The future according to Google's Larry Page
By Miguel Helft,
senior writer January 3, 2013: 5:00 AM ET
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Google CEO Larry Page envisions a
future in which computers plan your vacations, drive your cars, and anticipate
your whims. Audacious? Maybe. But Page's dreams have a way of coming true.
Note: On Jan 3, as Fortune published this article,
the Federal Trade Commission ended its investigation of Google's search
practices saying it found no evidence that
the company manipulated search results in violation
of antitrust laws. The European Commission and other regulators continue to
investigate the issue.
FORTUNE -- When Sir Martin Sorrell, CEO of WPP
Group, the giant advertising agency, visited Google this past fall, CEO Larry
Page sent a car to pick him up at the Rosewood Hotel about 20 miles away. Only
this was no ordinary car. The Lexus SUV drove itself thanks to a slew of
high-tech tools, including radars, sensors, and a laser scanner that takes more
than 1.5 million measurements every second. For about 20 minutes, while
navigating I-280 and the area's busy State Route 85, the car cruised on
autopilot, making quick course corrections, slowing down here when traffic
loomed ahead, speeding up there to get out of the blind spot of a neighboring
vehicle. "It was pretty incredible," says Sorrell.
Page's chauffeurless car service is no mere parlor
trick. It is, as Page will tell anyone who'll listen, the future of
transportation. Never mind that most people think the mere idea of
computer-driven cars is (1) preposterous, (2) dangerous, or (3) not much fun.
Page makes the case for self-driving cars with the dispassionate logic of an
engineer. The father of two young children, Page insists that his pet project,
when ready, will actually
enhance safety . Soon Google will be able to
simulate your driving, "but just make sure you don't die and kill anybody
else," he tells me during an interview in the private "bullpen"
where he meets with his top lieutenants. He methodically enumerates the other
advantages of driverless cars. There are energy savings (traffic would flow
more efficiently) and productivity gains (commuting hours reclaimed). There
will be cost savings too -- in the millions of dollars at Google alone. The
Googleplex, he says, is short on parking, and quotes for new garages have come
in at $40,000 per car. Why not let the car drop you off and go park itself
offsite? Page asks. "Whenever you need it," he adds, "your phone
notices that you're walking out of the building, and your car is there
immediately by the time you get downstairs."
Sounds like a crazy mashup of the Jetsons and the
'80s TV show Knight Rider. But that's just the
kind of future Page wants Google to create, and the kind of big idea that
excites him. Since Google's founding in 1998, Page and cofounder
Sergey Brin set out to
build a company that made long-term bets on audacious ideas. Many quickly
became essential products. And it was Page who was known for championing the
craziest ones, like photographing every inch of every street to create a
digital replica of the real world, scanning every book ever printed to
assemble the world's largest
library , and building a
machine that could translate between any two languages (4,200 pairs of
languages to date). So when Fortune set out
to understand the future of computing, machine learning, and even
transportation, we turned to Page to learn about how Google is reinventing just
about everything -- including itself.
Outlandish ideas and effective, pragmatic
management rarely go hand in hand. What's remarkable about Page is that while
he's been pushing his engineers and executives to pursue big dreams, he has
also been running a complex $38 billion business of 53,000 workers with
surprising efficacy. When he took over in
April 2011, Google's once-phenomenal innovation engine was showing signs of age,
and bureaucracy was beginning to take root. Page quickly reorganized the
company to give top executives more responsibility and accountability and to
sharpen Google's focus on a handful of product areas. The result is a more
top-down and aggressive organization. The changes have ruffled the feathers of
some old-timers who miss the more freewheeling ways of Google's first decade.
But almost everyone agrees that Google is running more cohesively and faster
than when Page took over. It's a feat that has surprised many in Silicon
Valley, where Page's wonkish, diffident persona is legendary. "Larry's
substance has been so high, and his ability to run the company so impressive,
that he has overcome all those things," says Ben Horowitz, the
entrepreneur and venture capitalist who often coaches first-time CEOs.
