An Irish woman's social, political and domestic commentary
Monday, August 23, 2004  


Not sure what to make of the IPO story. As story after story appeared in the press casting doubt upon the wisdom of the dutch auction, I paid them little or no heed. The VC's had been very mean to the boys in the early days and now the founders, in control of one of the most eagerly anticipated IPO's in years, were having their revenge. Throw it open to masses and screw the VC's. But the money men weren't going to roll over too easy. As well as clearly spinning Google negatively to the press, they refused to co-operate with the auction. Merrill Lynch simply pulled out and as they have the largest retail network that clearly effected interest. With the papers full of negative stories, others were cautious. Finally, their own VC's Kleiner Perkins Caufield & Byers and Sequioa Capital simply pulled out of the IPO claiming they felt that Larry and Sergei had made such a balls of the auction that they could get a better price for their shares on the open market. Of course, by withdrawing the millions of shares that they owned from the IPO, their prophecy was immediately self-fullfilling and contrary to Google's hopes, the shares went from $85 to $100 on opening day, thus allowing buyers to flip the shares on day one and make a big profit and at the same time confounding all the negative spin.

This NYT article has some of the juicy detail. But it can't help quoting mystery investors like this:

"To at least some, the company is finally being priced at a value that more accurately reflects its true value. "The real story of what happened here is the deal is finally being priced where the bankers would have put it had they been in charge of this deal from the beginning," said one investment banker, who owns a small slice of Google through his stake in one of the venture capital funds that was an early Google investor.".

When actually this is BS since the $85 didn't reflect the true value - $100 was the true value - the price the Kleiner wanted, predicted it would get, and then did get on the day.

So big deal, the guys tried to get one over on the establishment: it didn't work but they're still disgustingly rich and even if they destroy the company now, it won't make much difference. Finally I could not see what the big fuss about the Playboy article was since it seemed totally harmless to me.
I was happy with my dismissive analysis until I read Karlin Lillington's highly critical piece in the IT on Friday in which she references a previous very well researched article. (sub reqd)

I'll reprint some here due to the bloody subs: From the May article

"But as the Los Angeles Times pointed out, people still don't know some pretty basic things about the company, like how many people use its search engine daily, how many searches it performs, how much server power this requires, and how it performs them.

Oh, sure, the company regularly has stated some figures around some of these areas. But a fascinating article tucked away recently in the MIT Technology Review suggests that the company either can't do its mathematical sums, or is telling a few porkies. The article reports a presentation given by Dr Martin Farach-Colton, professor of computer science at Rutgers University in the US. During the talk, he shows a slide with some of the figures that Google does release:

150 million queries/day, 1,000 queries/sec (peak), 10,000+ servers, More than four tera-ops/sec at daily peak, Index: 3 billion Web pages, 4 billion total documents,
4+ petabytes disk storage.

As Mr Simson Garfinkel, the article's author, states: "Let's see: 'Four tera-ops/sec' means 4,000 billion operations per second; a top-of-the-line server can do perhaps two billion operations per second, so that translates to perhaps 2,000 servers - not 10,000. Four petabytes is 4x1015 bytes of storage; spread that over 10,000 servers and you'd have 400 gigabytes per server, which again seems wrong, since Farach-Colton had previously said that Google puts two 80-gigabyte hard drives into each server.

"And then there is that issue of 150 million queries per day. If the system is handling a peak load of 1,000 queries per second, that translates to a peak rate of 86.4 million queries per day - or perhaps 40 million queries per day if you assume that the system spends only half its time at peak capacity. No matter how you crank the math, Google's statistics are not self-consistent."

....But why? Garfinkel argues that it is to Google's benefit to hide such details that would enable other search contenders to try and benchmark themselves against Google's achievements. And it means the company always seems to perform at astonishing levels of efficiency and speed given the hardware. My, what algorithms they must have!"

and from Friday on the Playboy interview
"In the interview, the founders state that Google has about 1,000 employees. The correction, however, notes the figure is actually now 2,292 employees. Where did almost 1,300 more employees come from, and how could they not know this key, basic figure?

The company also issued this bizarre statement: "The article states that more than 65 million people use our search engine each day. We believe that this number represents monthly, not daily, domestic visitors data as compiled by a third-party research organisation." Huh?

What do they mean, they "believe" this number represents monthly, not daily, figures? Surely they know? The difference is nearly two BILLION users in a monthly period."

Karlin's point is that as a private company they can tell whatever fibs they want, but once they're public they have to come clean. Hmmm. Not good or evil. Were they thwarted by evil or just immature to begin with?

posted by Sarah | 20:40 1 comments

As someone who works/has worked in the industry you should know where the inconsistincies come from: poor memory for numbers and statistics taken at different times and compared siimultaneously. We always imagine these tremendously efficient organisation spooling off performance figures without error on any given day but it just isn't the case - they have better things to do than memorise rote numbers that contiunually change when prompted in numerous interviews. Bad PR management maybe, but hey it happens. I wouldn't see any deliberate dissimulation or "evil". Mind you they need to be more careful now but I don't thin they were ever lying.
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