Key points: Excite's CEO passed on purchasing Google for $750K + 1% of Excite's stock because as a condition of the acquihire deal, Larry Page demanded Excite's tech stack be replaced with Google's. While the financial terms of the deal were acceptable to both parties, the deal fell apart due to Larry's request: Excite tested Google's search results against theirs and at the time found no material difference warranting such a drastic change in their business.
And if you listen beyond the highlighted range of the interview, you hear Excite's CEO Bell speaking of how most of his attention was on the @Home side of the business, managing difficult relationships with his cable-company owners/partners.
That reveals, I think, the actual error in Excite's strategy: not realizing that "internet search" was the real prize deserving all the attention. That mis-prioritization is what led to accepting the merger with @Home just a little before these Google discussions. That's also why they mainly evaluated Google on some static set of then-common queries. That's why they were satisfied with their existing search results – which by my recollection, were for a while the clearly "most relevant" of then-extant options. Their tech stack & team had been quite good, and certainly seemed "good enough" as just one small part of the particular larger game they thought they were playing.
Had Excite accepted Page's requirement, the tech/team switchover might've been rocky, and I suspect at best Excite would've remained relevant in search for only a little while longer. But the same distractions & headwinds that bankrupted Excite@Home by the end of 2001 likely would've felled the company even with the addition of Google's nascent potential. Google's best talent, including Page & Brin, wouldn't have stayed around for long. (And in the actual history of an independent Google, it still raised tens-of-millions in additional venture investment to give them the time/resources to perfect their model – runway that might not have been available inside Excite.)
It was the earlier choice to emphasize the "last mile" cable-internet business and monthly subscription revenues, via the merger with @Home, that sealed Excite's fate. It nudged them away from buying Google, sure, but also put them on a path where even buying Google couldn't have saved them.
To choose to run a comparison test seems objective and rational, but if Excite had its own people perform them, there is quite a risk of 'not invented here' (caveat: I know nothing about how these tests were conducted, beyond what is in the clip.) If your expertise is in search, and someone else has a better idea, you don't look so good. If, in addition, the people tasked with the testing were aware of Larry Page's demand, they would have had even less incentive to show PageRank as superior.
There is a long history of companies crushing the innovation they buy, and it is not necessarily a top-down effect. Page had good reason to make this issue a deal-breaker.
I never understood why these companies just didn't invest as a hedge. A lot of these startups didn't need outright purchase but wanted working capital. Blockbuster could have bought 10% of Netflix as a hedge and seems like similar things here. You also don't have all the "merge everything together" nonsense that kills deals like this AOL+Time Warner and now Verizon+Yahoo+AOL. You can hedge a call option with a put option once you understand how.
The failed acquisitions of the subsequently wildly successful (e.g. Xerox) reminds me of mandatory advertising for a position that is already filled. The founders don't want to sell.
I always find stories like this fascinating. It always reminds me of how fragile our futures are. If Google was acquired the internet will be a VERY different place today. I find it humourous because this kinda brings to mind Skynet from the Terminator. In the movies, they spend a lot of time sending killing machines to the past to take out people who would invent the future and it causes a great deal of chaos, while all they might need to do is add a clause in a merger or acquisition that botches a deal that prevents Skynet from existing and the mission is accomplished. LOL
Are you sure? If Google didn't remain Google within Excite, perhaps they wouldn't have been as successful, and would've still been replaced by the next Google-like company.
Perhaps, like judgement day, Google was inevitable.
Realistically, killer machines wouldn't abide by the Geneva Convention and could just make up a poison gas or supervirus and wipe out all humanity without making humanoid robots in the first place.
People forget that had Google been acquired it's not like we would still have the same site today.
The main reason it was successful back in the day was because it was fast, clean and had no ads. Any company that acquired them would sort those out pretty quick.
"Fast, clean and no ads" was a big deal for me. Internet was very slow when I starting using it. When I discovered Google, it was a breath of fresh air to my life. For a change I was using a search engine that loaded fast.
I've come around to the idea that the old 'directory style' search engines is a feature that I'd quite like to see again. If a search engine is only available as a search listing then you're entirely at the mercy of the algorithm. With a human-curated directory of links there's some checking going on, and it's much harder for someone to game their way to the top of the listings.
