Google's secret sauce is Larry Page

The next Steve Jobs was here all along, and Google's latest blowout earnings are the proof.

By Staff Oct 18, 2013 2:50PM

Google CEO Larry Page speaks at a news conference at the Google offices in New York in 2011 © Seth Wenig/ logo

By Dana Blankenhorn


NEW YORK (TheStreet) -- When I have written about Google (GOOG) in the past, I have often called its infrastructure its secret sauce.

Google's blow-out earnings, however, may have more to do with something other than its low-cost, global cloud.

Maybe this Larry Page fellow knows something. Maybe Larry Page is Google's secret sauce.

Page founded Google much as Steve Jobs founded Apple. But, unlike Jobs, Page never left. Instead, he did a CEO apprenticeship on the job, for nearly a decade, under Eric Schmidt. When he became CEO, at the start of 2011, he was already seasoned, and his hair was already going silver.

Since becoming CEO, Page has dramatically narrowed the focus of the company. As one Quora user put it, there's more wood behind fewer arrows.

The whole company is more professional and more focused. Major functions are concentrated on its Mountain View, Calif., headquarters, and there are fewer of them. The days of wild experimentation are over.

Page has focused on mobile, on social, and on the company's search algorithms, all in an effort to transform ads from annoyances to real service. It's working. Over the last year Google's cost per click, its base ad rate, fell 8 percent while the number of clicks was up 26 percent.

This means Google is, increasingly, your best advertising bargain. Competitors - whether they're in TV, or in any other medium, face a company that is delivering more customers for less money, and an advertising model based on results rather than eyeballs.

This is an important inflection point. Ever since the Web was spun, companies have been promising that intrinsic advertising, ads pushed based on who is using the site, would become more effective than extrinsic advertising, ads pushed based on the content next to it.

Google seems to have cracked that code, and this quarter brought revenues of $14.9 billion, with a full 20 percent of that money, $2.97 billion, hitting the net income line.

Put it this way. The Interactive Advertising Bureau estimated that in 2011 U.S. Internet advertising was a $31.7 billion market. Google will easily double that this year, all by itself.

The star of the ad show is now YouTube, and 41 percent of its traffic is now from mobile devices. This is also an important inflection point. We're accustomed to TV and Internet being competitors. Now, increasingly, the Internet is TV, and Google is leading the way in monetizing it.

Everything Page's Google does is aimed at collecting the data needed to drive the extrinsic ad train. The Chrome browser collects data. The Google Plus social network collects data. The Android mobile operating system collects data. And Google uses this data to deliver search results that make its ad rates look cheaper than any other source.

Ever since Google was founded, Page has focused on search. It didn't become a "portal," as Wall Street insisted Yahoo become. Page looked at all the factors that would enable search to find something, starting with infrastructure, and put the company's money into it.

Now he has transformed the world we live in, replaced the media reality with his own, and he's still just 40 years old.

Everyone keeps looking for the next Steve Jobs, the next great founder with a vision that can transform the world. He's here. His name is Larry Page. And business is going to have to deal with him for a very long time to come.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage. At the time of publication the author owned 20 shares of GOOG.

More from TheStreet

Oct 18, 2013 4:20PM
Steve Jobs wasn't Steve Jobs. At least not the Genius portrayed by Main Stream Media. Steve's genius was in his ability to spot the Genius in others. Then he bought it out on the cheap. The rest of the Time, Steve was a glorified slave driver. So let's not hope that Larry Page is just another Steve Jobs. Let's hope he's far better. From what I have seen from Google, I would believe he's nothing like Steve. That's a good thing.

It's appears that the Work Environment at Google is at opposite odds to the Work Environment at Apple. That's another good thing. Workers shouldn't have to walk around in FEAR. Apple is benefiting from a Cult following. Google is benefiting from an almost Monopoly position. For someone else to scale to the point where Google is would take a tremendous amount of CASH and time. That's keeps them in the Catbird Seat. That being stated, their main product is Far from perfect. That shows folks, you don't have to be perfect to make a Boatload of Money.

Oct 18, 2013 9:22PM
Yeah google. whoopity doo. I don't use it. Billions of dollars in adds that nobody's watching. What do they have that I can't get elsewhere? There are plenty of search engines. If they vanished tomorrow, I wouldn't miss it. Does anyone really believe they are worth $1000 times however many millions of shares are out there... for a website? No way. I don't see a real product.
Oct 19, 2013 7:42AM
Kind of crazy, isn't it? Google is a virtual platform, not an enterprise. It makes profit from ads, not from tangible business. I know people who work for Google. If they didn't, they would be unemployed like so many other younger Americans without skill sets and addictions to button-pressing. The fact that the stock crossed $1,000 per share without substance isn't surprising... nothing going well today has any commonsense roots or ability to sustain. We get a choice-- virtual stupidity driving us to extinction or balanced Society with sustainability and employment.
Oct 19, 2013 7:40PM
ill tell you one thing Internet Explorer is a better security wise than chrome and faster
Oct 19, 2013 7:46PM
Ill tell you one IE 11 is more secure than Chrome or firefox and faster
Oct 19, 2013 7:41PM
IE 11 is far better than chrome and firefox
Oct 19, 2013 5:08PM
I for one that a program named adblock plus made to block these ads you don't need ads on  youtube that is stupid just to watch a trailer
Oct 19, 2013 4:48PM
but there is no need to run ads on a free internet
Oct 18, 2013 9:31PM

Google talks of how good they treat employees so how can they have whiting turner as a general contractor to build the new data centers. They treat the workers like slaves,by using fear and intimidation. I don't think Mr.Page would would like what he sees when the dog and pony show that's put on for him or his staff.Did I mention the unsanitary conditions for simple port a johns. 


Oct 19, 2013 12:03AM
 When the morons figure out Google does nothing but spy and sell your information the worthless nerd creation will be history. For instance will become a search page of choice because they are not spying scum bags.
Oct 19, 2013 1:59AM
Thank you Larry, us loyal stockholders have always had faith in you contrary to some articles posted on the internet.
Have owned your stock since it was $129 @ sh and look forward to it climbing even higher than the 1K mark.

Oct 18, 2013 10:44PM
the problem with all these stocks inflated by Obama is that u cannot trust the beautiful things from their results.for example how much of the sales is increase of government spending on ads .Obama helps companies of their financial supporters and google is one,i don't care but will never buy these stock prefer to buy stocks im sure been honest  and reliable for 30 years minimum.also Obama owns the Sec if these companies cook the books Obama with stay silence and nobody will know
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