2006 Founders' Letter

From the December 31, 2006 Annual Report [HTML | PDF 1.15M]

Introduction

There are few things as powerful as human passion. On the Internet, we see it in blogs, videos, and social networks, through many voices with a story to tell, eager to be heard. Over the past year, there have been many developments at Google I would like to share with you - products, partnerships, and milestones. There are many feature lists, statistics, and technical accomplishments behind them. However, what really inspires me are the words of the people whose lives we touch. While in the past Larry and I have taken turns writing this letter, this year I would like to give a voice to these people so you can hear just as I do how Google affects their lives.

Search

Search remains the heart of Google. Every day, millions of people search on Google for information either for themselves or someone close to them - information that can help their careers, their education, or their health. Sometimes it is just a casual curiosity that sends them searching, but at other times, their need for information can be critical - and what they find can even save a life. That is why we work so hard to provide the best possible information for every query, on any topic, in any language, in any country.

I found some minor swelling after feeling minor pain over a couple of days. A Google search brought up several pages with links to articles, all pointing to the same type of cancer... Without Google I would have ignored and possibly forgotten about the incident until it would have been too late. Google also helped me find the doctor who checked me out the very next day, and who organized surgery for the very same day he identified the cancer. It took me a long time to write and express my thanks to all of you who are working there. You are life savers!

- PETER MACKENZIE

Our search must also work well for different levels of expertise. Sometimes it is patients who seek medical information on Google, but other times it is doctors themselves. To go more deeply into technical fields, we have developed Google Scholar™, the most comprehensive search for scholarly work. And we also launched Google Patent Search as well as News archive search, which adds nearly 200 years of newspaper archives to Google News™. In addition, information providers and individuals can now help us improve search within their fields of expertise by creating Custom Search Engines on their own sites that provide more specific search results related to their interests.

Like many people on the Internet, I use Google so many times daily that I hardly remember a time without it... Recently, I had a similar realization while using Google Scholar to search the medical literature. Potentially, Google Scholar can instantly direct you to the most important papers in any field anywhere you can access the Internet, and many of these papers are now available online. I use it at least several times weekly and sometimes daily... A seventy year old woman with neurofibromatosis came to me with severe hypertension. I was initially concerned that she had a pheochromocytoma, which is associated with neurofibromatosis. To look for other associations, I searched ["hypertension and neurofibromatosis"] in Google Scholar, which revealed that renal artery stenosis from vascular neurofibromas was also possible. We looked, and that's what she had... A second patient was referred to me complaining that he had stopped sweating three months ago. I'd never seen anything like this before. So I searched Google Scholar, which quickly directed me to the literature on acquired idiopathic generalized anhydrosis, a rare neurologic disorder. I sent him to a neurologist for a skin biopsy, and this confirmed the diagnosis.

- JOSHUA SCHWIMMER, MD

"Aren't 'X' billion pages enough? Who needs more search results?" I hear questions like this often. The answer is, "We all do." When you are looking for something specific, like a particular person or place, comprehensiveness is the difference between finding a long-lost relative or love, and not.

The first time I used Google... I put in my name to see what would come up on me. Imagine my surprise when I found another 3 women who shared my name... one of the other Una McGurks I found on Google is a survivor of the 1998 Omagh bombing, which was just miles from the farm where my father was born and raised on in Tyrone, Northern Ireland. I ended up planning a trip back to Ireland to find the other women with my name... So, I have Google and global awareness to thank for tracking down 3 long lost relatives who share my unusual name.

- UNA MCGURK

I looked up my first love, whom I had not seen nor spoken to in 22 years, via Google. Long story short - we're getting married... Thanks Google!

- JOSHUA BYRON

Stories like these help us understand just how important it can be for people to have comprehensive search results. In the past year, we have increased our search index size by billions of documents, leveraging continued infrastructure improvements to our indexing system. This has increased capacity and improved refresh time. We also launched Webmaster Central as the place for webmasters to get information about how Google crawls and indexes websites, and to find tools such as Google Sitemaps™ to direct our crawler more efficiently.

