Sergey Brin: Googling billions

23:48So Yahoo actually tried to buy Google for$3 billion. Just remember, three years earlier, they couldn't sell it for a million. Sergey and Larry turned the billions down. Yeah, they weren't going to sell up now. That is an absolutely crucial point. I'd like to think that I could take the long view and, you know, I'm going to be a centibillionaire. I'm going to have$100 billion one day if I stick to my guns. Turning down$3 billion when you're in your 20s, I'm afraid, I'm sorry, I'm out. It takes a lot of guts to stick around, especially when at the time Yahoo was huge compared to Google. Yeah. And so the next step for companies like this is to go public, have an initial public offering, a sale of their shares.

24:31Because what that means is that in future you can sell more shares in the company, you can raise more money. So going public is a big deal. Sergey and Larry were reluctant because they thought that once you start selling off stakes in the company, you start potentially to lose control. But they had an answer to this. Once again, we talk about the billionaire cinematic universe. Sergey and Larry actually encounter another one of our billionaires, a guy called Warren Buffett, who actually changed their minds on this idea of going public. So he explained that his company, Berkshire Hathaway, had a two-tier stock structure and he used that to retain control over his company.

25:06Yeah. So basically every share that Warren Buffett had, he had one vote for, which he would keep. Every share he sold to anyone else would have one ten thousandth of a vote. So even though he didn't own most of the company in financial terms, in terms of voting rights and control, he still retained control. And this is what Sergei and Larry did. But before they could go public, they needed a CEO because their investor said they needed a grown up in the room, you know, someone to reassure Wall Street. The other term sometimes they use for this is a grey beard. Just impose a bit of discipline because being a public company sometimes require a bit of discipline.

25:43Otherwise, these crazy founders can get themselves in hot water, as Elon Musk has found out over the years. So no more hot tubs in the garage. Or maybe the greybeard said that was OK. So they rejected several candidates to be the chief executive, the grown up in the room. Finally, they agreed on this tech veteran called Eric Schmidt. So Sergey became the president of technology. Larry became president of products. But to retain some control over Google, they also copied another classic Warren Buffett tactic. They set out their philosophy in a letter and it was called an owner's manual for Google shareholders.

26:16And this is absolutely key, this, because one of the things about going public is that you then have to issue quarterly earnings. You've got investors who are impatient and want to see you hit targets. And sometimes when you're building a business, you can't do that. You've got to take tough decisions. So it's one of the big issues that to this day dominates a lot of conversations, saying being privately owned means you can actually call the shots, take a longer term decisions. You don't have to satisfy an impatient Wall Street. And so they said as a private company, we've concentrated on the long term and this has served us well.

26:47As a public company, we will do the same. In our opinion, outside pressures too often tempt companies to sacrifice long term opportunities to meet quarterly market expectations. So we're going to be public, but we're going to act like we're private. We're going to do it our way. So in 2004, Google makes an initial public offering and raises over$1.9 billion, which means that the market value of the company skyrocketed to$23 billion. And this was an important moment for technology because just remember the dot-com crash had happened just a couple of years ago. So this was the tech lion roaring again.

27:23People said, oh, here's a company which is fast growing. There's investor appetite for it. The show is back on the road. Yep, the comeback kid of the tech boom. Yeah. In sheer financial terms, the IPO and the valuation of the company at 23 billion means that his stake is worth$3.8 billion. So at age 31, Sergey Brin is officially a billionaire. Oh, my God. There's something so horrible about seeing that age there when you're in your 30s. You're like, what have I done with my life?

27:55So at age 31, he's officially a billionaire. I think I'm going on holiday for the rest of my life at this point, but they're not done yet. And as we know, Google has got a long way to go. This is 20 years ago that he became a billionaire. So there's much more to this story yet. So as part of this commitment to long term thinking outlined in their philosophy, Sergey and Larry promised that he'll stay at Google for 20 years. So Sergey is now president of technology. And the 2000s is all about extending what Google can offer to the world. So, for instance, Google Images was launched in 2001 after Google noticed the demand in pictures after Jennifer Lopez wore that famously plunging green Versace dress to the Grammys.

