Review of “In the Plex: How Google Thinks, Works, and Shapes Our Lives,” by Steven Levy

In the Plex is the most timely business book I ever read.

In the Plex begins, and ends, in India. India is the symbol of the new world, of business opportunity, and of hope, so the Steven Levy begins In the Plex with a “blazing hot July day in 2007, in the rural Indian village of Ragihalli, located thirty miles outside Bangalore.” Twenty-two feature Google leaders met with the locals, looking for new opportunities, and expanding their view of the world.

It half worked. Most of those 22 are no longer with Google. In the Plex chronicles the rise and stagnation of Google: the founder of Blogger left… to found Twitter. The founders of Dodgeball left… to found Foursquare. Many ex-Googlers now work for Facebook. And one of the final scenes in India, reported second-hand, is this short sentence: “I’ve sen beggar kids who use their money to get on Orkut.”

Orkut is one of (four) distinct social-media failures by Google: the others being Knol, Google Wave, and Google Buzz. The story of In the Plex is the story of how Google could rise to dominance in the search engine status, while defenselessly watching as the social media space eclipsed its original business.

Indeed, the story of Orkut is the story of Google in miniature.

Orkut was an internal Google project headed by Turkish software developer Orkut Büyükkökten to build a social media site. As Levy writes:

Was it a sign of the company’s distrust of the insufficiently algorithmic nature of social software that the product was not branded with the Google name? “We wanted to see if it could stand on its own two feet,” says Melissa Mayer [a Google manager who led the trip to India that began the book] a stricture not required from such Google services as Gmail and Google Maps.

Orkut not only suffered from not being a “Google” product — it was allowed to run slower than other Google services, and few engineers were assigned to the project. Even a Facebook continued its exponential climb, Orkut was allowed to flounder, only finding success in Brazil and… India.

Just as Google once sought out India, once sought out the new, by the end of In the Plex Google simply allowed the new to happen to it.

There are perhaps two reasons for Google’s slumber. One is its bizarre management structure. For a while Google simply abolished the management profession entirely, flattening the entire company to three levels (individual contributors, heads of departments, and the triumvirate of Sergey Brin, Larry Page, and Eric Schmidt). Even after this cultural revolution was undone, the company was led by the uniquely unhappy triumvirate.

Schmidt reminds me of no one so much as a Chinese official under Mao, an individual whose bizarre praises of the leader are obvious clues to anyone sensible that Schmidt is completely disclaiming responsibility from the company’s increasing erratic moves.

“Larry is the brilliant inventor, the Edison. Every day I am thankful I accepted this job offer.”
“Genius? I think so.” [referring to Larry Page]
“This was very clever on Larry and Sergey’s part” [referring to Google poaching Firefox engineers to work on Chrome]

Mixed in with “personal views” which directly contradicted Google policy

“My personal view is that private information that is really private, you should be able to delete from history.”
“Google has five thousand years of patience in China.”
“I didn’t want to moon the giant [Microsoft].”

Schmidt of course was fired by Larry and Sergei, and soon after his dismissal Schmidt’s deputy, Jonathan Rosenberg, quit in protest. It is shocking how disrespectful Rosenberg was in the book, as during the writing he still worked in the company.

At one point in his canned presentation, Rosenberg stared at the spreadsheet calculation in his PowerPoint deck and corrected a subtle mathematical error. Everyone was blown away. (In fact, Rosenberg knowing that Sergey Brin was supposed to be some sort of math Olympian had planted the mistake and faked his spontaneous discovery.)

and

But [Rosenberg’s] first year was awful. Larry Page would sit in meetings and second-guess every move Rosenberg made. “I would come to the staff meeting with my structured agenda, the market research we needed to do, the one- and two-year roadmaps that we needed to develop, and Larry would basically mock them and me,” Rosenberg later said.

Jonathan’s calculation must have been that Larry would be marginalized, so publicly mocking the co-founder would simply distance himself from Larry’s and Sergey’s decisions. What Eric tried to do through praise and personal off-sides, Rosenberg did through mockery and complaints.