Books

A comprehensive search engine is not restricted to the Internet. Much of the highest quality information in the world may be found in tens of millions of books tucked away in libraries and on publishers' shelves. These books can be tremendous assets - but only if people know that they exist. Google has embarked on a mission to digitize the world's books and make them discoverable, simply by searching online.

Book publishers benefit from wider distribution of their books. In 2006, we continued to add to our growing book index. We introduced four new partners to the Library Project, including the University of California, considered the largest research and academic library in the world; University Complutense of Madrid; University of Wisconsin-Madison; and the University of Virginia. Our Partner Program grew with new relationships and expanded agreements and now includes more than 10,000 publishers. Book Search is now available in 9 languages, and next year, there will be more.

Today users can search through millions of books to find popular, obscure, and beloved titles on every topic imaginable. Of course, Google Book Search is not just good for readers. Publishers benefit from increased exposure for their books.

At first, we didn't understand why all of a sudden we were getting a request for this older title. But when we looked at the reports from Google, we saw that it was one of the most-viewed titles over the past 15 days. Best of all, this book is not an exception. Our e-commerce sales have increased 60% across the board.

- GRACE GUINAND, INTER-AMERICAN DEVELOPMENT BANK

This year we also developed a new look and browsing interface for Google Book Search™ that makes it even easier to use. We're hearing from readers, researchers, and book lovers around the world that they are locating books more quickly and easily than before.

I was idly trying a search on "roads" to see what sort of a literature would turn up for the period of my dissertation research, 1740-1850. I didn't expect much. I've spent the last two years wandering through the Yale, Harvard, and California libraries, the British Library, Britain's National Archives, and the immense reserves of North American Inter Library Loan reading every book on London, pavement, or travel I could get my hands on. Surprise. In a single idle search I just added twenty extra full-text books to my list...Hallelujah, Google Books.

- JO GULDI, UC BERKELEY

Video

Sometimes text isn't the best way to communicate or understand an idea. If you are learning about a sport, an art performance, or a mechanical invention, video can be a far more compelling medium. This is one reason 2006 saw such a dramatic growth in the viewing and sharing of online videos. To this end, we have developed Google Video™ to search video, and this year we acquired YouTube™ - an incredibly dynamic and compelling way for people around the world to share their lives and express themselves.

YouTube has the largest online video audience and offers the most entertaining, original content on the Internet - with a community that continues to grow exponentially month after month. YouTube has struck more than 1,000 partnership deals with content providers looking to participate in this growing creative community - including Universal Music Group, CBS, BBC, Sony Music Group, Warner Music Group, the NBA, and The Sundance Channel.

YouTube users are clearly being entertained by the CBS programming they're watching as evidenced by the sheer number of video views. Professional content seeds YouTube and allows an open dialogue between established media players and a new set of viewers.

- QUINCY SMITH, PRESIDENT, CBS INTERACTIVE

In addition to professional content, user-generated content is central to the YouTube community experience. As more people capture special moments on video, YouTube empowers them to become the broadcasters of tomorrow. YouTube is a cultural phenomenon, winning the hearts and minds of an increasingly broad demographic. It has democratized the entertainment experience and created a new way for people to communicate across the globe. For example, when Leigh Buckley, a wife and mother from New Hampshire, was diagnosed with leukemia, she and her husband Andrew began chronicling her experience and posting the videos to YouTube. They have received an overwhelming response from people not only wishing her well but also organizing bone marrow drives.

Google is about connecting people with information. Online video is a new genre for connection that engages a new generation.

Local

People use Google products to learn not just about the farthest reaches of the universe but about places closer to home. Google Maps™ has become the #1 mapping site across Europe and #2 in the U.S., and now offers detailed street maps in more than 50 countries. We are pleased that so many developers have used our mapping technology as a platform for further innovation, and proud that more than 30,000 websites use our maps API. Local authorities in London now use the Google Maps API to let residents report problems such as road defects and trash on the streets. Google Maps is also available now on mobile devices and plays an integral role in our partnerships with mobile providers. We expect more and better local products to result from our work in the mobile space.

