The Google Way: Revolutionary Management Strategies Behind Google's Success [Hardcover]

I usually don't read business books, but I was intrigued by the the subject of this book. Who wouldn't want to know about how Google achieved market domination, became one of the largest companies on the planet, and has vowed to "don't be evil?" (Do other companies say, we won't be evil unless it suits our purposes?)

The book was written by Bernard Girard, a French management consultant who has been observing the Google "phenomenon" for years.

It is divided into an introduction, and three sections. The sections talk about current management, putting users first, and sustainability of the current model. Business history of rife with stories of companies that dominated their market niche, but weren't able to sustain their positions. General Motors is the current example that comes to mind, but there are many.

I work in the medical area, and have run or been involved in small medical businesses for many years. I found the descriptions of the Google way to mesh with what I've have found to work in small businesses of 10 to 20 employees. I was surprised to learn that general management theory subscribes to a different set of rules for larger business. Google hasn't followed many of these bromides.

Here are the author's main points about the current Google business model:

There is a triumvirate management. This provides checks and balances, and a wider, more democratic information flow so that decisions are made on the basis of more information. It doesn't allow one person to go off on a personal tangent and take the company with him.

Every effort is made to recruit the most qualified people, particularly people with graduate degrees.

Google allows employees to spend 20% of their time on a project not approved by the company. They "trust" the employee to do something good for Google with this time, but leave much of the decision making to the employee. I would call this a form of employee empowerment.

Peer review is encouraged (democratization of the work force)

Encourage innovation. Many examples of concrete ways to implement this are given in the chapter.

Be like a Swiss Army knife. Try to make a complete tool set for most jobs that internet savvy folks will pursue.

Measure everything. Development mathematical formulas that model the real activity of the business, and monitor their outcomes on a regular basis.

Keep teams small. This improves intra-team communication, and is more efficient.

Create tools that allow teams and divisions to easily communicate (think blogs, twitter-like apps, etc.)

Learn to use simple tools in concert to accomplish big tasks (think thousands of linux blade servers running custom software to accurately model the internet, and use that model for very quick and accurate searches)

The rest of the book talks about more intangible issues, making the users first, various issues related to how the internet functions, copyright issues, sustainability of the enterprise in its current form, and others.

People who run small businesses will recognize most of these principles, and in fact already have implemented many of them. I suspect that Sergey Brin and Larry Page intuitively knew what would work best with the bright people they planned to hire for their company. They created a company that in many ways modeled a graduate school environment. Google has been successful in part because it has empowered (given responsibility to) its employees, creates tools that are used by both employees and customers, and has kept bureaucracy to a minimum. If only our government could learn the same lesson.

"The Google Way" is one of the best books I've read on the subject, and probably won't be bested until the co-founders write one themselves, detailing their algorithms.

The book begins by reminding us of how recent Google's contributions are - as of 11/97, only one of the top four commercial search engines found itself within the top ten responses in response to a search for its name. There was just too much junk returned. Yahoo was probably the best - it employed specialists called "ontologists" to check the relevance of key words submitted when a new site was submitted. Another (DirectHit) classified sites according to their cumulative use (Lycos and Hotbot still do). However, this method was vulnerable to distortion due to having several pages open simultaneously (but unviewed), as well to cheating via short programs designed to boost various sites.

Google counts the number of links from a specific site to other pages. Links coming from pages cited often are weighted more heavily. Google also considers the distance between words when a query contains several. It also gives greater value to links from sites with many incoming links and few outgoing links.

One of the main reasons Silicon Valley flourished in innovation vs. Rte. 128 in Massachusetts, per Girand, is that California bans restrictive non-compete clauses in employment contracts.

Google conducted a Dutch auction for its initial IPO, freezing out the high-priced underwriters and the games played "low-balling" the initial price. Girand, however, ended up confusing himself trying to describe the process.

Google ads are limited to 95 words, w/o banners or graphics. Sales and placement are automated, eliminating the need for sales representatives. Bidders select the maximum they're willing to pay for a key word; priority is given to whomever bids highest, but at the next lower price. By assigning advertisers higher positions based both on what they pay and the effectiveness of their ads, Google gives extra motivation for advertisers to improve their ads (and Google's effectiveness). Google also provides a means for advertisers to test various wordings. Partly as a result, keyword search prices on many terms rose 40-60% in 2006.

Google doesn't create any material - thus, it generates no conflict over ad placement vs. links to sites that might criticize whatever is being advertised, and the process can be automated.

Google search volume is boosted by allowing free Google search engines to be added to the pages of site builders (they get part of the click revenue), making Google search itself free, providing added services such as GMail, Google Earth, Google Notes, Google Trends, Google Metrics, etc. to help keep users within a click of Google revenue sources. Finally, Google is also pressing ubiquity of its services by providing software for cell-phones, GPS-connected Google Maps, major home appliances, etc.

By lowering search costs and increasing the availability of products, Google can substantially increase collective market share of niche products.

Google hiring decisions focus on getting the best from the best graduate schools, and sponsoring contests that attract the best minds. About 8 interviews (focusing on real-world Google problems) are required. Until recently, it had about one HR person per 14 employees. However, now that its hiring binge is over, this is being cut to something closer to an industry norm of about 1:100.

Finally, Girard tells readers that Google uses small teams - no more than six. This helps ensure the group is given a defined task that it accomplishable within a relatively short time.

My only wish is that Girard went on to explain the business model, if any, behind Google's massive and controversial book copying effort.

This fawning portrait of Google's management and organization proves to be a quick read, but its message is rather muddled: the author finds himself often reiterating how what works for Google may prove unique to Google and inapplicable to nearly every other company. He mostly finds Google's management flawless, erecting only token strawmen to knock down in the course of his analysis.

The section on threats to Google's continued success was interesting: the list of threats was fairly solid, although the analysis of those threats was lacking in both depth and credibility.

Ken Auletta's "Googled: The End of the World as We Know It", while far from perfect, proved to be a far more insightful look at both Google's success and the obstacles it will face in the future.