Entrepreneur Watch

Reviews for "Inside Larry and Sergey's Brain"

Publisher's Weekly (starred review):  "In this must-read for anyone who deals seriously with cyberspace, Brandt has a remarkable profile in present-day innovation and potential."

Elise Ackerman, San Jose Mercury News: "...chockfull of new insights about one of the world’s most thoroughly scrutinized companies ... Gracefully written ... Readers interested in acquiring a deeper understanding of Google’s world would be hard-pressed to find a more knowledgeable guide."  

Marc Benioff, CEO and founder of Salesforce.com:  “Brandt takes us inside Google’s stratospheric trajectory and the founders’ quest to revolutionize both the way we find information and the values that should guide twenty-first-century businesses.”

Business week magazine for sale?

Both the Wall Street Journal and Bloomberg report that McGraw-Hill has hired an investment bank to explore selling its flagship magazine.

As a former Business Week reporter, I have a couple opinions on this.

First, it's incredibly short-sighted. Yes, ad revenue at BW was down 30% in the first quarter. Its ad pages were down 34%.

But ad pages dropped 45% at Fortune and 40% at Forbes. There's a recession going on. It won't go on forever. Print ads may never come back completely, which is why publications need to learn to make money in online advertising. There is a future in journalism after the recession retreats.

In the 1990s at at BW retreat, Joe Dionne, then CEO at McGraw-Hill, got up and gave a rather arrogant speech about how journalism was changing in the new online world. As if he knew. He also said that experience showed that most of the reporters in the audience would not survive the transition. It was like radio stars trying to move to TV.

Well, some of us left the business, many have reinvented ourselves. It's McGraw-Hill management that can't seem to make the transition.

I also recall in the 1980s, when another corporation -- American Express, as I recall -- made a hostile bid for McGraw-Hill. BW wrote an editorial against it, saying a publication like BW should only be owned by a publisher. How could we write unbiased stories on financial institutions if we're owned by such an institution ourselves?

That deal did not go through. This one might, as McGraw-Hill looks for short-term gains to feed its stock price. Gotta keep those McGraw family shareholders rich. 

But I wonder, will they stick to the ideal of only selling to a publishing company?

Google Chrome OS and the Post-PC age

I have another post on CNBC.com about Google Chrome helping usher in the Post-PC age.

What happens when Microsoft's OS is no longer the key standard of home computers? This is tough news for Microsoft as computing moves into the cloud.

Chrome OS doesn't even need to become the new standard, and probably won't. Others will probably come along and prove popular. But it is a great catalyst to help make the move. The Post-PC era will probably not have a single company with overwhelming market share.

At least, that's the way it looks right now. There is opportunity out there. People just have to stand up to it.

Why journalism is dying

If there is any industry barely surviving on life support these days, it's the field of journalism. Forget banking, Wall Street trading, the auto companies. They're considered "too big to fail" and are getting bailed out with trillions in taxpayer money -- money taken from future generations of taxpayers.

But journalism, the most essential business to maintaining a free state, to maintaining balance of power and keeping an eye on government and business dishonesty, is lying in a coma with no health insurance.

Why is this? Many people blame Google for giving us access to free news on the Internet. Some blame Craigslist for taking classified ads from newspapers. These are scapegoats.

The problem is, quite simply, the Internet. Before radio and television, the printed word was the most efficient way of spreading information. These new media cut into newspapers and magazines, but did not kill them. Printed publications managed to give us more depth and thought than the broadcast media. You can read them on your own schedule, and choose the stories you're interested in, rather than waiting for the allotted time slots of broadcast.

The Internet wields a much bigger knife. It can do anything the print media can, and do it better, cheaper and faster. The problem is that print media used to pay a living wage to journalists. The Internet does not.

For that I blame the media companies. Every one of them survives through advertising. The price of subscriptions does not cover the cost of paper and postage. Paid subscriptions are merely a way to prove to advertisers that people actually read the things. Online media can prove readership with tracking software. Paid subscriptions are a joke. I do not believe for a minute that the WSJ online is breaking even.

The media companies should be able to create profitable, ad-supported online publications. Why doesn't this happen? Here are some examples:

FoxNews.com has an article about a concept car designed by some Googlers that I found interesting. The ads with the article feature a Sprint smartphone, how to drop 47 pounds like a mom of three did, how to get whiter teeth like another mom did, how to plump your lips, etc. The site caters to moms. It ignores people who may actually read the articles.

How about a New York Times article on venture capitalists cutting back to basics? Ads for Toyota cars, for the movie Adam, and -- blissfully -- Ads by Google for a private equity database, private equity software, and an investment site.

So why is Google making so much money from advertising?

The only immediate future I can see for online media is a partnership with Google or other clever online advertising companies. Work with them on tools that identify the readers' interests, not only by what they're reading, but by other metrics the advertisers can track.

Yes, some people will be concerned about privacy. It's an overblown issue. Nobody at Google or Microsoft is going to read my personal email or track the sites I go to. Only computers have the bandwidth to collect that data on billions of people. Follow me all you want. Just give me relevance in return.