28:35Yeah, and a bunch of other products came along in the Google stable. You had Gmail that launched in 2004, Google Maps, Google Earth, Google Docs, Google Spreadsheets. All of these things came thick and fast in the noughties. So these all became products that people interacted with on a daily basis. And to be honest, it's kind of hard to think of a time before any of them. And Google became basically a household name. Yeah. I mean, as a journalist, where would we be without Google? I have to say, I remember talking to some old journalist colleagues here who said in the old days, you used to have a cuttings library.

29:09And someone would literally cut things out of newspapers and put them with clothes pegs on clotheslines. And then you would say, can you bring me the cuttings on this story from five or ten years ago? and they would literally give you little yellowing bits of paper. Imagine trying to do our job without Google these days. I mean, when you described that, I genuinely felt like I was listening to someone from like the medieval past describing how monasteries used to work. That is comparatively not that long ago. But Google, of course, was so ubiquitous. In fact, it becomes a verb. In 2006, the Oxford English Dictionary added the verb to Google.

29:43Now, you might think that this is just a smooth trajectory, but not every single idea was a winner. So an early Google employee claimed that Sergei would often just throw out what sounds like random marketing ideas. They said he wanted to project our logo on the moon. He wanted to take the entire marketing budget and use it to help Chechnyan refugees. That's that anti-Soviet thing again there, rearing its head. He wanted to make Google branded condoms that we would give out at high schools. There were a lot of ideas floated. Most of them never became full fledged projects. If Larry and Sergey suggested something, you pretty much had to take it at face value for a while.

30:18But there may have been flops, but on the whole, enough ideas worked. And by 2005, Google crossed the milestone of being worth$100 billion. And then in 2006, Google made what is a huge move. It actually bought YouTube. It paid$1.65 billion in Google stock. And it actually beat out Microsoft, Yahoo and News Corp, Rupert Murdoch's company, proving itself to be the internet's dominant player. So it owns so much real estate on the web now. Yeah, you've got a lot of eyeballs a lot of the time. Sergey, meanwhile, is in his 30s. He's enjoying his billionaire lifestyle. In 2007, the Wall Street Journal actually found some great details about Google's new, quote, unusually large private jet, which is a Boeing 767, which usually carries about 180 people.

31:09It's three times heavier than your average executive private jet. And according to the plane's designer, they had some odd requests. They wanted hammocks hung from the ceiling. That's not good news. In turbulence, I'd like to see a video of that. No, I think perhaps this was vetoed, along with maybe, well, apparently Sergei demanded a California king-sized bed, which prompted the CEO, Eric Schmidt, to step in. So the greybeard tried to intervene when Sergei and Larry got into a fight over this bed. And he said, Sergei, you can have whatever bed you want in your room. Larry, you can have whatever kind of bed you want in your bedroom.

31:41Let's just move on. So dad's in the room telling the two kids to start arguing. Pipe down. But more seriously, Google's first executive chef called Sergei a playboy. And he alleged that Sergei was known for getting his fingers caught in the cookie jar with employees that work for the company in the masseur's room. And he also said that HR had told him that Sergei's response to it was, why not? They're my employees. So these are excerpts which are published in Vanity Fair from an oral history book called Valley of Genius, the uncensored history of Silicon Valley. Now, important to state that a spokesperson for Google has declined to comment to Vanity Fair's request about these allegations.

32:20Yeah, so we'll just leave that there. For the last 10 years, he's been head of technology. Sergey then begins a new role heading up the secret of Google X. This was known as the moonshot factory. Now, if you don't know what a moonshot means, it's basically something where you just aim for the moon. So these are big, wildly ambitious, forward thinking, futuristic stuff, self-driving cars, Google Glass, which was kind of a flop. these smart glasses. People made a lot of fun of them when they came out. It's like he thought of himself a bit like Tony Stark from Iron Man. But those dreams were dampened.

