Ken Auletta - Googled - The End of the World as We Know It

Microsoft was unaccustomed to losing. The ever-competitive Ballmer, a Microsoft adviser admitted, was filled with “jealousy” and rage that Google was doing what Netscape had done a decade before, not merely challenging but “mooning the giant.” Jealousy and rage are not the sturdiest foundations for rational decision making.

Microsoft seemed to affect Google’s testosterone level as well. Sergey Brin told the Associated Press that Microsoft’s takeover bid was “unnerving.” It would grant Microsoft near-monopoly power, not just over operating systems and browsers but would also “tie up the top Web sites, and could be used to manipulate stuff in various ways.” Eric Schmidt insisted that he believes in sitting down and talking to everyone. But did this include Microsoft? Reflecting a professional lifetime of being on the other side of the Redmond giant, Schmidt said, “If Microsoft wanted to do a business deal with us, we’d do it. You betcha. But we’d bring a tape recorder!”

Jitters aside, Google would find a way to gain advantage from the Yahoo-Microsoft melee, but not without getting bloodied itself. The company’s Executive Committee and Board of Directors held meetings to devise a blocking strategy. They discussed petitioning the Justice Department to obstruct the merger, using the same antitrust arguments Microsoft had employed to try to stop Google from acquiring DoubleClick. They wrestled with whether to make their own bid for Yahoo, but decided it would be difficult to integrate two large companies with different cultures and assumed, in any case, that the government would disallow on antitrust grounds a merger of the two dominant search engines. They reached out to Jerry Yang and in the spring jointly devised a roadblock strategy; they announced that Google would become the selling agent for a large portion of Yahoo’s search ads. “It gives them a tool to avoid being swallowed by Microsoft,” Eric Schmidt said at the time. Asked in September 2008 what was the most important Google event of the previous six months, Schmidt said, “the Yahoo business deal… It was a setback for Microsoft.”

Google’s effort to have the Justice Department block Microsoft’s bid for Yahoo brought to mind Ralph Waldo Emerson’s delicious observation that “a foolish consistency is the hobgoblin of little minds.” Like other corporations, Google and Microsoft extol the virtues of government’s leaving them unfettered, free to innovate-except when they call on government to intervene in order for them to gain a competitive advantage. But antitrust concerns were a real issue for others. The Association of National Advertisers, which represents major companies such as Procter amp; Gamble, petitioned Justice to block a Google/Yahoo alliance. The World Association of Newspapers, which represents eighteen thousand newspapers, urged both the Justice Department and the European Union to block the deal. This opposition unnerved Page and Brin. According to a member of Google’s senior management team, the idea that Justice was more concerned about Google’s becoming a monopoly than Microsoft provoked an uncomfortable discussion at a September 2008 executive committee meeting. The founders, this executive said, were “very upset” to be compared with Gates’s “evil empire.” They ranted about how Google was making the Web more accessible, not trying to kill competition. That the government could think they were trying to squelch search competition, or might possess too much leverage over advertisers, baffled them. They could not comprehend the anti-Google sentiment that was building.

This executive committee meeting coincided with the annual Google Zeitgeist press luncheon, and there I asked Brin and Page, “How do you feel when people accuse you of potentially doing evil?”

Not surprisingly, they didn’t really answer my question. “If you look at our products, search being our most popular one,” Brin said, “we don’t lock anyone into search.”

“The value to the world,” said Page, “of having access to everything for free everywhere, all the time, really fast, without degraded service anywhere, has really been a tremendous thing.”

A decade earlier, Bill Gates had felt similarly hurt that the government would call his motives into question by filing charges that Microsoft, which provided 95 percent of PC operating systems in America, was a monopoly. This blind spot to public fears, to emotion, prevented Gates from properly reading people, from anticipating the challenges that would materialize in Washington. Now Page and Brin seemed to have the same blind spot.

This emotional opaqueness was on display on the second day of the 2008 Zeitgeist. Al Gore was to conclude the conference by interviewing Page and Brin. The three men chatted on stage for a few minutes when Page interrupted to say that Brin wanted ten minutes to share something. Brin stepped to a microphone and riveted the audience for about ten minutes with a precise, impersonal account of his mother’s recent diagnosis of Parkinson’s disease. He explained that his wife, Anne Wojcicki, had cofounded 23andMe to study genetics, including the genetics of Parkinson’s. He said the evidence of a genetic link to Parkinson’s was at first slight, but studies had recently unearthed one gene, LRRK2, in particular a mutation known as G2019S, that in some ethnic groups creates a familial link through which the disease travels.

Brin said he had dug deeper, reading genetics journals, searching for pieces of DNA shared with relatives. Ultimately, he learned that he shared with his mother the G2019S mutation. He spoke as if he were talking about someone else. The implications of this finding are imprecisely understood, he said. What was clear was that he had “a markedly higher chance of developing Parkinson’s in my lifetime than the average person.” Sounding like a scientist, he pegged the odds “between 20 percent to 80 percent, depending on the study and how you measure it.” This knowledge left him feeling “fortunate,” he said; the mutation had been discovered early in his life and he could reduce the odds through exercise, certain foods, and by employing his substantial wealth to support further research. With the audience seated in stunned silence, he concluded, “That’s all I wanted to say,” and sat down.

Compared with Steve Jobs, who had declined to discuss his own health and issued opague statements even as he grew visibly ill, Brin was admirably forthcoming. Yet it never seemed to occur to him to turn his attention to introducing to the audience his very pregnant, beaming wife, soon-to-be mother of a child who might very well carry that same gene. Certainly it did not seem to occur to him to display emotion, to allay the concerns his comments would arouse among Google employees or shareholders. What was billed as “a personal statement” was really a science lesson. The way Brin dealt with his DNA mirrored the way Google dealt with Washington, politics, or traditional media: just give us the facts, don’t blur them by discussing your fears or feelings.

The Justice Department did finally intervene against Google, informing the company that if it did not terminate its ad sales partnership with Yahoo, it would be sued for antitrust violations, just as Microsoft had been the previous decade. Three hours before Justice was to file antitrust charges, Google dropped the deal.

Microsoft did not capture its prize, at least not through 2008. However, by the end of that year Microsoft seemed eager to return to the bargaining table, if only to purchase Yahoo’s search business. Gates’s company continued to lose search market share, and emerged from this battle with Yahoo looking feckless and defensive, not the posture one assumes before a foe with Napoleonic power.

In the confusion, other media companies maneuvered to achieve their own best balance of power. In tactics worthy of Metternich, Time Warner pursued simultaneous discussions with Yahoo, Microsoft, and Google about either selling off AOL or forming a partnership. The News Corporation schemed to combine with Microsoft to bid for Yahoo and, at other times, with Yahoo to block Microsoft.