I'm Feeling Lucky_ The Confessions of Google Employee Number 59 - Douglas Edwards [159]
AOL came on strong. The four staffers from Google, dressed in business-casual attire, were met by a dozen negotiators, product managers, and lawyers in expensive suits—a staffing ratio that AOL maintained throughout the negotiation. "They would always have this random cast of characters coming in and out," recalls Alan. "They'd have these people sitting in and we had no clear idea of what they were doing there."
Overwhelming presence was just one of many negotiating tactics. AOL also created artificial urgency, requiring the Google team to jet cross-country to address an issue that then dragged out over a week. The Googlers huddled in hotels, nursing their colds, while AOL's team went home to their families. If Google's negotiators were physically exhausted, they might cede key points, just to get some rest.
The tactic didn't work. "We've had enough," Alan finally announced to his AOL counterparts. "We're going back. We'll just do this over the phone."
"Great," they responded. "Go back home. You guys rest up over the weekend and just come back Monday."
Alan wasn't about to play that game. "Forget it," he said. "We're going home to rest up and we're inviting you guys out to California on Monday. You guys are much stronger and more able than we are, so you guys should come out to California. You guys are just supermen and we're not. I admit it. I'm a wimp."
AOL didn't fall for that. "Give it a rest," they told Alan. "We'll do it by conference call."
The deal would go nowhere, though, if we couldn't back up our claims about potential ad revenue with real data. While we had proven the value of our search technology with the Yahoo deal, Overture would make the most of our lack of a track record with syndicated ads, sowing FUD (fear, uncertainty, and doubt) about Google in the minds of AOL's execs. Overture was a known quantity and a reliable partner, and knew AOL would never agree to be our guinea pig. For a publicly traded company, the risk was way too high.
The only solution for Google was to sign a syndication partner ahead of AOL. Alan wanted someone who was already a good search partner and friendly toward us. Someone he could sign quickly. That was the real significance of the deal he negotiated with Earthlink in January 2002. Earthlink was our proving ground for AOL.
The Earthlink partnership was the ante that bought Google a seat at AOL's table. Now the real game began. There were no rules. David Colburn was an infamously intense negotiator sometimes called "the Butcher" for demanding—and getting—a pound of flesh from potential partners.* According to Alan, Colburn and the rest of AOL's team were the toughest negotiators he ran into during his time at Google. Their basic technique was to keep asking for more until the other team screamed uncle.
Colburn, Alan said, "would keep changing deal terms that had already been decided. We'd agree on certain things and then he'd just change them randomly—the prepay, the revenue split." These were key components of the deal, as was the amount Google guaranteed to deliver to AOL regardless of how the ads performed.
If we agreed to too large a guarantee, it could bankrupt us. The Google team knew the number would have to be big, because Overture was already providing AOL with a significant revenue stream. If Overture was delivering ten million dollars a year, AOL would build on that. They would argue they were growing at fifty percent a year, so the number Google needed to guarantee was actually fifteen million dollars. We would respond that there was a limit to how much Overture's flawed system could deliver,