Google's Mayer: Staying Innovative In a Downturn

The mantra that's been flooding the Googleplex this year? 'Scarcity brings clarity,' explains Marissa Mayer, Google Vice-President

When Larry Page and Sergey Brin co-founded Google (GOOG) 10 years ago, few people imagined the kind of influence it would wield today—not just on the Internet, but increasingly in such established industries as media and software.

Since then, Google has come to dominate the most lucrative piece of online advertising: the text ads placed next to its search results. Armed by an expansive mission to "organize the world's information and make it universally accessible and useful," the company has used its rapidly growing profits to fund forays into online software applications and even radio and television advertising. No wonder Google shows up as one of the 10 names on BusinessWeek's list of the World's Most Influential Companies

At the same time, Google's influence is increasingly under scrutiny, even by its own advertisers, who worry that it has become too powerful. In October, Google dropped a deal to run search ads on some Yahoo! pages (YHOO) after the Justice Dept. threatened to file an antitrust lawsuit. In a recent interview with Silicon Valley bureau chief Robert Hof, Marissa Mayer, vice-president of search products and user experience, talked about the challenges to Google's power from the government and from the declining economy, and shared some little-known tales of Google's earliest years.

How has Google become so influential, in your view?

Our mission is one reason. Larry and Sergey thought a lot about it before they got started. At other companies, there are these Dilbertian crews of HR people who show up and say: "We've outgrown our mission and we need to write a new one." That has never happened at Google. The mission is exactly what Larry and Sergey wrote back in the fall of 1998, before any of us were even here.

It wasn't just about Web search. When I showed up, I said, "Guys, shouldn't we be calling the company Google.com?" They said: "Oh, we're not just a dot.com. We're not going to be just about the Web. We're going to be all kinds of things."

Some advertisers don't always like the fact that Google tends to favor regular users over advertisers when it makes changes to its search engine, which can wreak havoc on their ad placement. How do you balance those sometimes competing concerns?

Google is fueled by user choice. We can't rest on our laurels. We know users can pick someone else. When the end-user is happy, they click on more ads, and they really participate with advertisers. Our commitment is to make sure the ad services we offer improve our products and don't erode the user experience.

When I was an engineer, I created an experiment called "no ads at all," where a percentage of users didn't get ads at all. We left that experiment running for five years. Finally, after I moved on to other jobs, people came to me and said, "Can we shut it off?" I said before we shut it off, we should go and get the data. It turned out that users who got ads were happier than users who didn't. People who got no ads at all searched markedly less than people who got ads.