Skip to content
AcquiredAcquired

Google Part I: Origins of Search. How the Best Business in Human History Happened (Audio)

We tell the story of the single greatest business ever created: Google search. From its origins as a Stanford research project called BackRub, Google became the front door to the internet. Today it’s an essential service for over half the world, and one that generates more profit than ANY other US company — more than Apple, Microsoft, or Berkshire Hathaway. But it wasn’t always so obvious. When Larry and Sergey began working on BackRub in 1996, search was a backwater industry in silicon valley. Existing search companies were eking out a living as vendors to the then-dominant “portals” like AOL and Yahoo. Google’s come-from-behind success was the result of three massive step-function leaps forward in algorithms, infrastructure and business model… some invented by Google and some borrowed (and perfected!) by them. Today, things are not so obvious once again for Google. Despite earning more profits than all of its big tech peers, its stock trades at significantly lower multiples — a $1 trillion or more discount to Apple, Microsoft and Nvidia. Investors are concerned that AI will render Google’s beautiful business model obsolete, even though Google also basically invented modern AI and continues to lead on many dimensions. This episode begins a multi-part series where we dive into the full history that led us to this point. Tune in and enjoy! *Links:* - BackRub recreation: https://backrubsanford.neocities.org - Original Google logo: https://en.wikipedia.org/wiki/Google_logo#/media/File:First-google-logo.gif - Jeff Dean’s resume: https://drive.google.com/file/d/1WM65kvbrFMTtrwnkct4XzpCC8hqQe5ZX/view?pli=1 - Worldly Partners’ Multi-Decade Alphabet Study: https://worldlypartners.com/businesshistory - Episode sources: https://docs.google.com/document/d/13C0I8Bg4XLlBDtRBzPwimhlOeojpENhY52YSANrdhTM/edit?usp=sharing *Carve Outs:* - The Rehearsal with Nathan Fielder (Season 2): https://www.hbo.com/the-rehearsal/season-2 - Your Friends and Neighbors: https://tv.apple.com/us/show/your-friends--neighbors/umc.cmc.74o37kzay0yuuub8iumddjsg - Andor Season 2: https://ondisneyplus.disney.com/show/andor - Gamecraft Season 3: https://gamecraftpod.com - Steam Deck vs Switch 2 dilemma: https://store.steampowered.com/steamdeck/ https://www.nintendo.com/us/gaming-systems/switch-2 *More Acquired:* - Get email updates https://www.acquired.fm/email and vote on future episodes! - Join the Slack http://acquired.fm/slack - Check out the latest swag in the ACQ Merch Store https://www.acquired.fm/store! _Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions._

Ben GilberthostDavid Rosenthalhost
Jun 30, 20253h 39mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. BG

    All right, David, last episode we are doing in our studios before Radio City.

  2. DR

    Ooh, that's right.

  3. BG

    How do you feel?

  4. DR

    Uh, we're about to go from, like, the stage of one, [laughing]

  5. BG

    [laughing]

  6. DR

    Very, very small audience of one to the very, very big stage.

  7. BG

    Where if we make a mistake, no one will notice-

  8. DR

    Yeah

  9. BG

    ... and we just re-record it, and it's like it never happened. [chuckles]

  10. DR

    We should try that at Radio City. Just be like, "Ah, strike that. All right, let's take that again."

  11. BG

    Yeah. Hey, this is authentically Acquired, you guys. This is how we do it. You're getting a look at the inside. Probably not, though. All right, let's do it.

  12. DR

    Let's do it.

  13. SP

    Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Hmm. Is it you? Is it you? Is it you? Sit me down. Say it straight. Another story on the way. Who got the truth?

  14. BG

    Welcome to the Summer 2025 season of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

  15. DR

    I'm David Rosenthal.

  16. BG

    And we are your hosts. Artificial intelligence is the story of our time. It is definitively the next trillion-dollar technology wave after PCs, the internet, and mobile. And to understand AI, you have to understand the company most responsible for its technical foundation and the wave that came before it, Google. This episode begins our multi-part Google saga. Finally-

  17. DR

    Woo!

  18. BG

    ... as I'm sure many of you out there are saying right now, Google has been the front door to the entire internet for twenty-five years now, a quarter century, but it wasn't always this way.

  19. DR

    No, it was not.

  20. BG

    Back in 1998, when Google was founded, there were a dozen other search engines that already existed, and there were a variety of different business models, most of which were not very interesting.

  21. DR

    Yeah, none of which were very interesting. [chuckles]

  22. BG

    Yes. So today, we will try to answer the question: Why did Google work? And once it did, how did it go from clever technology and nice product to the single greatest business of all time? I'm not being facetious, listeners. Google, and I should say Alphabet today, generates more net income, or profit, than any other US company. More than Apple, Microsoft, ExxonMobil, J.P. Morgan Chase, Berkshire Hathaway. This is a cash gusher. It is, A, super high gross margin, B, in a giant market, and C, according to the US government, as of today, they are a monopoly in that market, with ninety percent market share. That is three enormous numbers multiplied together to create that most profitable company in the US stat that I threw out earlier.

  23. DR

    Well, I'm glad we don't need to get to, uh, the government and all that until much, much later in our series, but yeah, this is the creation of the most beautiful business of all time.

  24. BG

    And Google's market position has been seemingly unassailable, at least until really this year, until the AI war has really heated up. So of course, it was that clean user experience that everyone talks about, with just a search box on the homepage, and the focus on the users, and the high-quality, fast search that spread virally through word of mouth. But good product is far from the only reason that Google became dominant. So today, we'll tell the story of why, while Google was nowhere near the first search engine, it was the last.

  25. DR

    Well, you know, uh, Microsoft may take a little issue with that with Bing, but- [chuckles]

  26. BG

    [chuckles]

  27. DR

    But only a little issue. [laughing]

  28. BG

    Yeah, a little. Few percentage points issue.

  29. DR

    Few percentage points of issue, yeah. [chuckles]

  30. BG

    Well, listeners, if you wanna know every time an episode drops, check out our email list. It is also the only place where we will share a hint at what our next episode will be, share corrections, updates, little tidbits we learned from previous episodes. That's acquired.fm/email. After this episode, join the Slack to talk about this with us and the whole Acquired community: acquired.fm/slack. And if you want more Acquired between each episode, check out ACQ2, our interview show, where we talk with founders and CEOs building businesses in areas we've covered on the show. The most recent was with Jesse Cole from the Savannah Bananas. David, that was the most fun I've ever had recording [chuckles] basically any podcast episode.

Episode duration: 3:39:29

Install uListen for AI-powered chat & search across the full episode — Get Full Transcript

Transcript of episode v1nkN0sM2wc

Get more out of YouTube videos.

High quality summaries for YouTube videos. Accurate transcripts to search & find moments. Powered by ChatGPT & Claude AI.

iOSAndroidClaudeChrome