Google and the Good News

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The four people across the conference table from me were doing their best to stay focused, but it was plain to see that their minds were drifting. Every moment or so they would glance at their laptops and then try (unsuccessfully) to concentrate on my words. Normally, I might take offense, but this was different. I was, by pure chance, in building 41 at Google in Mountain View, California for a meeting that had been planned more than a month ago. Who could have known that it would turn out to be the day that the company would announce its long-awaited initial public offering?

Even though I have nothing at stake with Google, we were all bracing for the news. It felt as if we were frozen, watching the batter, two outs, bottom of the ninth in a ball game that could go either way. The pitch finally came at 11:15 am Pacific time when Google's S-1 filing hit the Web announcing that they had made $106 million in 2003 on sales of $962 million. Minutes later CBS Marketwatch reported that the company intended to sell $2.7-billion worth of stock on the public market. Going, going, gone.

Building 41 erupted in jubilation around us. The force of labor that had been writing computer code and selling advertising round the clock let out a collective hooray (they would have yahooed, if it wasn't trademarked). "This is 1999 all over again," said one beaming worker. Some were weary and overcome with joy: "I've never worked so hard in my life," said one older, more seasoned veteran. "I've been here for one year, but I wish it had been two." Engineers were sporting wide grins as they bounced off the walls and funneled into an 11:30 company-wide meeting where the public stock offering was to be officially announced and celebrated. Some were surely calculating their potential windfalls as they scampered down the hall, while others seemed apprehensive about the road ahead. My colleague and I were all but lost in the tumult until we emerged from building 41 and began scribbling notes down and snapping digital photos. Google security (yes, there is such a thing) pounced immediately admonishing us to cease and desist. "I was a second lieutenant in the Marines, do you want to play games?" said the stocky security guard. And that's when the company with the pre-school-like logo suddenly didn't seem so playful.

For me, the scene inside eerily echoed my previous stint in California when the dotcoms were still in bloom. By the time I returned to the East coast in 2002 the country had grown weary of overhyped Websites, corporate greed and generally arrogant business people. The recession decimated the Silicon Valley economy as untold billions evaporated in the California sun. Many reckoned that it was the end of California's reign as a place that could fuel innovation or generate significant growth for the U.S. economy. World events took center stage, the military geared up for war and here at home we hunkered down, fretting over terrorism and looking toward the government to protect us and re-ignite economic growth. Corporate America was the unequivocal bad guy—certainly not the savior.

Or so it seemed. Now it turns out that ultra-powerful turbine behind our full-fledged recovery isn't some government works project or a tariff or even a job training program. Rather, it's a young company that does one thing: Searches the Web. How could that be? Haven't we learned our dotcom lesson? Aren't we too smart to fall victim once again to the breathless enthusiasm that seems to blow from the west like the Santa Anna winds?

For the 20-somethings in building 41, the answers are all but obvious. For the rest of us, it might take some grappling. The outcome will of course be determined by how Google and its patrons re-invest their spoils and how they adapt to the market for information that is changing and reforming beneath our feet. One thing we do know is that the 30-something founders of Google, Larry Page and Sergey Brin, are doing everything they can to retain control of the company that they launched when they were getting their PhDs at Stanford, in 1997. They will still own about a third of the corporation and there will be two tiers of stock so that not all votes are created equal. That said, their engineer-centric company will be under extraordinary pressure to grow at a pace that can warrant its sky-high valuation, and any missteps, such as its recent release of G-mail, which rankled privacy zealots, will probably not be greeted joyfully on Wall Street.

As to whether Google's IPO can on its own spark innovation or even inflate another bubble, anything is possible — that's probably the biggest moral of the dotcom story. But things have changed in the short period since the downturn. For one thing, companies are now accounting for stock options as expenses. Consequently, more and more corporations are abandoning a method of compensation that effectively let talented workers place big bets with their careers. Without stock options, we might not see the same level of frenzied startup activity prevalent during the late 1990s. The other big difference is that many of the venture capitalists in Silicon Valley are still smarting from the last round of layoffs and drop-offs in tech stock prices. Sure, hope springs eternal, but that might only stretch so far given that they've seen the dire effects of old investing habits.

At Building 41 none of that seemed to matter right now. Google's news was received with cheers and laughter. For the rest of the country, it seemed to reinforce our love-hate relationship with corporate America: One moment we are cogs in the system—ruined by Enron marauders and corrupt bankers; the next, we all have a chance of hitting it big and finding a supercharged Googleified rocket ship. As I drove out of the parking lot and cruised up 101 North toward San Francisco, the sun was shining brightly, the fog had lifted and it was as if the whole of Silicon Valley cried out, "We're baaaaack!"