For many people, especially younger ones, daily life without the services of Google’s parent company Alphabet is almost unimaginable. In addition to the world’s largest search engine, these include Gmail, the maps and navigation service Google Maps, the video platform YouTube and the smartphone operating system Android.
The foundation stone of the company was laid in 1995 by Larry Page and Sergey Brin, then computer science students at the elite American university Stanford, who launched the search engine “Google” on September 15, 1997. The original name “Backrub” was already history by then and was replaced by the verbalization of the term “Googol”, which describes one with one hundred zeros. The company was founded in 1998 with $100,000 in seed funding by German computer scientist Andreas von Bechtolsheim. The initial headquarters was a garage in Menlo Park, California.
In 2003, the company moved to a property in Mountain View, California, which was developed into the so-called “Googleplex” in the following years. This approximately 290,000-square-meter location houses not only offices and workspaces, but also services and recreational facilities for employees.
Key to success
In retrospect, the founders’ idea sounds simple: a good search engine delivers the results that users need. Therefore, search results are highly personalized, starting with where the search query is sent from. The algorithm derives assumptions about what each person is looking for from the user data available so far and ranks the results accordingly. The concept works: Former internet search top dogs like Yahoo and Altavista were quickly overtaken; today Google has a market share of more than 90 percent. The company’s dominance is also demonstrated by the fact that the verb “google” has been in German dictionaries since 2004, where it generally describes internet searches.
Nevertheless, Google not only shapes the user experience, but also the production of web content. This is because, as far as possible, it is created in such a way that search algorithms can find and display it well (Search Engine Optimization, note). If a result is clicked less than others, the search algorithm concludes that the page is less interesting. As a result, it is displayed less prominently.
The Group is also investing in other business areas, such as drones, self-driving cars, and biotechnology. In 2015, the divisions were reorganized under the newly established holding company Alphabet. Due to its huge market power, Google has repeatedly run into trouble with competition regulators. In addition, there are concerns regarding data protection. In the EU, the company recently lost a complaint against a fine of more than four billion euros.
The basis of profit
However, the core business of the internet is by far the most profitable. In 2021, Alphabet had
a net profit of 76 billion dollars, with a turnover of
257.6 billion dollars. Worldwide, the group has about 156,000 employees.
In addition to its user-friendliness, the fact that end users don’t have to pay for Google’s services has been a pioneering factor in its rapid spread around the world. Instead, they have to accept a user agreement that grants Google the right to analyze the resulting data.