After reading through the introduction of Google's public stock filing, I now see that juvenile pomposity did not go out of style with the passing of the Nehru jacket. Sergey Brin and Larry Page have turned it into an art form. Too much has already been made of the company's upcoming IPO--and this just in the first week after filing--but the so-called owner's manual they co-authored opens a remarkable window into the essence of Googlism. So let's take a closer look.
Google is not a conventional company.
Kudos to Google's public relations office for bamboozling the business press, but the reality is less exciting than the myth. Remember all the cutesy-wootsy stuff that got written about ? Only years later did we learn the story was bunk. Google can claim that it's not a conventional company, but Apple, Netscape and a clutch of other one-time technology hotshots also thought that they had broken the corporate mold at some point in their histories.
We do not intend to become one.
Once Google has to begin reporting to shareholders, that kind of baloney will sound even more ridiculous than it does today.
Throughout Google's evolution as a privately held company, we have managed Google differently. We have also emphasized an atmosphere of creativity and challenge, which has helped us provide unbiased, accurate and free access to information for those who rely on us around the world.
Google's founders want to have their cake and eat it, too.
The time has come for the company to move to public ownership. This change will bring important benefits for our employees, for our present and future shareholders, for our customers, and most of all, for Google users.
Translation: Time to cash in.
Therefore, we have designed a corporate structure that will protect Google's ability to innovate and retain its most distinctive characteristics.
Here's the interesting angle. Google's founders want to have their cake and eat it, too. The real message is: "Fork over your money and trust us. We know better, and you don't get to control us." Who knows? The public has a short memory and may even go along for the ride. So soon after the bursting of the dot-com bubble, dreams of discovering the next Netscape (prior to the Microsoft death ray treatment) linger on.
In our opinion, outside pressures too often tempt companies to sacrifice long-term opportunities to meet quarterly market expectations. Sometimes, this pressure has caused companies to manipulate financial results in order to "make their quarter." In Warren Buffett's words, "We won't 'smooth' quarterly or annual results: If earnings figures are lumpy when they reach headquarters, they will be lumpy when they reach you."
Give the boys an A on rhetoric but a D on economic history. The pressure of filing quarterly earnings reports is as little responsible for the rise of the likes of Andrew Fastow and Bernie Ebbers as it is for fostering great corporate leaders like Jack Welch or Lou Gerstner. Things in the real world are quite a bit more complex.
Many companies are under pressure to keep their earnings in line with analysts' forecasts. Therefore, they often accept smaller, but predictable, earnings rather than larger and more unpredictable returns. Sergey and I feel this is harmful, and we intend to steer in the opposite direction.
High-minded idealism along with a dismissive put-down of all the lesser mortals who populate Wall Street's financial food chain. Sounds like a cross between John Winthrop's City upon a Hill speech and Zabriskie Point.
We will make decisions on the business fundamentals, not accounting considerations, and always with the long-term welfare of our company and shareholders in mind.
Well, bully for you, but save the self-serving pat on the back for something noteworthy. Your pledge restates the minimum that investors should expect from any publicly traded company.
We encourage our employees, in addition to their regular projects, to spend 20 percent of their time working on what they think will most benefit Google. This empowers them to be more creative and innovative.
Like Gmail? How about directing some of those creative and innovative folks to fix with your e-mail system? Sounds like an easy enough fix. As for Google News--which you single out as an example of the company's forward thinking--hello? It's an assemblage of links with no context. Period. From this curmudgeon's corner, I find Yahoo's news aggregation far more useful.
Because of our intense, long-term working relationship, we can often predict differences of opinion among the three of us. We know that when we disagree, the correct decision is far from obvious. For important decisions, we discuss the issue with the larger team. Eric, Sergey and I run the company without any significant internal conflict but with healthy debate. As different topics come up, we often delegate decision-making responsibility to one of us.
Whatever works, guys, though my reading of contemporary history is that triumvirates don't work very well over any extended time. (Malenkov, Beria and Molotov didn't fare so well after Stalin, but best of luck.)
We hired Eric as a more experienced complement to Sergey and me to help us run the business. Eric was CTO of Sun Microsystems. He was also CEO of Novell and has a Ph.D. in computer science, a very unusual and important combination for Google, given our scientific and technical culture.
Mr. Science has a Ph.D.? Quite impressive but, for the record, you might also have noted that Schmidt failed to get the job done at Novell and then bailed when a better job offer came down the pike.
Right now, Google's living the life of Fat City, but how will he perform when the company inevitably passes through a little turbulence? That question still hangs in the air. (In fairness to Schmidt, he's the bright bulb who had the idea of borrowing Overture's paid-search idea. Until then, Google was simply just another quaint technology floating around the Internet but with little real chance of making bank.)
|I like free stuff as much as the next schnorrer, but Google's setting a lousy precedent.|
In the transition to public ownership, we have set up a corporate structure that will make it harder for outside parties to take over or influence Google. This structure will also make it easier for our management team to follow the long-term, innovative approach emphasized earlier. This structure, called dual-class voting structure, is described elsewhere in this prospectus. In other words, "We are going to keep control, and we've rigged things accordingly." Management's Class B stock will be worth 10 votes for every one vote that you get. Slick move.
We provide many unusual benefits for our employees, including meals free of charge, doctors and washing machines. We are careful to consider the long-term advantages to the company of these benefits. Expect us to add benefits, rather than pare them down over time. We believe it is easy to be penny-wise and pound-foolish with respect to benefits that can save employees considerable time and improve their health and productivity.
They also employ the Grateful Dead's former chef to prepare the freebies--a factoid all the reporters love to write about. I like free stuff as much as the next schnorrer, but Google's setting a lousy precedent. This isn't kindergarten, and employees should take care of their own lunch.
Even Einstein in his day paid for the apple he brought to the office. I'm missing the logic that suggests that software engineers should get lifted onto a higher pedestal. If I were an investor, this would make me see red.
Don't be evil. We believe strongly that in the long term, we will be better served--as shareholders and in all other ways--by a company that does good things for the world, even if we forgo some short-term gains. This is an important aspect of our culture and is broadly shared within the company.
This just in: Mary Poppins was sighted at 30,000 feet.
We aspire to make Google an institution that makes the world a better place.
It's a SEARCH ENGINE, for Pete's sake! After you invent the cure to leukemia, you can ask the Swedish Academy to put you on the short list of candidates for the Nobel Prize.