The Internet is changing the world, and businesses have to adapt. Paper publications will not die, but they are shrinking and will never grow back. Real depth, long articles and books are still better on paper, unless the Kindle takes over (and that's another story.) The future of media is online, and the revenue source is targeted advertising.

Deal with it.

Why DOJ will not go after Google Book deal

I admit it. I'm naive. Someone please explain this to me as though I were 12 years old. In simple terms.

Here's what confuses me: The Justice Dept. has confirmed that it has issued formal "requests for information" about the recently-signed settlement between Google Books and groups representing publishers and authors.

A Request For Information is just what it sounds like -- a preliminary steps to collect the facts before deciding if any action is needed. But taking that step means that DOJ has decided there is enough merit to the concerns that it should spend money investigating the issue. In a letter to a federal judge reviewing the settlement, deputy assistant attorney general Bill Cavanaugh said that DOJ has "determined that the issues raised by the proposed settlement warrant further inquiry."

OK, pretend I'm 12. Here's what I know.

Since the time they were graduate students at Stanford University, Larry Page and Sergey Brin have dreamed of making every book ever written available to anyone who wants it. Pay for it if the copyright holder is around to get paid, offer it for free if no one seems to own the property any more. Cool. It's kind of like the Great Library at Alexandria, an attempt to collect, preserve and make available every book ever written.

So in 2002, they started Google Print, later renamed Google Book Search. They hired engineers to design and build robots that could turn the delicate pages of ancient books, scan each page, and put the books into a searchable database. They agreed to pay to scan books in some big libraries so that anybody in the world could read them, not just those with a local library card or access to the special books section. Also cool.

French libraries complained that all the books were from English-language libraries. Google was being biased against the French masterworks. OK, Google started adding other languages. Problem solved.

Then Google went to book publishers. Google would digitize books in print, make excerpts (as short or as long as publishers and authors wanted) available online with links to places to buy the books. Sounds like Amazon, except that Google doesn't make any money from it, unless you run ads along with the book search results. No prob.

Then it went to book authors. If your publisher can't be bothered, send Google your book, get it digitized, and use the snippets to sell it through Amazon or another retailer. No brainer.

But what about books no longer under copyright, or long out-of-print books that haven't sold a single copy in decades? In most cases, nobody knows who owns the copyright if it exists. Google could make it available online, like a library book, unless a copyright holder comes forward and says no. Then he or she would get the same deal.

Whoa, wait a minute. Make the author do some work -- notify Google -- in order to protect a work that nobody is going to read otherwise and has certainly not made any money in years?

Now this is where I get confused. I co-authored a book about investment banker Thom Weisel seven years ago. I think it sold about 100 copies. It will never make me any money. You want to buy it? Go ahead. Amazon will make some money. My publisher will get a little revenue. Thom will get some free publicity. I'll never make another dime off it. Like 90 percent of all published books, it will never sell enough to cover the advance I already got from my publisher.

As far as I'm concerned, Google can distribute a billion copies around the world for free. My publisher probably wouldn't like it, though.

In fact, no publisher does. The Authors Guild, the Association of American Publishers and others complained. Google should find out whether every library book it digitizes is still under copyright. If so, it should find out who owns the copyright, contact that person and get permission and set up a way for the rights holder to get paid. A few hundred million dollars ought to cover the cost.

They didn't just complain, they sued.

It's a good thing they didn't hold up public libraries to the same standards.

So Google reached a settlement. It would put up $125 million to pay authors and publishers for the rights to digitize and make their books available. The money would come from ads Google sells alongside the book search results. Google would also create a nonprofit Books Rights Registry to try and locate the rightw owners, maintain a database, and make sure they get paid.

Here's an explanation of the settlemet from the New York Times for those of you with a reading comprehension level above that of a 12 year old.

OK, everybody happy now?

No. Harvard professor Robert Darnton doesn't like it because Google has backed off on the goal of providing books for free, like a library. Now libraries will have to pay a fee for access to the copyrighted and orphan books. Suddenly, Google is selling access to books. It could compete with Amazon. Jeff Bezos doesn't like it either.

Google was forced to take this approach by the book publishers. It's perfectly happy making money by selling ads. It's a non-exclusive deal, so if Jeff Bezos wants to do the same thing, he's free to set up his own organization.

But now DOJ is investigating whether this deal turns Google into a monopoly book seller. And google thought that the deal was a no-brainer, one that everyone could easily accept. And I think that the folks of Google have a higher IQ than most 12-year-olds.

I just don't get it. I want people to have access to every book ever written. Larry and Sergey want people to have access to every book ever written. It turns out to be a tough thing to accomplish unless you're a pharaoh building a library in ancient Egypt. What's an alleged search engine monopoly supposed to do?

Why Bing is good for Google

I've started a guest blog on CNBC.com. My first posting is up today.

Bing is a great search engine. It always takes Microsoft three attempts to get charmed. 

