“The More I Find Out, The Less I Know”

Finance and Economics Peter Leppik Finance and Economics Peter Leppik

Money Changes Everything (A Parable of Google)

Before Google, if you wanted to find something on the Internet you most likely looked on Yahoo. If not Yahoo, then you probably went to one of the AltaVista-like search engines, but by the time Google hit the scene all the search engines were so cluttered with advertising as to be nearly useless.

What made Yahoo useful was not that it was complete (it wasn't), but that for many topics searching the Yahoo directory was likely to give you highly relevant web pages. Part of this relevance was due to the fact that Yahoo was compiled by people, not machines, and people are very good at judging whether other people will find a web site relevant. Then, as now, advertiser-supported web sites could earn more money if they had more visitors, so a listing in Yahoo was valuable.

Unfortunately, using people to compile a web directory doesn't scale well. You can only add to the directory as fast as your staff can review and classify web sites, and obscure searches are likely to come up empty-handed.

Then Google came along and changed everything.

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