32:52In 2014, news leaked of an alleged extramarital affair with an employee on the Google Glass team. It actually led to a divorce from his wife, Anne, who was by now the mother of two kids. She's also the founder of the genomics company 23andMe. And it was even reported that it came between the two founders. Because Larry apparently stopped talking to Sergey for some time because of the affair and its fallout. But in 2015, Google announced a corporate restructure. And this led to the creation of this umbrella company called Alphabet Inc. Yeah. And this is interesting because I remember this covering this at the time.

33:26And the thinking was that Google has become so big that it was a sprawling, becoming a sprawling empire. And what they wanted to do was have an umbrella company and then keep a kind of entrepreneurial spirit within the different units. These little divisions can still keep some of that kind of hunger, ambition, innovation without becoming some sprawling big thing like IBM did in the 1980s or something. It's also interesting because it also resembles what happened with LVMH, right? One of our other billionaires, Bernard Arnault, keeps all these individual luxury brands operating as separate companies underneath the LVMH umbrella.

34:03But it's interesting. So at this point, they bring in a new chief executive, a guy called Sundar Pichai. Larry becomes chief executive of Alphabet and Sergei is made president. So in a way, the tectonic plates in the company are shifting a little bit here. You could argue whether they're becoming more powerful or less powerful. I would say they're becoming more kind of elder statesmen of this incredible thing that they've built. Right. They're kind of at the top of the chain, surveying everything, but probably don't know exactly what's going on at every single company. So then in 2019, 20 years after they started out, now both 46, Sergey and Larry announced they were stepping down from their roles and day-to-day management of Alphabet.

34:40They said they would assume, this is the way they put it, assume the role of proud parents offering advice and love, but not daily nagging. Crucially, however, they still retained 51 % of voting rights on Alphabet's board. So they could override that CEO if needed, although so far they've kind of stuck to their word, they've kept out of it. And them leaving didn't seem to harm the company's prospects any. In 2020, Alphabet became the fourth US company to be worth a trillion dollars behind Microsoft, Apple and Amazon. I don't even know how many zeros a trillion has. It is 12. Can I get back to you on that one?

35:15Yes. We'll Google it. So what's been happening since then? What's Sergei been up to since stepping back from the company he founded? So he remarried in 2018. They had a daughter. But in 2022, the Wall Street Journal alleged that his wife, Nicole Shanahan, had an affair with Elon Musk. Musk and a lawyer for Nicole denied the affair. Sergey remained silent. But Sergey and Nicole did then divorce. And post-divorce, he was seen partying, topless wear. Burning Man, of course. But he's now a centi-billionaire. So$100 billion. Interestingly, though, getting more money doesn't actually seem to be his number one priority.

35:54So he spends quite a lot of his time and money on what you could describe as passion projects. Yeah. He backed a company which was developing 400-foot Zeppelins, airships, if you like, which would be zero emission. And apparently he's already sunk$250 million into that so far, which sounds like a lot of money, but a small change to someone like Sergei. One of his associates said Bryn follows things as far as he can possibly go to an ultimate conclusion. And that's not necessarily driven by business. It's a curiosity. So that's kind of it. He's kind of a dilettante, actually. Yeah. Well, I mean, you know, if you've got that much money, it's like being a kind of Victorian industrialist.

36:34Your factory in the north is making loads of money. In this case, that factory is Google and you are free to go off and pursue whatever you hell you like. And a lot of those Victorians went off to become amateur scientists. It feels like it's a bit the same. But he is still not totally done with Google because in 2023, Google invited Sergey and Larry back to help with their AI product strategy. because CEO Sundar Pishai had declared a code red following the release of ChatGPT, which is not owned by Google. Yeah, that is owned by something called OpenAI in which Microsoft has a big stake. And this is actually the battle that is being fought right now because ChatGPT, as many people will know, if you haven't used it, it's basically like a search engine but intelligent.

37:17You can ask it anything you want and it will give you, it will feel like a human being coming back to talk to you. Now, that is the one thing that could possibly loosen Google's total stranglehold on search. This is actually the first genuine threat in the last 20 years. And we'll be covering the boss of the company that makes ChatGPT, which is OpenAI. His name is Sam Altman later in the series. Interestingly, some people think that AI was the goal for Google from its very conception. So a founding editor at a technology magazine called Wired actually met them at the very beginning of Google's journey and said that the mission for Google was not to use AI to make their search better, but to use search to make an AI.

