turner, Michael Bloomberg, and Steve Forbes, have been built on advertising.
Nevertheless, as time went on, Google's business plan seemed more and more mysterious, even chaotic. Intel's Andy Grove ...