By the end of 1999 Google was averaging 7 million searches per day, but its revenue remained small. No wonder that the company’s investors insisted on paid ads. But Sergey Brin and Larry Page didn’t want Google to flounder, because they could not accept anything that compromised the relationship of trust with their users, even if it brought a lot of money for Google. So they conflicted about ads, suggesting that “the better the search engine is, the fewer advertisement would be needed for the consumer to find what they wanted”. A few search engines accepted money from the Web sites for placing them in search results. But Brin and Page found it “particular insidious” form of bias and avoided any such payments.
Google’ leaders started with an assumption that advertising was a type of information that some users might want and not all ads violate the Don’t Be Evil Google’s motto. So they found another way to profit: running targeted “text only” ads that were triggered by users’ search request. The new business strategy was to continue to produce free search results, and profit by selling ads. After talking to many experts and users as well Brin and Page became persuaded that as there was a clear difference between news and ads in newspapers, they could get the same thing on Google.com. They kept the homepage free of ads and developed strict standards for the size and type of ads they would display elsewhere. They decided also to make a clear line between the free search results and ads which were labeled “Sponsored Links”. So nobody could argue that the search results were mixed with ads, yet the ads would be clicked on more than simply labeled “Ads”
First they priced ads in the traditional way - based on the size of the audience. But after some testing they decided to display the ads in a clearly marked box above the free search results. They want a user to have a good experience so they backed out pop-up or other graphics. The ads were to be brief and look identical. Initially Google sold them one by one, mostly to larger businesses that could afford massive ad campaigns. But soon Brin and Page moved to a model that enabled advertisers to sign up easily online themselves. This cuts costs, attracted midsize businesses, and gave Google an edge over similar services that had a lag between the time advertisers submitted copy and when the ads appeared. After the months Brin and Page had another breakthrough idea: ranking ads based on relevance, as they did with their free search results. Instead of merely displaying an ad from the vendor willing to pay the most, Google ranked its ads based on a formula that took into account both how much someone offered to pay and how frequently users clicked on the ad. More popular ads rose to the top; less-popular ones drifted down-ward. Thus Brin and Page trusted their users to rank the ads.
Brin and Page did not invent search advertising, but they became first to make it cleverly and with more integrity than their competitors did. Obsessed by the idea of staying relevant and honest to their users Google’s leaders developed new market niche – “context ads”, which became the main Google’s source of revenue and made the company unexpectedly profitable.
David A. Wise, The Google’s Story, 2005
