Schmidt achieved a cease-fire by asking the product team to make its slide presentation. It demonstrated how the new product would actually work for advertisers, allowing them to manage their accounts. The discussion now went round and round with Schmidt finally stepping in to summarize the technical changes that would be made, the engineering challenges, the different approaches proposed by the team and by the founders. As he spoke, I kept wondering: When Terry Semel was CEO of Yahoo, or John Sculley CEO of Apple, could either of those nonengineers understand what their engineers were saying? Could they challenge them? (I would ask this question of Semel, who said the Yahoo founders, Jerry Yang and David Filo, both engineers, often accompanied him to similar meetings. Besides, he said, “I’d make people describe things in English!”) Semel brought good judgment and people skills to Yahoo when he arrived in 2000, but the question begs to be asked: Did Yahoo slip technologically because the CEO could not wrap his brain around the technology? Was that why Apple slipped technologically after Steve Jobs had been fired? (While Jobs does not possess an engineering degree, he seems not to need a translator.)

Schmidt, sensing that a resolution was not possible at this Google meeting, told the product team to report back with a detailed design “which is responsive to Larry and Sergey’s criticism,” one that laid out “what it takes to build a good product,” and what it would cost in time and money. He took care to balance this rebuke with praise: “But this is very well done. I love it when people show me the flaws in our products.”

Neither founder was happy after the meeting. “I hope they try to do something a little more ambitious,” Brin said two days later. He compared the project to renovating a house. “Once you get into it, you know it’s going to take some time and effort, so you may as well do as good a job as you can. We prefer not to do too many small things when we know where we’d like to get to.” Page was disappointed in what he described as the engineering team’s “self-imposed, bureaucratic response.” He sounded harsh, and a few seconds later he softened his words: “It’s hard when you’re so focused to see the big picture. It’s sort of easy for us. We just say, ‘If you’re going to make changes at that rate, we’re going to go out of business. It’s just not OK. It’s all of our revenue. We’re obviously doing some things wrong. We need some sort of reasonable plan to fix these things in our lifetime. Our lifetime means years, not multiple years.’” Ultimately, Ramaswamy and his team came back with an AdWords 3.0 proposal that went more than halfway toward the one proposed by the founders; Google has been rolling out the new system in stages.

THE MEETING DEMONSTRATED that the ethos that had launched the Google rocket-to shoot for the moon, not the tops of trees-was intact, no matter how much the company had grown. Page and Brin’s passion for technology was apparent, as was the way they push engineers to act boldly. At meetings they feed off each other, punishing engineers and product managers who think they have devised a “new” solution when, the founders say, they have merely devised a “cute” solution, not a fundamental one. Or as Schmidt said, “They think about what should be, and they assume it is possible.”

Page describes his and Brin’s role as supplying the “big picture,” and by way of illustrating what he sees as a management rather than a technological innovation, he cites the work of Gordon Moore at Intel and his Moore ’s law. “People think it’s this wild statement about how the universe is, but it’s actually a management innovation. Moore ’s law was a statement saying, ‘We’re going to double the performance [of integrated circuits or computer chips] every eighteen months, and let’s get organized to do it.’ They spent billions of dollars doing that. If you didn’t have Moore ’s law, you wouldn’t have that advancement. It’s actually causal in another way.” The management pressure to double performance helps assure it.

IN SPITE OF GOOGLE’S RAPID GROWTH, or because of it, by 2007 the company had become a target for lawsuits and sneers. Leading the chorus was Microsoft CEO Steve Ballmer. In 2007, he had labeled Google “a one-trick pony,” and had derided the company at nearly every public opportunity since, telling reporters, “they have one product that makes all their money, and it hasn’t changed in five years… Search makes ninety-eight percent of all their money.” Irwin Gotlieb, who is not in Ballmer’s adversarial camp, nevertheless shared the view that Google’s attempt to broaden its reach had been a failure. “Google is extremely good with search,” he said. “They are good with AdSense. They are not as good with display advertising. I believe they’ve lost a fortune on selling radio ads, they’ve lost a fortune on selling print ads, and they are now losing a fortune on selling television ads.” Tad Smith, the CEO of Reed Business Information, which produces eighty publications and Web sites, asked, “Where is the new pony? Apple came up with a new pony, the iPod and iPhone. Microsoft came up with Office. Google is throwing a lot of things against the wall, and so far only one has stuck to the wall. And Google’s search growth will slow.”

Eric Schmidt had a ready rejoinder to Ballmer: “I like the trick!” And justifiably so: the trick yielded more than sixteen billion dollars in revenues and four billion dollars in profit in 2007. Schmidt went on, “The Google model is one-trick to the extent that you believe targeted advertising is one-trick.” Google now had about 150 products available, and he believed the other efforts-You Tube; DoubleClick; mobile phone products; cloud computing; selling TV, radio, and newspaper ads-could sell targeted advertising. Yet with almost all of its revenues pumping from only one of 150 wells, the question-can Google find another gusher?-was “a legitimate question,” as top Google executives like Elliot Schrage conceded at the time.

At the start of 2008 there was evidence that the gusher was tapering off. Search advertising was slowing. In January and February, comScore, a research firm that tracks online activity, reported that Google searchers were clicking on fewer text ads. Wall Street analysts predicted Google’s revenue rise would stall, and the stock price dropped; from its pinnacle of $742 on November 6, 2007, it had plunged 40 percent by March 2008. The press, lusting for a new narrative, fixed on this one: the Google rocket was crashing. “Goodbye, Google,” read the headline in Forbes.com. Reporters buzzed, incessantly, about dire days ahead. Google was spinning them, they believed, when people like Tim Armstrong explained that the company was trying to make the ads “more relevant” and had deliberately reduced the number of ads appearing with search results to reduce clutter and produce better information. Google said clicks without purchases meant the ads were not useful to the user, so they were eliminated. Reporters were deeply skeptical when chief economist Hal Varian in early 2008 cautioned, “The clicks are not what is relevant. The revenue is.”

But events would demonstrate that the press and Wall Street analysts are often handicapped by two imperatives: don’t be late with bad news, and don’t be the lone blackbird left on the pole. In April 2008, when the company released its first-quarter results, the narrative changed. Google’s revenues had surged 42 percent compared to the first quarter of 2007; its profits had jumped 30 percent, and as Varian had suggested, its ad clicks had risen 20 percent. “Google Inc’s Go-Go Era Apparently Isn’t Over,” said a report in the Wall Street Journal. The Times headline was: “Google Defies the Economy and Reports a Profit Surge.” As the report showed, Google hogged three quarters of all U.S. search advertising dollars, compared to only 5 percent for Steve Ballmer’s Microsoft.