37:58And actually, we've got a clip of Larry from that same 2003 interview with the BBC where he talks about Google's desire for an AI-like search engine. So let's listen to that. The ultimate search engine, which is something we talk about, would understand everything in the world. It would understand exactly what you wanted and it would give you that thing. Google is pretty good, but it's nowhere near that good. It requires being smart, like a person is smart. and so if you had a search engine that could answer any question then it would be you know very very smart and so that's a hard thing but if you're able to do it would obviously be a very big deal.

38:32I think we have people at Google who work on doing that and you know they're reasonably excited about it and think it might happen in their sort of work life but they don't know that it will happen in that time. Wow that's quite prophetic isn't it that was in 2003 that's exactly where we are right now, 21 years later. So in the work life of the people he was talking about there. In fact, as we're recording this, Google has just launched an AI generated summarised search results that sort of sit above the normal links. And as Google are sort of selling this as doing the Googling for you. Now, unfortunately, it's not performed very well and has gone viral recently for delivering a lot of very bad answers, such as Google's AI search results have told people that you can put glue on pizza.

39:18Really? I hadn't caught that one. Hold the glue on mine. And commentators, I mean, basically, AI threatens or promises to be the next revolution of how the internet works. So there's a lot to play for here. Google has dominated over the last 20 years. I think it's worth also saying at this point that Google's not been without controversy. I want to go back to that thing that was in their mission statement, don't be evil. Because some people would say its dominance is such that it has squashed competition. And in fact, Google has been in court both in the US and in Europe and elsewhere for abusing its dominant market position.

39:54And it's been fined billions of dollars. And in fact, in May of this year, there were final arguments being heard in this massive case, United States versus Google, over whether Google broke federal antitrust laws, competition laws, to maintain its online search dominance. So the case alleges that Google, whose search engine now controls nearly 90 % of all online queries, paid billions to maintain this monopoly over the search market. Yeah, for example, agreements with other tech rivals or, for example, making sure that your smartphone is powered by Google. Google's defence is that they dominate because they are the best and competition is just, in their words, one click away.

40:33And the ruling is expected to come at the end of 2024. So stay tuned for that. And also its relationship with China is very interesting. For example, to do business in China, obviously the most populous country in the world at that time, Google agreed to comply with the Chinese government's censorship requirements, which would block websites extolling democracy. For example, any reference to the 1989 demonstrations in Tiananmen Square, that was blocked. And so they had to make an ethical sacrifice if they wanted to get into that market. And some people say that's a step too far. And, you know, like even within one single industry, like, for instance, journalism or digital journalism, there's a huge argument to be made that Google has actually sucked advertising away from traditional publishers through AdWords.

41:19So essentially, some people are even thinking that, you know, maybe Google is responsible for the kind of declining fortunes of independent journalism, because publishers can no longer make money from advertising in the same way because Google is sucking up all that revenue. Yeah, and a lot of people also blame them for the demise of local journalism, newspapers. One of the big things that local papers used to do was their classified advertising would often pay for a lot of that. That's kind of gone because you can search for dry cleaner near me. I mean, the internet generally and Google in particular have done that.

41:50I mean, I don't even want to think about how Google has affected the fortunes of the people who print map books. Yeah, I know. But I have to say that Google Maps has got to go down in my book as one of the most useful things I've invented. I wouldn't want to be a pizza delivery person in a pre-Google world. I mean, that's when you had to go to the pizza place and pick it up yourself. Yeah, exactly. So the issues about Google rumble on. Sergey, along with his friend Larry, Sergey created an incredibly useful monster. So while we're debating these things, it seems like a good moment to finally judge Sergey Brin.

42:23Is he good, bad or just another billionaire? We're going to score each of these categories out of 10. First category, wealth. So he's currently worth$135 billion. That's around number seven or eighth in the world today. So he's very, very rich. And funnily enough, he's just behind Larry. I don't know how that happened. Maybe it's because he spent all his money on 400-foot airships. Yeah, the California king beds kind of rack up the cost. And Burning Man's not cheap, you know, so he's probably spent a little money there. So, I mean, in wealth, he's top 10. He's in the Premier League, right? Got to give him a nine, I think.

