'The biggest tragedy will be if great content is created but it cannot be found'

In a freewheeling chat, Nikesh Arora explains what Google really stands for, whether it’s feeding on profits of other businesses and why he loves being a Googler. Excerpts:

GOOGLE AS DISRUPTOR OF CONVENTIONAL BUSINESS

People look at Google as the Tom Sawyer of business. You get to eat the apple when somebody is painting the fence. Your revenue is driven by content that is free.
I don’t think that is a fair characterisation. Think about this: About four exabytes of data (an exabyte is one billion GB or roughly 40,000 days of video programming) was created prior to 2005. Last year, that number was 270 times that. The point is that a majority of the world’s information is coming in digital form. Now, there are people who develop the content, people who create the content, and then there are people who help other people find it.

...That’s where Google comes in?
Yes. What’s a music company? A music company doesn’t sing. It finds a talent and makes it accessible around the world. What are broadcasters? They collect other peoples’ content and enable people to access it. Are they adding value in the process? Yes, they are. I think the biggest tragedy will be if great content is created but it cannot be found.

Are you conceptually challenging the existing media?
Conceptually, the Internet is challenging the media. It is forcing us to rethink traditional media models. That will happen with or without Google in the mix. If we didn’t exist tomorrow that won’t mean people are not going to post videos online or watch content online. There are other search engines. I don’t think the fundamental behaviour of users changes whether Google is in the mix or not.

You can look at us as an accelerator or enabler. So with Google News, we are helping people find news. There are many newspapers who come to us and say “Thank you very much, I find 10-20 per cent of my traffic from Google News”. Google doesn’t make any money on this. It sends the people back to your website. Google increases the discoverability of your content. You make mental transition from “Oh ****, the world is changing, my business model is challenged” to “Wow, my business is benefiting because I can do this much more cheaply and efficiently”, you go from “Oh ****! Google is bad” to “Google can help me!”

After print and music, Internet — or somebody may say Google, through YouTube — is challenging television now...
I don’t think the video industry will make the same mistakes as the music industry. It will make new ones. Even today, if you want to release a video globally you need to get permissions from hundreds of different publishing authorities and it is still a quagmire…

WHAT REALLY IS GOOGLE?

An Internet-service provider. A media company. A software company. What really is Google?
In its DNA, Google is a technology company. If you talk to Larry (Page) and Sergey (Brin) or Eric (Schmidt), they’re all technologists. They get excited about trying to solve large-scale technology problems around the world. We don’t discuss business models or revenue potential….Google Search is a by-product of Larry and Sergey’s vision to organise the world’s information. Today, with billions of sites around the world, to be able to give a sub-second response to a query requires a lot of technology, a lot of computing and a lot of computing power. There is audio, there is video, there are structured and unstructured databases. To parse through all that is a hugely complex task.

So, innovation is what really drives Google?
Yes. For instance, I don’t know when was the last time we had innovation in mapping business. Look at Google Street View, nobody would have actually thought of that. I was travelling with Larry on a plane on a clear day, and looking at the landmass below he was calculating how long it would take a fleet of cars to map every mile of every road in the US—perhaps 500 cars in six months or thousand cars in three months? That’s how his mind works. That’s how Google Street View was born, because Larry thought that it would be cool to not just look at a map but see how cool it would be to look at where you’re driving. That’s how technological challenges are born. One day he decided that the software on a phone wasn’t that efficient and that is how Android was born.

Google is becoming a byword for globalisation. What does that say about the company?
The cycle of technology adoption is getting shorter. Radio took may be 100 years to be adopted, television took less than that, but Google took 10 years, YouTube five and Facebook just three. Our ability to adopt a technology is constantly growing. Broadband connectivity has hastened the process now. That’s why, I think, Google in some places is synonymous with the Internet. And Internet with globalisation.

For a company which has been in existence for 10 years, has had revenues for 7 years and has really scaled globally only after it became public in early 2005, I think it’s a huge testament that one can scale a business to so many countries in the world so fast.