With more than 200 million unique downloads, Google Earth™ users worldwide are venturing out to explore, understand, and share our planet. Google Earth now covers more than half of the world's population and a third of the land surface in high resolution. We've found that one of the first things users do after launching Google Earth is look at their own home from space. Then they quickly discover that Google Earth lets them search and browse a growing web of geospatial content from community storytelling, 3D buildings, location referenced photos and historic maps to Wikipedia articles, United Nations and European Space Agency content, and even photos and stories from National Geographic and videos from Discovery Networks. Furthermore, Google Earth also enables people with limited resources to better understand the world around them.

We used Google technology to prove to the authorities that the land is fertile [so that the Indian government would compensate us at a higher rate in developing an SEZ (Special Economic Zone)].

- ARUN SHIVKAR

Mobile

We were shaken and quite upset [at learning that one of our newborn twins might require a blood transfusion, which is risky for small babies]. Armed with only a cell phone - and a very low battery - I was able to Google [hemoglobin 'premature infant'] and found a medical journal article claiming that it's perfectly normal for preemies to have their hemoglobin levels drop to 7 between the first and third months of life, and apparently this is especially true with twins. [I showed the Google results to the doctors, who eventually concurred that the risky transfusion was not, in fact, necessary.]

- HOWARD, GOOGLE MOBILE USER

In many regions, mobile is often a "first screen" device - the primary way users access information.

Here's a story that illustrates this global reality:

A Googler was vacationing in Africa recently and happened to be wearing a Google T-shirt. A local approached him, clearly very excited about Google News. Naturally, the Googler asked, "Do you know you can get Google News on your mobile now too?" To which the man replied, "How else would I get it?" Indeed.

We've made great strides toward universal accessibility, in no small part because we have forged relationships with some of the most prominent carriers and equipment manufacturers in the world. Motorola, Sony Ericsson, Vodafone, Nokia, Beeline, KDDI, NTT DoCoMo, Bharti Airtel, China Mobile, and Samsung are our partners, and we look forward to growing these relationships.

Our efforts in mobile are helping to drive adoption of the mobile web and create interesting revenue opportunities for our partners, such as the mobile ad pilots that we launched in more than a dozen markets in 2006.

The partnership with Google is making a substantial contribution to the very rapid increase in our customers' uptake of mobile search. Even more so, the performance of Google's Mobile Search Ads is greatly exceeding our expectations. We are strongly dedicated to keep developing our world of mobile Internet services through our continuing partnership with Google.

- TADASHI ONODERA, CEO, KDDI

Content, Collaboration, Community

We have worked to expand our offerings that enable users to manage their information - to create content, collaborate on it as a group, and then share it with the world.

Perhaps the most important online collaborative tool is email. Gmail's introduction in 2004 contributed to a new focus on webmail generally, including a shift from offering storage space in megabytes to gigabytes. Gmail™ has developed substantially, with the introduction of features like Gmail Chat, which brings together email and instant messaging.

I depend on my gmail and gtalk big-time! today, i got a notification that (yipee!) i had new gmail. anyway - it was email promoting a pre-sale for tickets to a huge concert...within seconds, i had checked my gmail, hopped on the ticket buying website, and am now sitting pretty with tickets secured, while the rest of the non-google-users are waiting in a buyers-queue/waiting-room server waiting to purchase... now i have tickets to the hottest show in town for an amazing price, as well as my sister's birthday present. you're the BEST!

- EMILY BOUCHARD

For better time management, we offer Google Calendar™ a free online service that we launched this year that makes it easy to keep track of your schedule and share it with friends. Google Calendar fits perfectly with our other online collaboration applications like Gmail and Google Docs & Spreadsheets™ designed for managing and sharing documents. This product combines both ease of use (nothing to install, just use your browser) along with powerful Internet capabilities like collaborative editing, access controls, and content available anywhere you can get to the web.

As I write this right now, other Google employees are editing this document (and making it "flow" - I confess I am difficult to edit).