43:00Yeah, I think a nine out of 10, pretty much. I mean, we've had some centibillionaires on the show, but not many. Larry and Sergei are definitely up there. OK. Rags to riches is how far have they come in their journey to being a multibillionaire? So when his family arrived in the US, they said they'd never seen so much meat in the supermarkets. Remember, they came from the former Soviet Union. I think this is a really good rags to riches story, actually. He didn't grow up literally dirt poor like Oprah. But coming from the restrictions of the Soviet Union to America, you know, it really is a coming to America story, isn't it?

43:34It is a coming to America story. But bear in mind, they came bearing great intellectual and educational gifts. It's not like they started from the bottom in the office room. They were, you know, math geniuses. So they've got a culture of high achievement. And obviously that was able to thrive more in the US than it was in the Soviet Union. Nevertheless, to go from former Soviet Union not knowing much English to being one of the top ten richest people on the planet, I'm going to give him an eight. Yeah, I'm going to give him an eight because it is a great story. You can imagine young Sergei in his first Walmart staring at all the meat on display.

44:09I mean, it's a great image. Villainy is another category. What have they done to people along the way? Have they done people over? Have they made some ruthless moves? Have they, in short, managed to fulfil their motto, don't be evil? I mean, other than those allegations around workplace relationships, strangely, I think Sergei has not really fallen out with very many people. You know, even when he fell out with Larry after that alleged extramarital affair, they clearly still work together and still like each other. Yeah, I think this is a more nuanced one in a way because they knew that their advertising model would prioritise the needs of advertisers over the needs of users.

44:53But they had to make some money. So they did that. So that if you could argue that's compromise number one. And then going to China agreeing to effectively censor. Yeah, they agreed to be censored in order to get to that market. And there is no doubt that Google's dominance has squashed competition in other places. So I think this is not black and white, this one. I think there's some grey areas. On the other hand, they've invented one of the most useful things on the planet, which we all use on a daily basis. If it wasn't so good, it wouldn't be so dominant. So I'm going to give them a five on this one.

45:28Just straight down the middle. Straight down the middle. Yeah. I mean, it's funny, right? Because if Sergey and Larry had not invented Google, would someone else have invented it? Would some whiz at AltaVista or Ask G's or Yahoo have come up with their version of Google? I think for me, Villainy, yeah, I'm going to agree with you. I just want to go straight down the middle, five out of ten. You can't agree on everything. Yeah, OK, well, let's look at the next one, because this is interesting. Philanthropy. How much has Sergey contributed back to the world? Now, the Sergey Brin Family Foundation supports his favourite causes.

46:01This also includes a non-profit dedicated to colonising the moon. So talk about favourite causes. Those billionaires, man, honestly, those billionaires. What is it with their moon and Mars and spaceships and what have you? In terms of amounts, let's look at the numbers. In 2021, he made$240 million worth of charitable payments, considerably more than his old friend Larry. He's also donated hundreds of millions to the Michael J. Fox Foundation, which researches Parkinson's disease. His mother was diagnosed with it. So the numbers look big, but Forbes estimate he's actually only given away between one to five percent of his wealth.

46:37That's not a lot. It's not a lot. For me, he scores really badly on this. You think so? If it is five percent, five percent of 100 billion is five billion. I mean, that's a lot of money. Yeah. But then, you know, like compared to the overall amount of money that he has. And also the fact that some of these charities are to literally colonise the moon. I'm sorry, but we've got problems on Earth as it is already. You know, don't spend money colonising the moon. OK, sounds like you're lowballing this one. I'm lowballing it. I'm giving it a one out of ten. One? Yeah, I mean... Man gives away five billion dollars and you give him a one.

