Although AdWords was a new media advertising effort, it borrowed an old media CPM (cost-per-thousand) model. Much in the way that a television network might know that millions of viewers were exposed to a thirty-second spot, but not whether they actually watched it or made a purchase because of it, advertisers paid based soley on the number of times their ad appeared. There was a link to the advertiser allowing users to learn more about a product, though Google did not get paid if the user clicked through. The program was also limited in that Google could not easily syndicate AdWords to partners because GoTo had already tied up other search engines, making Google less attractive to advertisers. In addition, prominent advertisers were not inclined to place their dollars on search keywords. Giving credence to something that seemed so puny was alien to the brand advertising they were accustomed to. Because Page and Brin insisted that all advertising be relevant to the keywords, Google only allowed ads to appear in 15 percent of all searches, which meant that Google was forgoing advertising dollars if the ads were not judged “relevant.” Page and Brin liked to boast that Google could move on a dime, but their company was moving ever so gingerly to embrace advertising.

They were moving too gingerly for Doerr and Moritz, who admit they were frustrated by Google’s mounting losses. In the eyes of investors, the issues of monetization and management were twined. Good managers would impose the discipline every profit maker requires. “The understanding when we invested was that a CEO, among others, would be hired over time,” said Moritz. The venture capitalists finally persuaded Page and Brin to hire a headhunter to find a CEO, but the young founders were resistant, fearful that “a suit” would subvert the Google culture. They met with about fifteen candidates, all accomplished executives who were invited to attend TGIF, to share meals with the founders in the cafeteria, to sit in on staff meetings. Brin went heli-skiing with one prospective CEO who boasted that he was an expert at the sport. (He wasn’t.) “They thought everyone they had talked to was a clown,” Paul Buchheit said. “The candidates didn’t understand technology.” Omid Kordestani said Page and Brin “knew in their gut that they wanted a fellow intellectual.”

The VCs feared the founders would find an excuse to reject every candidate, which was true. Marissa Mayer said she believes the CEO search was so protracted in part because “they were not convinced it needed to happen.” Mayer knew Page and Brin’s thinking. She was a central member of the engineering team. And she and Page were dating, as they would for about three years. Like most company founders, they believed they could better manage their baby, better ensure the implementation of their vision, better preserve the culture. Asked if the founders resisted, Moritz now responds like a State Department official: “They resisted hiring ordinary people, and that’s a wonderful tribute to them. One of the many lessons I learned from the Google investment is the importance of hiring spectacular people. Sometimes it frustrated us, but they were spot-on.”

Moritz, however, did not feel that way at the end of 2000. “All of us on the board, in particular John and Mike, felt we needed someone who had been there, done that. You can call it adult supervision,” said Ram Shriram. Caught between the VCs and the founders, his “job was to keep the two sides talking,” he said, describing his role as that of “a coach.” Some at Google even feared a VC coup. “The VCs figured, ‘Once we get a CEO in there we’d get control,’” said one early Googler.

Doerr and Moritz arranged for Page and Brin to meet with the founders of other Valley companies, such as Intel, Intuit, and Apple, to talk about management issues. “We like Steve Jobs!” Page and Brin chorused, to the annoyance of the VCs and, eventually, to the consternation of other Google executives. One new hire that year, Tim Armstrong, the president of advertising and commerce, said, “It was chaos when I got to Google.” Executives were needed to manage the brilliant engineers and help set priorities, he said. Under pressure internally and externally, the founders interviewed two computer scientists who met their standards, said Marissa Mayer. One was from New York, the other from the Valley. Both were offered the job, she said. But the New Yorker did not want to relocate his family, and the other thought he was on the CEO fast track at Intel. Both declined the offer.

By the end of 2000, Google had indexed one billion Web pages. But no CEO had been hired, nor had any professional managers, and there was still no clear path to making money. Google had built it, the traffic came, but the revenue had not followed. The venture capitalists worried that Page and Brin were humoring them-and maybe leading Google astray.

(2001-2002)

While Google’s venture capitalists fretted that Page and Brin were spinning their wheels and that the company cried out for professional management, the Internet was growing and changing at warp speed. January 2001 brought two innovations that profoundly disrupted the existing order. Steve Jobs launched Apple’s iTunes application, and within seven years, iPod owners had purchased and downloaded five billion songs. Already reeling from piracy, the big four music companies felt compelled to allow individual songs to be sold at a price Apple chose (ninety-nine cents), inevitably undermining the sale of entire CDs, the centerpiece of their business model. That same January, Jimmy Wales and Larry Sanger launched Wikipedia. Within seven years this nonprofit effort would contain ten million entries in 253 languages, changing the way people gathered information. Wikipedia and iTunes were reminders, as if any were needed, that we had entered the dawn of a new digital democracy that granted more power to individuals.

Page and Brin were convinced that Google would become an even more profound disrupter of the existing order. Their philosophy, Page told a class at Stanford, can be distilled into two words: Don’t settle. He defended the exhaustive process of hiring at Google, and finding managers who respected and nurtured Google’s engineer-is-king culture. But there were too many kings. It wasn’t until January 2001 that Google finally hired its first vice president of engineering operations, Wayne Rosing, who had held a series of senior management positions at Apple, Sun Microsystems, and the Digital Equipment Corporation. The process was laborious, but eventually Rosing was hired. That was “the real turning point,” said employee number 1, Craig Silverstein. “He brought a professionalism to management we had not had before.” When he stepped into the chaos at Google, a shocked Rosing found that one senior engineer “had 130 direct reports.” Instead of doing what most companies did by relying on financial management software made by companies such as Intuit, Page and Brin had insisted that Google engineers invent a new system.

DOERR WAS EAGER to find a CEO for Google, and thought his friend Eric Schmidt might be a perfect fit. Because Schmidt held a Ph.D. in computer science-making him the rare professional manager who could speak the language of engineers-and did not have an oversized ego, Doerr assumed he could work with the founders. At the time, Schmidt was the chairman and CEO of Novell, a computer networking and software company then in the midst of a merger with Cambridge Technology. He wasn’t thrilled with the job; the commute from his home in the Valley to Novell’s headquarters in Provo, Utah, was arduous, and Novell was underperforming. One night, Doerr and Schmidt were chatting at a cocktail party. Doerr asked Schmidt what his plans were, and Schmidt said he hadn’t thought deeply about it.