Information Technology Reference
In-Depth Information
store hit a day's high of 30 before settling down to close at 23-1/2. That was more than
30 percent higher than the $18 target price set by underwriters just the night before. Even
that pre-IPO price had been raised twice before the market opened. Initially, it had been
set for a $12-to-$14 range, then got bumped up to $14 to $16 before the company's invest-
ment bankers settled on the $18 price. The IPO raised $54 million for Amazon, giving the
company a market value of $438 million. The online bookstore put 3 million shares on the
block."
Today Amazon has further bolstered its business with the sale of eBooks and the popu-
lar Kindle eReader. Perhaps more importantly, it has also branched out into the high-growth
area of providing cloud computing services via the Web for businesses large and small.
Amazon has in fact become the market-leader in this space, where it competes head-to-
head with such players as Google, VMware, Microsoft, Rackspace, Slaesforce.com, Joy-
ent, IBM, NetSuite, and Tera.
Amazon enjoyed net sales of $34.20 billion in 2010, a 39.5% increase from $24.51 bil-
lion the previous year. And growth continues.
The elephant in the room of Internet commerce, however, is Google, begun as a search
engine research project in 1996 by Larry Page and Sergey Brin, two PhD candidates at
Stanford. Key to the new engine was a new search algorithm ("PageRank" technology) de-
veloped by the two to analyze relationships between websites - generating results determ-
ined by the number of pages, and the importance of those pages, that linked back to the
original site. (Page and Brin at first referred to their new search engine as "BackRub," be-
cause of its checking of backlinks to gage the relevance of a particular web site. A similar
strategy - "RankDex" - was explored at about this same time by Robin Li of IDD Informa-
tion Services. Li subsequently used RankDex in founding the search site Baidu, in China.)
Eventually, Page and Brin changed the name of their enterprise to
Google
- derived
from a chance misspelling of "googol" (the number "one" followed by one hundred zeros),
this having been chosen because the word suggested a platform that would provide a nearly
infinite quantity of categorized, high-quality information, thus maximizing the utility and
value of that information. The two technologists turned entrepreneurs registered the
Google
domain name in September of 1997, but did not incorporate until September 1998. Since
then, growth has been explosive, stemming from both in-house innovation and aggressive
acquisitions. (In May of 2011, Google's unique visitors surpassed the 1 billion mark for the
first time, an 8.4 percent increase from one year earlier and a
very
important fact since 99%
of the Google's revenues are derived from advertising via the firm's AdSense program and
other products.)
Google received its first venture funding in August of 1998 - $100,000 from Sun Mi-
crosystems co-founder Andy Bechtolsheim. June of 1999 saw a second round of funding -
$25 million from such venture firms Kleiner Perkins Caufield & Byers and Sequoia Capit-
al. The IPO took place in August of 2004 - 19,605,052 shares (out of 272 million) offered