Products that enable the discovery and sharing of content have become a dynamic force on the Internet. We want to support these activities for all types of information, including photos, documents, and blog content. For example, today we offer Picasa™ photo-organizing software and more recently launched Picasa Web Albums for online photo sharing.

My mother is happy about the ease of using Picasa and finds it a joy working with this service. [She] is not a computer guru, but has learned many ways that Picasa makes photo albums more fun than ever. Color pictures as far back as 1943 are an online testament to how Picasa has now become our family treasure and is bringing our family together. My mother hopes that the whole family will build upon her work and add to a priceless family treasure Picasa has given all of us.

- JAMES HERNANDEZ

Another focus is products that enable users to discover new people and learn more about each other. Orkut™ our experiment with social networking, is now part of the social fabric for the majority of online users in such countries as Brazil and more recently, India.

Finally, in the area of personal publishing for large audiences, we unveiled major updates to Blogger™ and Google Groups™ and introduced Google Page Creator™, which people can use to easily and quickly create professional-looking web pages. Our acquisition of JotSpot, collaborative wiki technology, is another demonstration of our commitment to this space.

Organizations are increasingly sharing these services with all of their users. In 2006, we developed Google Apps for your domain, which includes Gmail, Google Talk™, Google Calendar, Google Docs & Spreadsheets, Page Creator, and the Start Page. Arizona State University (ASU), with 65,000 students, has already implemented Google Apps across the university.

On the day of the announcement [that ASU was adopting Google Apps], students were converting to Gmail for ASU at the rate of 300 an hour... In addition to providing an exciting new service for students... the feat that Google and ASU achieved in the past fortnight displayed a nimbleness that rivals the best of what Silicon Valley can do... The range of technology solutions that Google is putting forward, at the speed and scale that they have proven they can deliver them, is sparking nothing short of a revolution in the IT business...

- ADRIAN SANNIER, CTO, ASU

Advertising

Our goal is to create a single and complete advertising system. Diversity in our advertising and publisher base continues to be central to our business and is important to our long-term success. Advertisers large and small use Google to reach their target audiences easily and get measurable ROI.

Last year we launched the AdWords™ Starter Edition, a simplified version of AdWords that lets users create an account quickly using a one-page sign-up form.

I was up and running in 15 minutes. For somebody like me who isn't comfortable with the PC, it was quite a revelation.

- COSMO BUONO, BBPIANO.COM

As more and more users look for local information online, we must continue to improve our ability to attract local advertisers. We have launched local business ads, local coupons, and refined local targeting so businesses can target customers right in their neighborhood. This year we partnered with companies like Intuit, Verizon, and AT&T to help us bring more business information online and convert more small businesses into happy Google customers. Small business is big business.

We have also gone beyond text for brand advertisers. Traditionally, video and other rich formats have been used exclusively by large advertisers because of their higher production costs and higher minimum spending requirements. However, our new clickto-play video ad format can serve ads to both large and small advertisers. In fact, video can be the best way for a small business to communicate its offerings in a genuine and personal way.

Since we started advertising our robotic guitar tuner with Google Click-to-Play Video Ads, not only have we seen a dramatic increase in sales, both in the USA and internationally, we've also had lots of inquiries from distributors all over the world who want to carry our product. I don't know of any other advertising that could have had this kind of impact... Now when people bring us exciting products to market, we know that Google's video ads can be our strongest new tool to help demonstrate and promote those products nationally or even internationally at a very reasonable cost.

- EVAN SHOFRON, ACTION MARKETING

And we're helping advertisers of all sizes buy and place offline ads more effectively. In January, we acquired dMarc™ Broadcasting to help develop a radio advertising product and now have more than 900 stations in more than 200 metro markets. In addition, more than 100 advertisers and 70 newspapers have participated in significant tests for print advertising. We believe these offline efforts are key to creating a complete ad system. We continue to roll out new pricing and account tools to help online advertisers better manage their campaigns. Last year the ads team launched Position Preference, which allows advertisers to set controls to have bids automatically adjusted to maintain a desired ad-position range. We also released Preferred CPC in beta, which enables advertisers to bid to an average CPC. To help improve conversions, there is now Web Optimizer for doing multivariate testing on landing pages. And for easier, more robust account management, there is AdWords Editor, a client-based application for making offline changes to AdWords accounts and uploading them later.