I remember I and many others starting to use them for exactly that. Look at this comparison (not that early is starts at 2004 while google iirc started to see usage at 2001)
Right, but the received wisdom was that the ‘winner’ of the internet race to be the number 1 portal would look more like Yahoo, Excite or AOL. A big front page with lots of content and big juicy adds. If Google had been acquired, they would simply have become the tiny little search box on the Excite front page. That could have left space for another company to develop competing search tech and beat them with a minimalist approach. Or for another heavy duty portal page site to develop competing tech. Maybe it was only Google’s radically minimalist focus that allowed their superior search tech to really stand out.
Don’t forget that Pagerank, the ‘results must have all terms’ feature and the very large index made for significantly better results that the competition had.
- what if Excite bought Google and killed it. And kept buying all competitors before they become a threat .... like Google does these days.
- following from there: which companies have been bought and killed off so that the future we could have had was sacrificed on the altar of existing companies defending their own turf.
- following even more: Which innovation are we not seeing because the huge business model desert created by the dominant advertising model (which now turned into surveillance model).
Likely they would have seen differences if they had compared on long tail queries instead of common queries. With the growth in search usage at the time the diversity of searches was only going up.
"they tested was “Internet.” According to Hassan, Excite’s first results were Chinese web pages where the English word “Internet” stood out among a jumble of Chinese characters. Then the team typed “Internet” into BackRub. The first two results delivered pages that told you how to use browsers. It was exactly the kind of helpful result that would most likely satisfy someone who made the query. Bell was visibly upset. The Stanford product was too good. If Excite were to host a search engine that instantly gave people information they sought, he explained, the users would leave the site instantly. Since his ad revenue came from people staying on the site—“stickiness” was the most desired metric in websites at the time—using BackRub’s technology would be counterproductive."
A lot of people want to judge investors who passed on Google. They shouldn't. In VC you hit or miss, you win some you lose some. People judge investors who passed saying it was a "poor" decision. That's only because you have hindsight and hindsight is 20/20.
I am sure there were many other search plays at the time and picking from one was just like picking a crab from a barrel.
I doubt investors, who do this everyday and win some and lose some, worry all the time about why they passed on Google.
I’m not sure what you’re saying - that we shouldn’t assess people whose job it is to pick investments with how well they pick investments? Isn’t it supposed to be their skill to be able to pick things without hindsight? Otherwise what are they doing and why don’t they just gamble the money in a casino instead?
I agree with the general sentiment of your post, and luck is definitely a factor. But investors ultimately care about ROI, and if you didn't invest in Google before the dot com bust then there's a very good chance your entire fund failed.
> I doubt investors, who do this everyday and win some and lose some, worry all the time about why they passed on Google.
A very famous investor once said to me "you either invested in Google or you lost money."
That's a good question. I remember using Yahoo and AltaVista a lot in high school. In college I'm 100% sure I used Google all the time which dates back around 2002/3. Switched to Gmail in 2005.
It must have been before that. I was on AmigaOS, during the 90's, and there was a (commercial) web browser named "Voyager", which came with Google as homepage/search pre-installed.
Around 2000. Initially via the Dogpile meta search engine, but after a while it became apparent that all the best results were coming in via Google anyway, so went right to the source.
I was quite young at the time with very limited access to the internet.Google was the first search engine I used and it was just starting.A couple of months later I 'discovered' Yahoo.Went on their site and I was like wtf..I think I visited Yahoo less than 10 times since then..
[+] [-] omarchowdhury|6 years ago|reply
[+] [-] gojomo|6 years ago|reply
That reveals, I think, the actual error in Excite's strategy: not realizing that "internet search" was the real prize deserving all the attention. That mis-prioritization is what led to accepting the merger with @Home just a little before these Google discussions. That's also why they mainly evaluated Google on some static set of then-common queries. That's why they were satisfied with their existing search results – which by my recollection, were for a while the clearly "most relevant" of then-extant options. Their tech stack & team had been quite good, and certainly seemed "good enough" as just one small part of the particular larger game they thought they were playing.
Had Excite accepted Page's requirement, the tech/team switchover might've been rocky, and I suspect at best Excite would've remained relevant in search for only a little while longer. But the same distractions & headwinds that bankrupted Excite@Home by the end of 2001 likely would've felled the company even with the addition of Google's nascent potential. Google's best talent, including Page & Brin, wouldn't have stayed around for long. (And in the actual history of an independent Google, it still raised tens-of-millions in additional venture investment to give them the time/resources to perfect their model – runway that might not have been available inside Excite.)
It was the earlier choice to emphasize the "last mile" cable-internet business and monthly subscription revenues, via the merger with @Home, that sealed Excite's fate. It nudged them away from buying Google, sure, but also put them on a path where even buying Google couldn't have saved them.
