When Google Wanted To Sell To Excite For Under $1 Million — And They Passed(techcrunch.com)
techcrunch.com
When Google Wanted To Sell To Excite For Under $1 Million — And They Passed
http://techcrunch.com/2010/09/29/google-excite/
11 comments
You're only ever a visionary in retrospect. Make that a "confirmed visionary".
Reminds me of a friend of mine when we were younger. When asked what he did, he replied, "I'm a rock start. But nobody knows it yet".
Reminds me of a friend of mine when we were younger. When asked what he did, he replied, "I'm a rock start. But nobody knows it yet".
I tend to remember that period as search really sucked, Webcrawler, Lycos and the rest where really bad. Alta Vista was the best and it was only the leader by a thin margin.
Anyway, From the day Google hit the market, and their searches actually returning something even remotely close to what you where looking for seemed like voodoo. Google exceeded the "remotely" part by usually hitting the nail on the head. Given the fact that their algorithm was not known it was not being manipulated like people try to do today. Search results where actually better back then then they are today.
Anyway to get to the point, I don't think there where too many people that thought Google was going to be anything short of "the" search engine. At lest those at the grassroot level.
I think this is the case of a executive dismissing the technical merit of a competitors product, when the other offerings where so abominable that technical merit counted.
When things are close you can win out on branding but this was a case of the buggy companies not seeing the horseless carriage decimating their market while the guy on the street could see the advantage of the new offering clearly.
Anyway, From the day Google hit the market, and their searches actually returning something even remotely close to what you where looking for seemed like voodoo. Google exceeded the "remotely" part by usually hitting the nail on the head. Given the fact that their algorithm was not known it was not being manipulated like people try to do today. Search results where actually better back then then they are today.
Anyway to get to the point, I don't think there where too many people that thought Google was going to be anything short of "the" search engine. At lest those at the grassroot level.
I think this is the case of a executive dismissing the technical merit of a competitors product, when the other offerings where so abominable that technical merit counted.
When things are close you can win out on branding but this was a case of the buggy companies not seeing the horseless carriage decimating their market while the guy on the street could see the advantage of the new offering clearly.
Anyway to get to the point, I don't think there where too many people that thought Google was going to be anything short of "the" search engine. At lest those at the grassroot level.
If that was the case, someone would have snatched them up, especially given the ridiculous valuations companies were getting in 1999.
If that was the case, someone would have snatched them up, especially given the ridiculous valuations companies were getting in 1999.
By 99 the market was beginning to turn, the acquisition period was behind most companies and it was beginning to look like a duck and cover environment. I would imagine that this is why they decided to pass on the purchase. It was the beginning of the end by that point.
While stocks where still climbing into 2000, I remember venture money becoming very scare in 99. In mid 99 there was a brief downturn and then stock rallied to astronomical levels through the end of 99 into 2000. I remember that brief blip as serving as a writing on the wall that the party was almost over. Things tightened up at a lot of places right after that event.
So while valuations where up, acquisitions and new ventures where down significantly. That was an strange time to be in the industry, because it seemed like everyone knew it was coming, but no one wanted to dare utter it.
While stocks where still climbing into 2000, I remember venture money becoming very scare in 99. In mid 99 there was a brief downturn and then stock rallied to astronomical levels through the end of 99 into 2000. I remember that brief blip as serving as a writing on the wall that the party was almost over. Things tightened up at a lot of places right after that event.
So while valuations where up, acquisitions and new ventures where down significantly. That was an strange time to be in the industry, because it seemed like everyone knew it was coming, but no one wanted to dare utter it.
about the voodoo, i only started using google years after googling became synonym for searching the web. i kept using yahoo because yahoo was good!
and when gmail first came and was invite only, it made me resent google even more, they felt snobish!
a long time later i started to like them and ironically, its gmail quality that made me a believer in google
google make most of their money from ads, only time will show how long will they go, not that it matters much, because i believe you dont have to be successful for ever, becoming no 10 after you were no 1 for 20 or so years is ....
well, we can talk about it, but they lived it!
and when gmail first came and was invite only, it made me resent google even more, they felt snobish!
a long time later i started to like them and ironically, its gmail quality that made me a believer in google
google make most of their money from ads, only time will show how long will they go, not that it matters much, because i believe you dont have to be successful for ever, becoming no 10 after you were no 1 for 20 or so years is ....
well, we can talk about it, but they lived it!
Funny, in contrast I almost always appreciate seeing stories like this, if only because they're good reminders of attribution bias.
Many of the startup entrepreneurs I know spend an unfortunate amount of emotional energy beating up on themselves for not having created Facebook/Twitter/name-your-favorite-uber-success-story here.
It's good to be regularly reminded that smarts and incredible work ethic are necessary but not sufficient for that kind of epic-level startup success.
Many of the startup entrepreneurs I know spend an unfortunate amount of emotional energy beating up on themselves for not having created Facebook/Twitter/name-your-favorite-uber-success-story here.
It's good to be regularly reminded that smarts and incredible work ethic are necessary but not sufficient for that kind of epic-level startup success.
Sure, hindsight is 20/20. But that same CEO of Excite also paid close to $1B for Blue Mountain.
their willingness to sell for $750k makes me wonder if they were the visionaries then that they appear to be now.
Or perhaps they had more than one idea, and selling a preliminary collection of search algorithms to reduce personal financial pressure made sense to them given the high-risk nature of the market they were playing in.