Effective advertising is just one component of ROI. Once a customer is on an advertiser's website, it's important that they find what they are looking for and complete a transaction. Google Analytics™ allows webmasters to easily monitor and optimize the design of their sites to make them as frictionless for customers as possible.

Every new piece of information we get from Google Analytics gives us 10 new ideas that can help our customers find what they need online. Google Analytics helps us prioritize what to try first, and then track success metrics around each change to make sure our assumptions are correct. Google Analytics is key to continuously improving our site and our customer experience.

- MIKE BOLLAND, DISCOUNT TIRE

Once a customer has decided to make a purchase, completing the purchase swiftly and easily is paramount. Google Checkout™ tremendously simplifies the buying process by enabling you to shop across the web with just your Google login. Checkout has done a great job of increasing conversion and driving leads. Initially launched last summer with just a few stores, it has now reached millions of registered users and signed thousands of merchants, including more than 100 of the top 500 online stores.

We always want to give our customers more choice and more convenience when they shop with us, and Google Checkout gives them both. In addition to the positive customer experience Google Checkout offers, we've also been very pleased with the benefits for our business. We're seeing great results as Checkout helps us acquire new customers every day. We've appreciated the increased sales as well as the ability to process transactions for free...

- TIM MCCUE, JOCKEY.COM

Early in Google's development we realized that great search depended on great content. To that end we created Google AdSense™ for content, which now enables thousands publishers to spend their time developing great material instead of having to sell ads themselves.

We'd tried all sorts of affiliate programs and they amounted to nothing... Without the AdSense program, [our] free service would never have been possible.

- ADSENSE PUBLISHER

Global

I've mentioned some of our global efforts earlier, but it's so important to us that I want to call out a few more facts here. Last year we added 44 domains so that Google is now available in 158 domains and more than 100 languages. Google News is now up to 39 editions, with launches in Hebrew, Arabic, and Russian. Gmail added Hebrew and Arabic to reach 40 total languages.

Google Toolbar™ is now available in 42 languages for Internet Explorer (26 for Firefox) and Desktop™ 4 is in 28 languages. And Google Groups 2 came out of beta and is available in over 40 languages. With international sources comprising 43% of Google's revenue in 2006, we continue to grow our global monetization efforts. AdWords added several additional language/country interfaces, and now supports more than 40 languages. AdSense for search and AdSense for content both added four new languages bringing their totals to 27 and 23 respectively. We also launched electronic fund transfer payments in 9 more countries and piloted a Western Union payment method in China and Malaysia to further extend payments in local currencies.

Our mobile initiatives, critical to worldwide access, also include these firsts: we integrated mobile search and our first syndicated mobile sponsored links with KDDI, Japan's second-largest mobile carrier; and we partnered with major mobile carriers and global handset manufacturers such as Vodafone and Telefonica.

We're also making great strides with our awardwinning machine translation system. We want it to vastly improve the web experience for users everywhere. We improved or added several new language pairs, including English to/from Chinese, Arabic, and Russian; we now have over 20 language pairs.

Google is committed to its investment in markets across the globe, and the advances mentioned above bring us closer to our goal of making Google accessible to people in more languages and in more countries - a goal we will continue to pursue in 2007.

Culture

We have worked hard to create and maintain a compelling environment for Googlers. We're building a culture rooted in transparency, innovation, and scale. Because we aspire to innovate as much on the people side as we do on the product side, we were honored to top FORTUNE's "100 Best Companies to Work For" list in our first year of eligibility.