47:08I'm going to give him a two, so we're going to disagree. We'll disagree on that. Power. Boy, I mean, the Google algorithm, I would say, is one of the most powerful things in the world. Oh, yeah, definitely. This one scores for me really highly. I would maybe give it even a 10. A 10. We have a 10 in the house. Well, when you think about it, if Sergey emailed whoever is in charge of making the Google algorithm tweaks and said, hey, I want you to make this person disappear from the internet, that could be done. That could actually honestly be done. And that's an enormous amount of power for one person to have.

47:44That is huge. You're right. I hadn't thought of it in those terms. I would say that their power over Google, at the height of their powers when they were in charge, and they still earn 51%, they would have easily as much power as a Rupert Murdoch. And I think we gave Rupert Murdoch 10. Yes. So they're right up there. It's a 10. A 10 for power. One of the very rare 10s that we've had on the show. Yeah. Now, what about legacy? When Sergey Brin goes off to the moon and we never see him again, what is his legacy going to be? I think that we will never, ever approach information in the same way ever again.

48:20And I think it's Sergei's father who said Google has saved more time for more people than anything else in the world. I can't disagree with that. I almost feel like that's lowballing it because he makes it sound like a microwave or a dishwasher. I think what Google has done is effectively be the next Gutenberg, basically. You know, the guy who invented modern printing and revolutionized everything. I think that's what Google has done for this world. And the fact that a Google-powered search engine is on my phone, through this thing in my pocket, I can basically tap into all human knowledge ever generated on the planet.

48:56So I think in Legacy, I'm going to have to give them another 10. I think it's going to be another 10. I can't think of another product that we've discussed on the show. Apart from the internet itself. Yes, which was a joint effort, really. Yeah, yeah. But this is the way that you put a saddle on the internet and sort of ride it wherever you want to go, isn't it? This is the interface with it. And given the fact that Google was founded by two Stanford students in a dorm room, that is an incredible journey. Yeah. Finally, good, bad or just phenomenally rich? Oh, I mean, Google is so useful. Like we've discussed, it's changed everything.

49:34That would not have existed without Sergey. And it wouldn't have existed without Larry. To give Larry his due. It messes stuff up, it's true. And it's made a lot of decisions that have impacted a lot of different industries, arguably for the worse. Yeah. But then innovation always does that. You know, the railroad gets rid of the horses. The printing press got rid of illuminated manuscripts. Exactly. You know, new industries come up and kill off old ones. That's the way of the world. So I'm going to say, oh, I'm not going to say either. I'm going to say he's just another billionaire because there's some bad and some good in there.

50:07And it is inevitable function of the way they've changed the world. They will become fantastically rich. So I'm going to say just another billionaire. Oh, I'm going to disagree with you because I just think what Google has done is incredible. I mean, putting aside all the kind of controversies and the way that it has, you know, arguably in some cases destroyed entire industries, including maybe the industry that we work in journalism. What it has done is completely changed the way people access information. You know, you could be if you have a smartphone and the Internet and you live in the middle of nowhere and you've got reception, you have basically access to all of human knowledge.

50:44sometimes they mess up the rankings sometimes it's in hock to advertisers, sure but the very fact that they've managed to do that is astonishing and I think for that reason it's got to be good for me, he's a good billionaire You've changed my mind I've mounted the correct argument You have, I think life is just a lot easier richer, more complex there's no excuse for living in ignorance anymore, right? And that's got to be a good thing I'm going to go with you, I'm going to change my mind Well done Sergei, you're a good billionaire

51:18so who've we got next week we've got the first lady of fashion herself the devil wears it it's the prada founder herself mutia prada now this is going to be a tricky one for me i know less about fashion than anyone else in the world well lucky for you i am obsessed with fashion so the best podcaster i've ever seen so she must be one of the first billionaires actually maybe the only billionaire will ever cover who at one point wanted to be in mine. Join us for the next episode where we talk about Mucha Prada.

52:09media, it helps us to keep telling you these incredible stories.

52:24America is changing. And so is the world. But what's happening in America isn't just a cause of global upheaval. It's also a symptom of disruption that's happening everywhere. I'm Asma Khalid in Washington, D.C. I'm Tristan Redman in London, and this is The Global Story. Every weekday, we'll bring you a story from this intersection, where the world and America meet. Listen on BBC.com or wherever you get your podcasts.