"It's fairly shocking how well he's done."
Tangible results are everywhere. Google's rank and
file is more energized, and the company's products work better together. Page
killed dozens of nonessential or unsuccessful projects, like Google Health,
heeding the advice he received from the late Steve Jobs to focus. He slowed the
exodus of key employees who were leaving
for Facebook (FB ) and other
startups. Indeed, some ex-Googlers actually are coming back. Page successfully
pushed Google into the hypercompetitive world of mobile computing, building on
the strength of its Android operating system -- an acquisition Page personally
championed. Perhaps most important, under Page's leadership Android and YouTube
have become sizable businesses, silencing critics, includingFortune, which had frequently called Google a one-trick
pony. (Desktop search still accounts for roughly 80% of Google's business, but
display ads, mostly from YouTube, are now a $5 billion annual business. Mobile,
which includes search on phones, brings in $8 billion.)
Still, adding Page to the annals of great
CEOs at this point
would be premature. While Page has done much to restore Google's sense of
urgency and competitive edge, the company continues to face enormous
challenges. The battle with
Apple (AAPL ) for dominance in
mobile computing is as fierce as ever. Amazon (AMZN ) has become a de facto search
engine for shoppers , capturing search queries that were
among the most lucrative for Google. Investors remain unnerved by the prospects
for advertising, Google's core business, on smaller screens. A few things worry
Google more than the possibility of head-on fights with regulators. Years-long
government probes in the U.S. and Europe could still result in blockbuster
antitrust cases that could gum up the gears of innovation for years to come.
Then there is the matter of Page himself. He is a
quirky introvert who lacks the outsize charisma of a typical CEO. At 39, Page
has a full head of graying hair, bushy eyebrows, and a toothy grin that often
broadens into an impish smile when he describes one of his seemingly crazy
ideas. His typically soft monotone is now often tinged with hoarseness, the
result of an unspecified vocal cord problem that kept him from public speaking
for months. Those who know him well say he is personable, with a low-key sense
of humor and a healthy mix of humility and confidence. But Page is intensely
private, and to outsiders he often comes off as arrogant; his conversation
with Fortune in November was only the second
wide-ranging interview he has done with a print publication since becoming CEO
nearly two years ago. To Wall Street and much of the outside world, he remains
a mystery. "It is difficult to comment on him because we've had zero
access," says Ben Schachter, an analyst at Macquarie Group. The lack of
communication, Schachter says, is particularly frustrating in light of some of
Page's big strategic bets. "When you spend $12 billion to buy Motorola and
don't explain what the strategy is, it makes it difficult for investors."
For years, Page and other Google execs have mused
about the perfect search engine. It would always understand what you mean. It
would know you and would deliver results tailored to your interests. And it
would give you answers to things that matter to you -- even when you didn't
ask. Late in 2011, during an offsite meeting with his top brass, Page insisted
it was time for Google to begin to deliver on the last of those promises, which
insiders sometimes call "assist" functions. That set things in motion
quickly. By January 2012 Googlers had developed an idea for a product that met
Page's exacting standards, and some six months later the company unveiled
Google Now, which is available on the latest generation of Android devices.
Using information from your calendar, e-mail, past searches, and location, the
mobile-centric search tool can alert you to leave for the airport immediately
so as to not miss your flight because an accident has traffic backed up along
the way. It responds to voice commands much as the
iPhone's Siri does -- and with fewer errors, according to many
reviewers. It can automatically update you on your favorite team's sports
scores, even if you didn't know it was playing. Says Alan Eustace, the senior
vice president in charge of search: "We're giving you something you didn't
ask for but that we think you should know."
That Google Now went so quickly from vision to
product is a testament to Page's reinvigorated Google. Page has long said that
the biggest threat facing Google is Google itself, and since becoming CEO he
has zeroed in on bloat, bureaucracy, and just about anything that slows
innovation. (His obsession with speed can take peculiar forms. He once asked
Sundar Pichai, the senior vice president in charge of the Chrome web browser
and other apps, to be mindful of the seconds it took executives to transition
onstage at companywide meetings. "You should come closer to the stage and
stand, so you don't make the company wait," Pichai remembers being told.)
