A Google official gave a behind -the-scenes look Friday into the workings of the company at a conference held in the Michigan Union. The conference, titled the Global Operations Conference, was put on by the University’s Tauber Institute for Global Operations, and was meant to open a dialogue between companies at the forefront of their field, students and faculty.
Representatives from General Motors, UPS and Cisco made speeches alongside Mark Matossian, a University alum who oversees the company’s data center, which ensures the company’s applications – including Gmail and YouTube – are functioning properly.
The rapidly growing company, which was co-founded by University alum Larry Page, has undertaken a lot of large projects in recent years, including the GoogleBooks project that began digitizing the University’s entire library in 2002 – the first of several library partnerships.
Matossian said projects like this fit into the company’s goals.
“We have a very simple mission statement, which is organizing all the world’s information,” Matossian said. “The tricky part about it is that there’s a whole lot of it, and it’s in a lot of different forms.”
Matossian said that to accommodate the fast growth and change, the company is built as a self-sustaining, vertically integrated operation. For instance, Google constructs its own servers instead of buying them from another company.
Matossian continually pointed out during his speech that Google is a rapidly growing company that has to facilitate its own needs, such as building its own servers and server sites.
“If you’re going to build the world’s largest supercomputer you need some really, really good tools to manage it and they don’t exist on the market,” he said.
Business Prof. William Lovejoy, another speaker at the conference, said he was not surprised by Matossian’s description of Google’s hardware needs.
“Google wouldn’t even exist unless you found it convenient to use them as your search engine, which means they have to protect that ability, so it makes sense to make their own hardware but make it proprietary,” he said.
Later in his speech, Matossian said rapid growth of the company’s earnings has shaped its internal workings. Google’s revenue rose by more than 60 percent last year. The year before that, it nearly doubled.
“That’s the kind of growth that radically affects how you fundamentally structure a company in your operations,” he said.
Matossian said Google is made up of a number of smaller, lesser-known divisions that deal with specific goals. Google AdWords and AdSense, for example, take care of Google’s advertising development and sales. Google moved the AdWords division headquarters to Ann Arbor in 2006.
“Most people think of Google as that search company,” he said. “Wall Street thinks about Google as that advertising company, and in many senses it is.”
In the company’s advertising agreements, Google doesn’t make a profit by just displaying an ad – someone has to be click on the ad for Google to receive money, Matossian said.
“Google only gets paid when someone clicks on the ad,” he said. “So there’s this strong incentive in the company to have very relevant ads.”
Matossian said Google Operations only serves within the company – it does no work outside of Google. This opens up the lines of communication between his branch and branches of the company that need hardware or other services.
“With internal customers, yes, we can do a lot of close collaboration with developers over hardware, as well as the customers on the other end of the chain,” he said. “We don’t have a distribution channel to associate with, at least an external one, we have our own internal distribution channel that handles logistics as well.”