When engineers come to you with a great idea do you ever find yourself saying, hold on, we have to figure out a way to make money on this?
Let me try and explain the process at Google. We have a lot of engineers, and Larry and Sergey have this fundamental view that so far works. They believe that we have to spend 70 per cent of our time working on our core search business—that is our bread and butter. Twenty per cent of our time is spent on related technological projects and the remaining 10 per cent on whatever one wants to do.

Take Gmail, for instance. This is how it would have been developed. This young guy wants to design an e-mail product. At most companies his proposal would be shot down because there are already so many other email products. At Google, we said OK, here is a bunch of engineers, go pitch your idea to them. I might be dramatising for effect, but you present your idea to a bunch of people in the room and people keep leaving. The last few people in the room might say that this is a great idea and that “I’ll work with you”.

The guy designs Gmail, and then goes to the IT guy who runs the operations and says that “I would like to use server capacity.” The IT guy tells him that “I only have so much capacity, so you have to limit the number of users”. That’s how Gmail gets launched as “by invitation” mail service. As it turned out, “by invitation” mail meant not only initially limiting the number of users but also no spam — because you got Gmail only from a known member. How Gmail succeeded later we all know.

When do you think of making money from a product?
We understand that some of the products may make money, some of the products may not make money and some may make money many, many years later. But an interesting perspective that I have found at Google, something that stimulates me, makes me love what I do, is Larry and Sergey’s view that until you get a lot of people excited about a product and get them using it, what is the point of talking about monetisation? Even with search, until we got a lot of people using it we couldn’t figure out search advertising. Even then, we said let the people using the ads decide the price. Originally, we started the way TV and print sell ads.

We also have a product launch philosophy: Launch early and launch often. Larry’s view is there is no point in putting 600 people into a warehouse and shutting the door and having them coming out three years later with a “great” product saying it has got 50,000 features of which probably 49,500 will never be used. He believes in trying different things and then seeing what works. Google is the only Internet business which tries to get the users off our pages as quickly as possible. Every other business talks of engagement, eyeballs, how long you can keep them within your site. We say: Get off our page as quickly as possible and then you will come back.

FREE YET PROFITABLE

Will all Google products always remain free to users?
You have to remember that Google’s mission is to organise the world’s information and make it universally accessible and useful. Having started with a commitment to increasing access to information, our consumer offerings have to be almost all free. There are a few products we charge for but in the main they are free.

It’s a matter of perspective. For example, should we charge for the Android operating system for phones? Probably not. But guess what? We may get 20 times the number of searches from Android than we do from other phones. And that’s going to create more monetisation opportunities for us on search. So, do I really have to charge for Android? No. Sometimes, people lose this perspective.

What challenge does a free-to-customer model pose to you, who has to earn money for the company?
That’s not how we look at things. We look at what problems we can solve for our users and then figure out the money side of things. If you worry about money first then you are not focussing on what is right for the user. We’ve also found that the right sort of advertising, which gives users relevant information at the right moment, is actually helpful and generates revenue. So, a product can be both free for the user and generate revenue for Google, which is a model that has worked well for us.

A key attraction of Google for the users was the absence of display ads. Will making YouTube profitable entail Google having to accept display ads?
We’ve already embraced display ads, and not just on YouTube. But it’s all about understanding which ads are best suited for a given type of content. On our search results pages, we’ve found that the keyword-linked text ads provide the best experience for users and advertisers. In other contexts, contextual or interest-based display ads are a great option. We give advertisers and publishers these options and data to make the most of those options.

Google’s sources of revenues remain skewed towards the US and Europe. How do you plan to build viable business in the smaller markets like India?
Building viable businesses for Google anywhere is dependent on our ability to build great products for consumers and having great relationships with our partners and customers. It’s true of India just as it is true of the US. But we, of course, have a big advantage with Google in India—we have years of trial and error elsewhere to learn from. I do think India will progress on mobility and the PC, perhaps simultaneously, which requires us to work effectively on both fronts in this market.