MORE: Meet the L-Team
Page's most sweeping effort to pick up the pace at
Google was a major corporate
reorganization instituted
early in his tenure. He scrapped Google's old structure, made up of massive
engineering and product-management groups, and replaced it with seven
product-focused units dedicated to areas like search, ad products, Android, and
commerce. The executives heading each of the units now have full responsibility
-- and accountability -- for their fates. Getting a new project started no
longer requires convincing executives from across the company to get on board.
And once a product ships, engineers and managers can't jump to the next thing
so easily and leave important products like Gmail in unfinished
"beta" versions for years, says one of Page's closest advisers.
"Now you are accountable not only for delivering something, but for
revising it and fixing it," the adviser says. In the reshuffle, some
executives got less prominent roles, and some chose to leave. Among them was
Marissa Mayer, Google's first female engineer, who became CEO of Yahoo in July. But by
and large, turnover in Google's top ranks has been minimal.
The seven product executives form the core of the
"L-Team" -- short for Larry's team. They meet every Monday at noon in
one of the conference rooms in Page's executive suite. The meetings can last
two hours or more and are often followed by huddles involving a subset of the
group to hash out issues that emerge across teams or to focus on products that
are lagging. Page, who before becoming CEO was at times distracted or staring
at his laptop during management meetings, is now very much in charge.
"There is no Larry on his laptop anymore," says a former senior
executive who left in 2012. Meetings always end with action items, which Page
never forgets, Pichai says. The new structure has allowed Page to impose his will
more effectively and to drive his vision for Google's services. From the
beginning he emphasized design and strove to create a more unified user
interface across Google's disparate products. Now, whether you are on YouTube,
the Google homepage, or Gmail, menus have a consistent look and feel. And
features of Google+, the company's social network, are now woven into a variety
of products on the web and on Android. "For the first time, someone is
thinking across Google products," Pichai says.
Getting everyone in sync with his vision has not
always been easy. It involved breaking ties when product execs couldn't agree
-- something that by all accounts Page excels at. And it involved setting a
high bar. A member of the L‑Team recently confided in board member Diane Greene
that Google's top brass had never been pushed to work so hard.
MORE: Google - No. 73 on
the Fortune 500
Page easily, and sometimes unexpectedly, shifts
focus from day-to-day management to long-term product plans. On a flight not
long ago, Page pulled Nikesh Arora, Google's chief business officer, to a
window. As they flew over Nevada, Page pointed out the desert site where the
Burning Man festival (which Page, co-founder Brin, chairman Eric
Schmidt , and countless
Googlers have attended) takes place every year. As the two looked out the
window, Page began musing that Google could improve its map imagery by sending
low-flying planes to crisscross the United States. As they spoke, Page came up
with a rough calculation of the cost. Google Earthnow offers 3-D
views of many cities, a feature developed with images it took with low-flying
planes and helicopters. "He tackles problems from a very different
perspective," says Arora. "It forces you to rethink things."
Page has been rethinking things since an early age.
The son of parents who taught computer science, he was raised in Michigan,
where he attended a Montessori school, which nurtures independent thought.
After earning a computer engineering degree at the University of Michigan, he
went to graduate school at Stanford, where he met Brin. "He would find an
idea that was a bit crazy and say, 'That's what I want to do,' " says
Terry Winograd, Page's academic adviser. Among Page's more far-out ideas was a
plan to download the entire web to study how sites related to one another.
Winograd advised against it. "It was crazy to think that a student could
do it," he says. Page did it anyway, and the effort led to Page's and
Brin's development of Google. Page and Brin also defied convention in 2001 when
they decided to run Google as a troika with power evenly distributed among the
founders and Schmidt, who was CEO. (Schmidt remains executive chairman, and
Brin oversees Google X, the unit responsible for self-driving cars andGlass, the
prototype augmented-reality glasses.)
