Google Incorporated 1998
Google began at the nation’s greatest technical incubator, Stanford University, as a research project by Ph.D. students - Larry Page and Sergey Brin. Work on what would become the Google search engine started in 1996. The project was called the Stanford Digital Library Project (SDLP). The project was originally funded by a number of government agencies including the National Science Foundation. They developed an early search engine called “BackRub.” It was not the first; in fact, Excite, WebCrawler, Lycos, Infoseek, and OpenText were already on the Internet. Carnegie-Mellon University’s Lycos was then the most used search engine on Netscape’s list, even though Infoseek was its default search engine on Netscape. These early search engines were viewed as software to be licensed or sold, not as money ventures. The rise of Google was due to its business model versus its technological advantage. The history of the search engine is almost as old as the computer itself. The source of commercial search engines can be traced to Stanford University long before Google. The Internet directory and server, Yahoo, was formed by two Stanford students, David Filo and Jerry Yang in 1994 and was incorporated in 1995 with $2 million in venture capital. Yahoo functioned as a full service Internet provider with a search engine by license from others. Even earlier, a group of Stanford undergraduates had developed a search engine using statistical analysis of word relationships in 1993. The software was released and evolved into the company known as Excite. At the time no true business model for making money from search engines had emerged except to sell to, license to, or develop an Internet service. In many cases, search engines were offered free from Internet providers. Lycos was a major search engine developed by Carnegie-Mellon University students, which was used freely on the Internet, but also developed into a service company. By the late 1990s, new ideas to make money from search engines emerged. In the year 1996, AltaVista and Inktomi Corporation were advancing search engine technology. AltaVista was the first to allow for natural language queries as well as advanced search methods using Boolean logic. Inktomi had a search engine known as Hotwire, which included the best technology and the beginning of a new business model. There was a great deal of search engine software available, but the commercial rewards seemed few for further development. Inktomi saw the possibility of commercial gains by charging a flat or recurring fee for commercial websites (Paid Inclusion). While Inktomi pioneered paid inclusion, the market was not yet big enough to support it. Some search engines were using pop-up advertisements with limited success. In 1998, Bill Gross, founder of Overture (initially known as GoTo.com), developed a pay per click business model for his search engine. The idea was that advertisers paid a fee when their websites were clicked on after an Internet search. These are known as sponsored ads. The idea generated a great deal of appeal to advertisers who were used to broadcast advertising on TV. Pay per click assured the audience was being individually targeted. Google would eventually adapt to this model and expand its application to targeted audiences. However, the success of Overture initially showed the possibility to Google and potential investors of making money with search engines.
In August of 1998, Google got a loan from Stanford entrepreneur and co-found of Sun Microsystems, Andy Bechtolsheim. The next month the company formally incorporated as Google Inc. and operated out of a garage. The name came from the term of googol, representing the number 1 followed by hundred zeros. Google quickly gained a reputation as a better search engine than Excite and Hotbot. The company moved to the now famous incubator at 165 University Avenue in Palo Alto. The focus was to build user loyalty and technical