[+] [-] mannykannot|6 years ago|reply
There is a long history of companies crushing the innovation they buy, and it is not necessarily a top-down effect. Page had good reason to make this issue a deal-breaker.
[+] [-] snarf21|6 years ago|reply
[+] [-] hyperpallium|6 years ago|reply
[+] [-] russfink|6 years ago|reply
[+] [-] adim86|6 years ago|reply
[+] [-] jfoster|6 years ago|reply
Perhaps, like judgement day, Google was inevitable.
[+] [-] Jestar342|6 years ago|reply
"Are you Sarah Connor? ... You've been served."
[+] [-] omarhaneef|6 years ago|reply
"Mission failed!"
"What happened?"
"Terminator 7 was not a good cultural fit at Akin Gump."
"Okay, roll out Terminator 8, but this time make sure he isn't quite as serious. Send him back..."
[+] [-] jccalhoun|6 years ago|reply
[+] [-] russfink|6 years ago|reply
[+] [-] hyperpallium|6 years ago|reply
[+] [-] threeseed|6 years ago|reply
The main reason it was successful back in the day was because it was fast, clean and had no ads. Any company that acquired them would sort those out pretty quick.
[+] [-] madiathomas|6 years ago|reply
[+] [-] onion2k|6 years ago|reply
[+] [-] makapuf|6 years ago|reply
http://aautar.digital-radiation.com/blog/uploaded_images/goo...
Some other search engines were even more heavy handed on advertising.
[+] [-] simonh|6 years ago|reply
[+] [-] jelling|6 years ago|reply
[+] [-] tinus_hn|6 years ago|reply
[+] [-] partingshots|6 years ago|reply
I’m very glad they weren’t acquired.
[+] [-] sundvor|6 years ago|reply
[+] [-] yccheok|6 years ago|reply
[+] [-] geophile|6 years ago|reply
I mean, if he had flipped a coin on each decision, his expected outcome would Have been higher.
[+] [-] sytelus|6 years ago|reply
[+] [-] paulus_magnus2|6 years ago|reply
- what if Excite bought Google and killed it. And kept buying all competitors before they become a threat .... like Google does these days.
- following from there: which companies have been bought and killed off so that the future we could have had was sacrificed on the altar of existing companies defending their own turf.
- following even more: Which innovation are we not seeing because the huge business model desert created by the dominant advertising model (which now turned into surveillance model).
[+] [-] dang|6 years ago|reply
2010: https://news.ycombinator.com/item?id=1740871
[+] [-] nkkollaw|6 years ago|reply
When do you ever need to do that, rather than doing the redesign and then publishing it whenever it's ready..?
[+] [-] SomewhatLikely|6 years ago|reply
[+] [-] rasz|6 years ago|reply
"they tested was “Internet.” According to Hassan, Excite’s first results were Chinese web pages where the English word “Internet” stood out among a jumble of Chinese characters. Then the team typed “Internet” into BackRub. The first two results delivered pages that told you how to use browsers. It was exactly the kind of helpful result that would most likely satisfy someone who made the query. Bell was visibly upset. The Stanford product was too good. If Excite were to host a search engine that instantly gave people information they sought, he explained, the users would leave the site instantly. Since his ad revenue came from people staying on the site—“stickiness” was the most desired metric in websites at the time—using BackRub’s technology would be counterproductive."
[+] [-] chirau|6 years ago|reply
I am sure there were many other search plays at the time and picking from one was just like picking a crab from a barrel.
I doubt investors, who do this everyday and win some and lose some, worry all the time about why they passed on Google.
[+] [-] chrisseaton|6 years ago|reply
[+] [-] OnlineGladiator|6 years ago|reply
> I doubt investors, who do this everyday and win some and lose some, worry all the time about why they passed on Google.
A very famous investor once said to me "you either invested in Google or you lost money."
[+] [-] sct202|6 years ago|reply
[+] [-] wenbin|6 years ago|reply
For me, it was after the year 2000, two years after Google was incorporated.
[+] [-] tiborsaas|6 years ago|reply
[+] [-] zmix|6 years ago|reply
[+] [-] jnwatson|6 years ago|reply
Having Google access via mobile in 2000 was living in the future. Folks would treat me like an oracle.
[+] [-] mikepurvis|6 years ago|reply
[+] [-] cosmodisk|6 years ago|reply
[+] [-] omarchowdhury|6 years ago|reply
[+] [-] dec0dedab0de|6 years ago|reply
[+] [-] pbreit|6 years ago|reply
[+] [-] vanesadawson|6 years ago|reply