Now that he is CEO, Page is willing to sow dissent
as he rethinks Google. While cutting products became a
matter of pride under Page's mandate to focus, those who had worked on
shuttered products were often dismayed. Google's popular 20% time, which
allowed many engineers to work on their own ideas one day a week, has been
severely curtailed. "They believed in bottom-up innovation, in trying lots
of things and seeing what stuck," says a senior manager who has since left
for another company. "But that thinking shifted very dramatically."
Internally, some old-timers who were close to Page also grumble that he has
become less accessible. There is no question the once-open Googleplex has
become more compartmentalized. Areas where the Google+ and Android teams work
suddenly began to require special badges. Page's own suite is on the top floor
of the Google+ building. Security is so tight that even Laszlo Bock , the senior vice
president in charge of people operations, received an e-mail reprimand after he
held the door open for someone. "I got busted once," Bock says.
"They reminded me that even if you are going in with someone, you should
badge in." Bock says the access restrictions made Googlers "very
grumpy." Page disregarded the complaints because he considered the
restrictions important to guard particularly sensitive projects. "Larry is
more inclined to tolerate disharmony and conflict," Bock says. In what
Bock says is a sign of his flexibility, Page lifted the badge restrictions on
the Android area when they were no longer necessary.
Page pushes willingly and forcefully past obstacles
with an overriding purpose: to make sure Google succeeds in the post-PC era . In March, for
instance, Google raised hackles among some users and consumer advocates when it
made sweeping changes to its privacy policies. The older policies limited how
data could be shared across Google products and stood in the way of services
like Google Now, which draws personal data from various sources. To Google,
tying these capabilities together is essential as users shift from PCs to
mobile devices, where apps must be more tightly integrated with one another and
where hardware and software must work seamlessly.
It's also part of an effort to skirt a problem that
is nagging many tech companies that have become giants in the web era: the fact
that mobile screens
aren't as friendly to ads as larger PC screens. Page says
the opportunities in
mobile will actually increase with better targeting of people's location
and services like "click-to-call," which allows mobile-phone users to
call with a single tap a business listed in an ad. "I'm optimistic that we
can make more money than we do now, because the software's better, devices are
better, and there are more capabilities," he says. Others share his
optimism. WPP's Sorrell, who famously called Google a "frenemy," says
that the search giant is now a "friendlier frenemy." WPP, Google's
largest customer, increased its spending on Google by 25% in 2012, to about $2
billion. Says Sorrell: "It's a remarkable company in a very strong
position."
In September Google introduced a new YouTube app
for the iPhone and iPad in response to Apple's decision to remove pre-installed
YouTube software from those devices. In early December Google upgraded Google
Now to include some of the functionality of Apple's Passbook. Then Google released a
new version of its maps for iOS, giving users another alternative
to Apple's
error-riddled mapping application, which the Cupertino, Calif.-based
company introduced in 2012 to replace Google Maps. So goes the tit for tat in the
war between the two giants of the mobile world, which is being fought not only
in the marketplace but also in courtrooms across the globe. "It would be
nice if everybody would get along better," Page says.
Despite the pitched battles, the two companies
continue to work together when necessary. "We have a big search
relationship with Apple, and so on, and we talk to them and so on," he
says. Page has met with Apple chief Tim
Cook to try to
resolve the protracted
patent disputesbetween Apple and makers of Android phones. While they have made
progress in some areas, a broader agreement has proved elusive.
It's hardly the only battle on Page's hands. In
early December, Microsoft (MSFT ) took out
full-page ads in major newspapers to warn users, "Don't get
Scroogled." The attacks were aimed at Google's decision to turn its
shopping search engine into essentially a bunch of ads. Earlier in 2012, Google
changed its free shopping service into one where online stores pay to be
included. It wasn't lost on Microsoft, or anyone else who has followed Google
for any length of time, that Page and Brin had long considered so-called paid
inclusion "evil" because it leads to inherent bias in search results.