BEING A GOOGLER

Google is supposed to change the mindset with which people work. What is the Google culture in your words?
We actually predefine the values under which we want to operate. There are some very fundamental principles on the back of which Eric would like to operate. Cool offices and free food, that’s not culture, that’s a way of creating an environment where people flourish. We want to create an entrepreneurial environment…. We at Google work for the employees, we don’t work for the management. Just yesterday, I interviewed a person for a new position, and I am wondering if this person will bring way too many preconceived notions from his past life that may make it harder for him to adapt to the way we think. People tend to define success as something that has worked in the past.

Things like being able to bring kids or pets to office…are those meant to get employees spend long hours at work or you just want people to be comfortable?
The way you’re saying it seems to suggest that it is an explicit strategy of some sort. It isn’t. These things come from the employees. They ask, “Why am I not allowed to bring my pet to the office?” We say: Why not? You are a smart guy, you won’t bring your kid or pet to the office every day. So, go ahead. Of course, there have been instances of pets getting lost in the office. In the New York office, an employee lost his pet python, and the Wall Street Journal ran a story with the headline “Google Searching”.

GOOGLE, NIKESH & INDIA

How was it for you to transition from a company that first made business plans and then products to a company where products come first and foremost?
When I joined about four and a half years ago, we were in nine markets across Europe, and we didn’t know how the company was going to scale. It made $3 billion in 2004. I had to sit down and figure out how we were going to scale. There is so much room in search, so much better return on investment relative to direct mail or even some print advertising. I spent 3-4 years working with the teams and getting business around Europe and making that an $8-billion business.

What is your role in Google today?
One part of my job is to monetise the existing businesses that we have: search, display and even YouTube. I sort of act part counselor, part executor, part evangelist internally— like (I tell people) if you design a product this way it will be easier for us to sell it or if you do it this way it will be easier to get partnerships. For example, YouTube is all about partners, we have 500 partners globally. Another thing we do collectively as a team is look at the various products of the company and see how those can be monetised.

Being an Indian what do you think you can do differently in India? How big is India in Google?
India is big strategically, but small in real money terms. I think the opportunity in India is such that we may end up becoming a cloud computing nation, and skip through the idea of having lots of software on your PC, which is how the West has evolved. But I am disappointed in terms of infrastructure. What we have achieved in mobile telephony, I wish we could have achieved in broadband too. Google may be synonymous with the Internet, but it is not Internet. I can make things work once there is broadband connectivity. But I cannot make the broadband connectivity work.

Strategically, it’s a fascinating market. Indians are very tech-savvy; they adapt to new things very quickly. It is also a very innovative market; people try to find different ways to get the things done, whether it is right or wrong. There is inbuilt creativity and innovation. In fact, it goes back to a Google principle as well— scarcity breeds creativity. Larry and Sergey will never fund a project with extra resources. A project with too many resources will create several redundant things with too many bells and whistles that nobody will ever use. If I give you less (number of) people, you will be very focussed on what needs to be done. India works the same way, scarcity brings clarity and breeds creativity.

In China you are not the dominant Internet player. Are you scared India could be another China for Google?
We are never scared. India is a large consumer market, it’s democratic and where consumer choice is respected. Google is happy to operate in markets where the consumer is in charge. We want to build great products and we want people to love those products. If people tell us ours is a bad product, I don’t have a problem in reworking my product. We need competition. That’s what creates evolution. Google Search was not the first search engine in the world. Google Maps wasn’t. As Larry says, we will shut down products if there isn’t anything innovative or exciting about them.

Do you ever wish Twitter should have come out of Google?
Of course. We had Google Video, but we decided to acquire YouTube when it had become a huge phenomenon. There’s something about two guys in a garage (that’s where YouTube and so many Silicon Valley companies were born). Who is to know if two people in a garage are building something somewhere that will challenge us.

Does Nikesh bring extra India input into Google?
There is always a subconscious material that comes to any conversation based on people undertaking it. It is not explicit, though. I am in India three times a year and I’m on the board of Bharti. There is a different level of understanding, a different perception. There is always an unintended positive consequence which will happen. I think the management team in Google is cosmopolitan enough and not fixated on short-term goals.