The problem is that Microsoft has been neglecting one important aspect of its online business: How is it ever going to make money off this stuff? 

So far, Bing looks like a money-loser for Microsoft. I performed a fairly obscure search and it gave great search results but found NO ADS that were relevant (Same search on Google came up with five ads)! And all the sites Bling linked to had ads by Google. 

Great way to make money -- for Google.

Google figured out six or seven years ago that it not only needed to create a great search engine, but a great engine to match ads to search results.

Maybe after a few more attempts -- about nine years from now -- Microsoft will get that right too.

Google: Larry and Sergey and the status quo - 2

"Inside Larry and Sergey's Brain" to be released Sept. 17, 2009

Both Larry and Sergey are Jewish, but that ethnicity has affected Sergey’s family more than it has Larry’s. Sergey’s father, Mikhail (changed to Michael when he came to the United States) is a curmudgeonly intellectual and a gifted mathematician. At first, he wanted to study physics at Moscow State University and become an astronomer. But he was turned down because the Communist Party banned Jews from the Physics Department; the government didn’t want them to have access to Soviet nuclear secrets. So he studied mathematics instead, and took the entrance exams in rooms reserved for Jewish students, appallingly nicknamed the “gas chambers.” Mikhail graduated with distinction in 1970. Sergey was born three years later.

In 1997, Mikhail attended an international conference, where he met foreign researchers and academics. It was a life-changing event. He went home that night and told his wife that they had to get out of the country and settle in America, where real opportunities lay. In 1978, Brin’s family applied for an emigration permit. Simply applying for emigration got Mikhail fired from his job; his wife Eugenia had to quit hers, and the family had to relinquish its Soviet citizenship. Sergey was six years old when his family finally landed in Maryland the following year.

Michael Brin is now a mathematics professor at the University of Maryland. Sergey's grandmother—over sixty when the family emigrated—taught Russian for several years at the university. Eugenia became a scientist at NASA.

Michael Brin discovered his son’s promise one day when Sergey was eight or nine years old. Anatoly Katok and other colleagues from the university were sitting around the Brin house listening to Michael complain about how stupid his undergrads were. He had tried giving them a graduate-level math problem, just a little above the capabilities of most undergrads, he grumbled, yet not one of the students had had the brains to solve it.

Sergey, who had been quietly sitting in the corner, decided to speak up, and in his “squeaky little voice,” according to Katok, offered a solution to the problem. At first, his father dismissed him as too "stupid" for the conversation. Katok then interjected: “No, Michael. That’s the correct answer.” Adds Katok: “In my memory, it was the first time Michael took his son seriously.”

Sergey graduated from the University of Maryland in 1993 with a dual degree in math and computer science, and entered the Ph.D. program at Stanford in 1994. He had turned out to be such a brilliant mathematician that his father expected big things from him. But business mogul was not one of them. After Sergey dropped out of Stanford to start Google, Michael Brin said, “I expected him to get his Ph.D. and become somebody, maybe a professor.”

Larry and Sergey brought their left-wing bias and their love of the Internet and open systems to Google. It reflects the world in which they were raised from childhood through college: an academic shire of open systems and free software. After all, what college student doesn’t appreciate free beer, music, games, programs, and information to get him through the next exam? The Internet provides everything but the beer.

           

Google: Larry and Sergey and the status quo - 1

"Inside Larry and Sergey's Brain" to be released Sept. 17, 2009

Larry and Sergey’s families came from just beyond the outskirts of the status quo, a land embattled by class struggles and bigotry. Larry’s family waged labor union battles against the American auto industry, while Sergey’s family suffered through government oppression and discrimination in the Soviet Union.

Larry’s grandfather was an autoworker and a politically leftist member of the Teamsters during its antagonistic confrontations with a young auto industry. The union was led by factions with communist influence. Larry’s grandfather participated in possibly the greatest labor struggle of the early twentieth century, the Flint Sit-Down Strike of 1937, when the workers took over a major auto factory. Larry still keeps a memento from those days: a hammer that his grandfather carried with him for protection during the acrimonious strike.

But Larry’s father, Carl, broke out of that environment and became a leading computer scientist, a talent his sons inherited. He was the first person in the family to graduate from high school (in 1956). He then went on to the University of Michigan to study engineering. While still an undergraduate in 1959, Carl Page was hired to work in the university’s Logic of Computers Group, a pioneering research team headed by legendary computer scientists such as Art Burks and John Holland. He earned two bachelor of science degrees in engineering in 1960, one of them in the specialty field of computer science—the first graduate with a degree in that field at the University of Michigan. In 1965, he earned his Ph.D. in Computer Science from the same university.

Larry got his undergraduate degree in engineering at the University of Michigan in 1995, winning many honors, including the university’s first Outstanding Student Award. But he’s fonder of telling people how he built a working programmable plotter and inkjet printer in a casing he made out of Lego blocks. He also started showing his entrepreneurial interest at Michigan, taking business classes and joining the LeaderShape program, which teaches its members the skills to be leaders in society.