What changed? Page doesn't directly address the issue. He says the move to a
"bid model" was necessary because a search engine for shopping can't
rely only on information scrapped from the web. It needs "really accurate,
really high-quality, great information," Page says, and Google gets that
information from merchants who pay to be listed. The explanation has fallen
flat with many longtime Google watchers. "They have done this 180-degree
reversal, and it looks bad," says Danny Sullivan, the editor of Search Engine Land. "It's a stunning change."
Stoked by Microsoft and other Google rivals,
government officials in the U.S. and Europe have been exploring related
questions about bias in search: whether Google favors its own services, be they
maps, reviews, or shopping, at the expense of services like Yelp (YELP ), andpossibly in
violation of antitrust laws. Page remains unapologetic. Google's
goal, he explains, is to help its customers; by integrating its travel,
shopping, and review tools, for example, Google could offer a service that
could "basically vacation plan for you," Page says. It would take
your preferences, combine them with information about weather, hotel, and
airline prices, and suggest a vacation plan. Says Page: "I don't think the
companies that are complaining about various components of what we do are
trying to do that."
Some investors are nervous for other reasons. Page
has not convinced many outsiders that some of his biggest bets make sense.
While the company has touted the success of
Google+, its answer to Facebook, many analysts say they see little activity on
the social network. More important, many are still trying to understand how Motorola
Mobility will fit into the
Android ecosystem. Google, which bought the company mostly for its
patents, has cut jobs and soldMotorola's
set-top-box business for about $2.35 billion. But
Google plans to hold on to the company's smartphone and tablet units, a move
that makes it a competitor with its other Android partners. Google says that
Motorola will not receive special treatment. Internally, Google has kept the
head of Motorola, Dennis Woodside, away from the L-Team meetings to avoid
conflicts over Android. Page says Google is focused on working with Android
partners to create innovative devices that are widely distributed, all the
while keeping those partners happy. "I think we've done a pretty good job
of that so far." But concerns remain that any Motorola successes could
chill the close relationship Google has established with Samsung, HTC, and
others. David Yoffie, a Harvard Business School professor (and HTC board
member), says, "There is no reason to believe that they can do hardware
more effectively than their partners." Translation: Google's hardware
foray is a case of Apple envy.
It's hard to wrap your head around the idea of
driverless cars until you
ride in one. When you do, it's almost frightening to realize how natural it
feels. I jumped into the back seat of one recently, as Dimitri Dolgov, a Google
X chauffeur engineer, sat behind the wheel. He drove from the Googleplex over
to Highway 101, where, with the push of a button, he put the car on autopilot.
It didn't feel that different from someone turning on cruise control. And for
the next 15 minutes or so, as Dolgov turned around to chat with me, the car did
its thing flawlessly. Surprisingly, I felt very safe.
Google's self-driving cars are not ready for prime
time yet, but they have cruised through hundreds of thousands of miles of
California roads without incident. Schmidt likes to joke that they already drive
more safely than a drunken driver and will only get better with time. Self-driving cars are still a
small project within Google that many outsiders, including investors, think of as
little more than a flashy, fanciful science experiment. But to Page and Brin
it's a serious endeavor with commercial opportunities. "We are definitely
optimistic that they not only are transformational for the world but that they
will be good business," says Brin, who oversees the project. Consider
this: Google has successfully lobbied to make driverless cars legal in
California, and in November it hired the deputy director of the National
Highway Traffic Safety Administration to be director of safety for the project.
Page won't say what crazy idea Google's factory of the future will come up with
next, but it is clear that there will be many more. "Not enough people are
focused on big change," he says. To Page, that's as much a fact as it is an
opportunity.
A previous version of this story mistakenly said
Page received a degree in computer science. He received a degree in computer
engineering. It also implied his mother was a computer science professor. While
she taught programming, she was not a full professor. Fortune regrets the
errors.
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