Or perhaps they had more than one idea, and selling a preliminary collection of search algorithms to reduce personal financial pressure made sense to them given the high-risk nature of the market they were playing in.
Yeah, that sounded more derogatory than I meant. I just mean they weren't as invested in the vision of Google as they appear to be now, which I think is part of their value.
Who cares? Google 1999 was not what Google 2010 is. Google 1999 was a slight improvement (yet to be seen) on what Excite had built search engine-wise but not what Excite was portal-wise. Look at their history: http://www.google.com/corporate/history.html
You can see this occurred before the $25m round of financing which Kleiner Perkins was a part of. So at the time it was a money losing PC-Magazine declared "search engine of choice" operating out of a garage competing in a space with Excite, Yahoo, Altavista, and many others. Google was not a business, really, until October 2000 with the launch of the incredibly successful adwords. Prior to that search was a money losing venture.
You can see this occurred before the $25m round of financing which Kleiner Perkins was a part of. So at the time it was a money losing PC-Magazine declared "search engine of choice" operating out of a garage competing in a space with Excite, Yahoo, Altavista, and many others. Google was not a business, really, until October 2000 with the launch of the incredibly successful adwords. Prior to that search was a money losing venture.
They may not have had revenue in 1999 but they were by far the best search engine. Prior to discovering them I was using altavista, lycos, and when really frustrated, a random 3rd search engine. I quickly switched to exclusive google use within a very short time of finding the service. This was a company to be excited about because they were miles ahead of the entrenched competition.
If excite didn't see value in them it's because they were too busy pushing their portal garbage (along with everyone else).
If excite didn't see value in them it's because they were too busy pushing their portal garbage (along with everyone else).
Even if they did sell, there's a chance that they wouldn't be as successful as today. Perhaps them NOT being locked down by some control-freak VC firm is what lead to increased success ?
Back then, if I'm not mistaken, VC firms (like the one in the story) were much more "controlling" than they are today. So, in my opinion I don't think that Google would have been as successful as they are today.
Back then, if I'm not mistaken, VC firms (like the one in the story) were much more "controlling" than they are today. So, in my opinion I don't think that Google would have been as successful as they are today.
There's a chance? Remember, Google was years away from their breakthroughs in scalability and AdWords. Excite purchasing Google would have simply killed it before it got off the ground. Larry and Sergey just wanted a payday. They would have stuck around for the requisite 2 years or whatever and then bailed to start something else.
It would have been funny for the Google guys to send George Bell a really nice bottle of wine on the Google IPO date with a note that said "Thanks George...we couldn't have done it without you."
Or would this have just been mean?
Or would this have just been mean?
What's also interesting to think of is all the other potential multi-billion dollar businesses that do not exist today because of early acquisitions? Delicious? We sold Auctomatic at a time when building on the ebay platform and ecommerce generally was seen as 'dirty' (this was 2007-2008), I often wonder what we could have made of it if we'd stuck with it.
An example of Excite's bad business judgment that matches its bad search ranking algorithms of the time.
After edit: not knowing what has motivated the downvotes, I'll note for the record that I was an active researcher on the Web at the time, and right from the beginning it was noticeable that Google returned much better search results than Excite did. Excite had some rules about ranking search results that actively penalized pages with relevant content compiled by page authors who weren't spamming. And despite efforts not to be subject to spamming (Excite was not the worst available choice at the time, and was once one of my top-three search engines), Excite could be fooled by spammers. As soon as Google came on the scene, a lot of serious researchers rapidly abandoned Excite, and Excite certainly suffered from a precipitous drop-off in favorable word of mouth from general consumers once Google was on the scene.
After edit: not knowing what has motivated the downvotes, I'll note for the record that I was an active researcher on the Web at the time, and right from the beginning it was noticeable that Google returned much better search results than Excite did. Excite had some rules about ranking search results that actively penalized pages with relevant content compiled by page authors who weren't spamming. And despite efforts not to be subject to spamming (Excite was not the worst available choice at the time, and was once one of my top-three search engines), Excite could be fooled by spammers. As soon as Google came on the scene, a lot of serious researchers rapidly abandoned Excite, and Excite certainly suffered from a precipitous drop-off in favorable word of mouth from general consumers once Google was on the scene.
I want to know why Google wanted to sell to Excite.
My guess is that they were a bit stressed out that they weren't really hitting jackpot at the time, especially as they are today. It was early 1999, they didn't really have that many good income sources at that moment(if I'm not mistaken, they didn't even have Adsense launched back then).
They went to these guys wanting to cash out and probably lay low for a year or two ... after which I'm sure they'd be back on their feet with something new.
They went to these guys wanting to cash out and probably lay low for a year or two ... after which I'm sure they'd be back on their feet with something new.
Well Google truly is a garage story. Google the search engine existed before Google the company. If my memory servers me correctly there new found success caught them off guard, it happened faster than they expected. They had to incorporate and scramble for funds just to keep up with the volume that was increasing day by day. I would imagine that a sale would net them the infrastructure they desperately needed.
What would be really interesting would be to know why they wanted to sell. Did they not see much future in it? Were they simply tired of working on it, after several years in grad school?
At the time building search engines wasn't seen as sexy or profitable. I also don't think they had much interest in running as business.
Thank goodness they didn't sell. Their rejection narrowly avoided them becoming another "dipshit" company and forced them to build something great.
nice example of how luck is a factor in business success
EDIT: Although, I bet that scooping up the founders would have made it worth it, though their willingness to sell for $750k makes me wonder if they were the visionaries then that they appear to be now.