None of what we do would happen without a global employee base. In 2006, we hired 4,994 full-time employees, and for the first time, half of our software engineering hires were outside our Mountain View headquarters, including significant increases in China, Russia, India, Brazil, and Europe. Employees outside the U.S. now make up nearly a third of the company, and many of them moved into new offices this year including Beijing, Trondheim, Istanbul, Tel Aviv, Copenhagen, Vienna, Taipei, Warsaw, Haifa, Moscow, St Petersburg, Sydney, Mumbai, Cairo, and Delhi. Having a presence in all these locations attracts Googlers who want to work where they already live, and contributes to local economies.

We have improved our benefits programs to include such things as more doctors on staff and many new cafes in different locations. We expanded our equity refresh program and introduced our Transferable Stock Options program. We launched a range of development programs including EDGE, which helps grow our engineers into better leaders. And we work hard to infuse Google's culture and principles into every office around the world, empowering employees to make contributions that help drive Google's overall success.

Working at Google Kirkland is a fantastic opportunity to get a team together and launch great things. We've got the advantages of a small environment that makes it easy to know everyone, coupled with Google culture that keeps us connected with Mountain View so we can work with teams there, rather than as an isolated island. This helps us develop search products like Google Webmaster Central, which is improving search quality and making a big impact for all of Google, not just our office.

- VANESSA FOX, GOOGLE KIRKLAND

These initiatives help us scale by attracting amazingly talented people, and then nurturing them as we preserve what's special about our culture. Whenever we open new offices, we strive to keep things "Googley."

The office culture is still relatively intimate, even though we've grown 200% since the office opened in September(!). The atmosphere is fun and engaging, and my coworkers are smart, funny and overall great people to be around all day. Even though we're a much smaller office than our Mountain View counterpart, we continue to have that Googley, welcoming feel.

- STEPHANIE DUCHAINE, GOOGLE ANN ARBOR

Our commitment to our employees is matched by a broader sense of responsibility to our user communities worldwide. Specifically, we recognize that access to information is a powerful tool to help identify and solve problems. We are committed to harnessing our resources to help address pressing global needs.

Sustainability is one example. Last fall we kicked off a project to install 1.6 megawatts of solar photovoltaic panels at our Mountain View campus. This project will be the largest solar installation on any corporate campus in the U.S., and we think it's one of the largest on any corporate site in the world. The amount of electricity that will be generated is equivalent to powering about 1,000 average California homes. We'll use that electricity to power several of our Mountain View office facilities, offsetting approximately 30% of our peak electricity consumption for those buildings. Our work in this area has just begun and we hope to do much more in the future.

This past year Google.org, our philanthropic arm, got off the ground by building out a leadership team. Among these new hires was Dr. Larry Brilliant, who joined us in March to serve as the head of Google.org. He is a great leader to help Google.org tackle its threefold mission of global health, global wealth, and the environment. While Google.org is ramping up, our existing philanthropic activities are still going strong. Google Grants puts our advertising program to work for charities and nonprofit organizations that don't always have equal footing in the traditional advertising business. More than 2,100 organizations in 16 countries have now been accepted to run targeted ads to reach their constituencies around the world.

Our current program is a smoking cessation site testing four Web-based methods to quit smoking. We are very appreciative of your support. Over 190,000 Spanish- and English-speaking users looking for help to stop smoking have clicked on to our site from your ads.

- DR RICARDO F. MUÑOZ, UC-SAN FRANCISCO

Since we first became a grantee, website activity has increased by a dramatic 400% and the number of youth we serve has increased by 20%. Our annual budget has increased 20% due in part to increased donor activity and increased community partnerships - both of which are influenced by our sponsored link positioning on Google.

- BRANDE MARTIN, MY FRIEND'S PLACE

This is just a start. When I write this letter in future years, I am optimistic that I can report significant progress on the global challenges that we hope to address through Google.org's work.

Thank you

We had a remarkable 2006. None of our achievements would have been possible without our passionate users, strong partnerships, and talented employees. As I read back over this letter, what stands out are the individual experiences of the people who use our products. It is an honor to share these pages with a few of them.

Larry Page

Larry Page

Sergey Brin

Sergey Brin

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