The True Story of the Internet- Internet Search Part 2

Before web search engines, the way to search for information was to click through link after link, like tugging on knots of a never-ending rope. This would be the only method until two electrical students at Stanford University, Jerry Yang and David Filo, began working on a way to aggregate data to leverage in their fantasy basketball league. In its beginnings their data from various websites were compiled manually into categories and sub-categories onto their website. They gained much popularity online and chose a catchier name, Yahoo!. Thanks to their popularity they caught the eye of famous venture capitalist, Michael Moritz, from successful firm, Sequoia Capital. Without having a business model to make money from their website, Moritz pushed the idea of advertising, which had traditionally served as the main funder of other media formats such as print. Although concerned about alienating their user base on an Internet that had not yet been commercialized, Yang and Filo decided that advertising was the best way to monetize their popular website. They implemented banner ads on Yahoo! and despite their concerns, their user base continued to grow along with the revenue and interest from advertisers.

Yahoo’s first major competitor was Excite, who had a superior method of aggregating data. As opposed to Yahoo’s manual sorting and categorization of different websites, Excite used software to search the entire web for pages that matched terms in queries generated by users. Both Yahoo and Excite, along with other similar sites known as “portals”, expanded the content and services accessible from their site to make them the first place Internet users would go. The need to be competitive and have the edge over one another search engine companies generated new features and services all the time, rapidly evolving the way people used the Internet.

In this mad pursuit for features many search engine companies forgot to innovate their main attraction: their search feature. The ones to push the innovation of the search feature once more were the founders of Google, also a pair of Stanford students, Larry Page and Sergey Brin. Google’s search engine was built around the idea that the number of times a site was linked to by other sites could be used as an indicator for usefulness or relevancy. Using this they could combine the term matching of the search engines that had come before and combine it with this new way to sort search results for relevancy, bringing users the most linked to sites that matched their queries. Their instant popularity was overwhelming and caused Stanford, who initially hosted Google, to kick the search engine off-campus due to the insane amount of traffic put through Stanford’s network. Excite turned down the opportunity to purchase Google a million dollars, as did many other tech companies at the due to the industry-wide perception that not much money was to be made in search engines as all search engines were nearly indistinguishable. Google would later be funded by venture capitalists John Doerr and Michael Moritz, with both contributing a combined $24,000,000.

While they had difficulty, founders ,Larry Page and Sergey Brin, refused to simply to resort to generic banner ads that would reduce the user’s experience. The solution to Google’s monetization came from another company IdeaLab and Bill Gross’s idea to use search queries of users to generate marketing data, called keywords. Bill Gross started successful search engine Overture which would be based on keywords and have sponsored links. Google would try to negotiate a merging of services with Overture but would eventually walk away from the meetings empty handed. Instead Google introduced Adwords which was basically a copy of Overture’s monetization model, so Overture sued Google and they came to significant settlement out of court. With the question of monetization out of the way, Google’s ascent to the top as a billion-dollar company was assured. Google continues to this day to use its massive gains and data index to expand features and put pressure on its competitors like Yahoo! and Microsoft.

Disclaimer:

This is a summary of a video written by an inept college student and is subject to change and/or being completely wrong.