Other incidences — for instance, Larry requiring CEO Schmidt to share an office with another employee — are littered through the book, but “What is wrong with Google” has another answer besides “Facebook” and “Chaos.”

Arrogance is how the mighty fall.

None of us are as right as we think we are.

We are learning machines. We make mistakes, and others zoom ahead. We are at our best when we criticize our faults to ourselves and praise our competitors.

Such a view of the world leads directly to oligopoly in most human endeavors. Monopolies naturally form in a capitalist system, and in the computer industry several are worth mentioning

• Amazon is the world’s bookstore
• Apple is the world’s luxury computer company
• Facebook is the world’s gathering place
• Microsoft is the world’s supplier of operating system

It is not illegal to be a monopoly, but it is illegal to buy one’s way to monopoly status or to abuse one’s monopoly powers. With this in mind, the corporate behavior of Amazon, Apple, Facebook, and Microsoft makes a lot of sense.

• Amazon has not used its giant database to take on Facebook, nor has it attempted to purchase Barnes & Noble
• Apple has not used its technical expertise to try to displace Microsoft’s share of the low-cost computer market, nor has it attempted to buy Microsoft’s operating system division (which it has the market cap to do)
• Facebook has not used its powerful brand to try to own the luxury music player market, nor has it attempted ot purchase MySpace.
• Microsoft, since the departure of Gates, now links to Amazon, Apple, and Facebook properties through its Bing search engine, and has not attempted to buy a new monopoly since its failed takeover of Intuit in the 1990s.

By contrast, Google has been unfocused, challenging other incumbents everywhere. Steve Jobs famously asked, “Apple didn’t enter the search business — so why did Google get into the phone business?” ChromeOS and Google Apps directly challenge Microsoft’s Office and Windows divisions. Google Print directly attacks Amazon’s role as the world’s bookseller. And just now, Google +1 takes on Facebook… again.

This is not to say that competition is not good for consumers. It is good. But as Jim Collins wrote in How the Mighty Fall, arrogance is even worse for organizations.

–

Centuries ago explorers tried to reach India. For a few brief years, Google seemed at home in that new world. But there are obstacles on the road, and if Google will rise again the nature of these obstacles should be addressed.

One relates to China.

Can you guess what search pattern generated results like these:

• Apple soars in China as other US retailers faulter
• Facebook Reaches Deal for China Site With Baidu, Sohu Reports
• How Microsoft conquered China
• Inside Google’s China Misfortune

The answer, of course, is a search for the company’s name and “China.” Google alone failed to compete in the country, and worryingly this decision to support civilizations apartheid was led by Sergey Brin (who threatened to leave Google if Google would not leave China).

Just as Google (like Microsoft of the 1990s) sees itself above American law — the Securities and Exchange Commission and the Department of Justice are just two standing bureaucracies that repeatedly object to Google’s behavior — it sees itself above the Chinese marketplace as well.

Sergey Brin, it should be remembered, came to this country only because of the intercourse of ideas – Sergey’s father, a scientist in the Soviet Union, encountered westerners for the first time in at a conference at Warsaw, and soon after applied to leave Communist Russia. Yet instead of treating China as a business opportunity, instead of seeing the Party as something to be managed, instead of lightening the way for Chinese “Brins,” Google flamed out, embarrassing its friends in the government and hurting its employees.

A final, and sad, coda, is the end of idealism at Google. During their IPO, Google warned investors that the company would spend 1% of revenue and 1% of equity each year on charity. After walking back from this, Google now includes in its “charitable” lobbying politicians and investing in companies aligned with its business.

The former Microsoft CEO was particularly harsh:

Bill gates said that [Google]DotOrg “is the most publicized foundation in the world, and it’s tiny. Expertise and analysis is this much of what is needed.” He made a gesture with his thumb and index finger a half-inch apart to indicate how insignificant the amount was. “You make an impact with money,” he continued, referring to DotOrg’s outlays, in tens of millions compared to his own foundation’s billions. “Your analysis won’t help sick people or save people’s lives! You do that with monnnn-ey.”

In the Plex is a fantastic book about the search engine giant, its history, its management, and its future. I bought it on Tuesday and finished it on Thursday. Highly recommended!