November 3, 2003

Reports last week suggested that Bill Gates is prepared to pay a whopping £10 billion for Google, which searches three billion pages on the internet in under half a second.

But it looks as if Microsoft, for once, might not have its way. Google executives are understood to be keen on floating on Wall Street instead. Either way, the two founders, Sergey Brin and Larry Page, stand to become instant billionaires. Not bad for two 30-year-old computer science students who met only eight years ago at a newcomers' party at the elite Stanford University in the heart of California's Silicon Valley.

The two were obsessed with computers and technology from an early age - Brin was a student from Moscow and Page is the son of a computer science professor. When they met, they agreed on almost nothing. Except technology. Several months of hard work later, the foundations for Google, now the world's largest internet search engine, were laid.

Together they created an internet phenomenon. A year after they met, Page's Stanford room had become Google's data centre, while Brin's was the business office. The pair raised $1 million in their first year and a further $25 million a year after. Google was becoming big news. Major internet players such as AOL, Netscape and Yahoo! were all using Google's technology.

Now about three-quarters of all internet searches use Google. And unlike most dotcoms, it seems to be making money. Analysts reckon it is producing a profit of about $200 million on a turnover of $1 billion this year, mainly from advertising. Google's decision to float, first mooted a fortnight ago, has not been greeted with unalloyed joy. Investment banks are furious about its plans to sidestep them and issue shares direct to the public.

Analysts are concerned that the huge valuations being put on Google are unsustainable, heralding another dotcom boom - and bust. Experts ask if Google's superiority will last in the face of competition from Microsoft, which is developing a rival search engine if it fails to buy Google itself.

Meanwhile Yahoo! which uses Google technology, is likely to drop it in favour of its own version. And Google's main supporters, the computer geeks who have watched its progress from a fledgling technology platform to the world's largest search engine, are filling up the chatroom message boards berating the pair for abandoning their roots and 'selling out'.

If Microsoft - still seen as Satan by many - buys Google, the opprobrium will be worse. For Google, for so long feted by the media and the computer literati, the backlash may have begun.

Source: This is Money.com

        

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