I'm Feeling Lucky_ The Confessions of Google Employee Number 59 - Douglas Edwards [162]
Alan was the sales guy. He was born optimistic. He looked at the numbers and saw a baseline. Google and Earthlink didn't have AOL's traffic or reach and their websites were not oriented toward consumer purchasing. People on AOL bought stuff. "I argued that as long as the advertisers were making money, they would create more ads," he told me.
As Susan and Salar saw it, that might be true theoretically, but in reality there were constraints that would prohibit meteoric growth. They plugged smaller numbers into their forecast assumptions. Salar was the most pessimistic; Susan was in the middle.
"I'm sure these are the three best models we could have," Eric said after they presented their scenarios. "And there's no way for me to know who's right. I'm not going to dig into the individual numbers, because I can't add any value there. So we're just going to take the middle one." It was a quick decision and strategically sound, but a gamble nonetheless.
AOL, meanwhile, nibbled around the edges, dragging out talks so that the cost of losing the deal would increase. "Oh, we just caught this and we need to change the language," Alan's counterpart would tell him, referring to wording that had been settled a dozen drafts earlier. Alan knew how to deal with middle managers trying to score points at the last minute to impress their bosses.
"Fine," he replied. "If you care that much about it, you call Dave Colburn tonight and have him call Eric Schmidt." Alan knew no one wanted to disturb Colburn for something insignificant and be lambasted as an idiot. Suddenly the language was no longer an issue.
As negotiations dragged on, Overture continued to jab at Google. The patent lawsuit was followed by a deal with Hewlett-Packard that made Overture the default "search the Internet" link on new HP Pavilion computers. If HP thought Overture was good enough for Internet search, who needed Google? And Overture pushed Yahoo to renew their short-term advertising contract for a longer period. Omid had lost out to Overture with Yahoo once before. Now he burned to bring that business to Google. He would excuse himself from the negotiating table at AOL to entreat Yahoo on his cell phone to switch to Google's AdWords Select product. The Yahoo contract with Overture would expire in June, so he knew time was short.
On April 24, 2002, Overture issued a press update on AOL. The existing agreement, which had been set to expire, was being extended through May 1, 2002.
The next day, Overture announced they had renewed their deal with Yahoo. Two months early. The term was not the five months of the original agreement, but three years. It was a stunning surprise, and it rocked our world. Rumor had it that Overture had taken Yahoo's execs golfing and, over the course of eighteen holes, scored a major victory. Larry and Sergey had been blindsided by Yahoo again. They took it well, considering. No one died that day.
Overture's Yahoo deal sent Wall Street's analysts into paroxysms of euphoria. Safa Rashtchy nailed the Google coffin shut. Investors had been waiting for the AOL deal and instead got the much more important Yahoo deal! Google clearly had no game. AOL was certain to sign with Overture now.
As May 1 approached, there was some nervous speculation about why AOL had not yet issued an announcement of a deal with Overture. "AOL must be raking Overture over the coals," read one online post.
On April 30, Omid's phone rang. It was Safa Rashtchy. Overture, he said, had announced they were not renewing their AOL contract. Did that mean Google had won it?
"Let me call you back," Omid replied. The deal still wasn't final.
Finally, Omid's fax started humming. Seventy pages chunked out, one text-heavy