Undercover Boss: How Google's Ad Empire Was Built $0.24 at a Time

Join David Nelson, CFA host of the Money Runner Podcast for an exclusive interview with a tech luminary who navigated the high-stakes world of Silicon Valley, shaping the very internet we use today. From early days at eBay to pivotal roles at Google, Jeff Huber unveils the transformative power of data and the inside story of a leader at one of the world's most powerful tech companies. Discover the intricate culture of Google and learn how a focus on innovation and technology can drive monumental changes in industry and society. Finally, witness a bold leap into the future as we discuss the shift from ad revenue to the cutting-edge realm of life sciences and the massive potential of genome sequencing. This is a deep dive into the heart of technology's evolution and its leaders who dared to envision a different world.
00:00 Intro
00:32 eBay to Google
01:48 At Home Network
02:06 Where's my email?
03:17 Let's talk about Google
06:11 Google culture
08:09 Undercover Boss
08:36 Making money was unseemly
10:12 3 significant challenges
11:50 Inside view of Google culture
12:52 "Google has done an admirable job.."
15:26 Google X
16:50 Illumina

Transcript

0:03

Let's get started. Welcome to The Money Runner. I'm David Nelson. I said at the start. Jeff had an amazing career across a wide range of Silicon Valley companies. In this section, we talk about the transition from eBay to Google. You talked about data talking to each other. And I think maybe even before Google and eBay, you were dealing with projects like that, working at companies trying to get their data sets to talk to each other because of this trove of data, but they couldn't do anything with it. Can you can you tell us about that? How important is that in today's world? Yeah, I mean, I'll go way back to start. So I was at university of Illinois in the late 1980s as an undergraduate and was interested then in artificial intelligence. And there was really interesting academic work happening then already around neural nets and expert systems and as I was working on the moon, I was very excited about it. But it pretty quickly demonstrated to me then that they were kind of an academic novelty because, you know, the Internet didn't exist yet. The ability to generate data was very limited. There just wasn't enough data and then enough compute to be able to make them more than an academic novelties, kind of as you go forward through my career. You mentioned eBay earlier. Well, actually, the first step of my Silicon Valley career was a company called at Home Network. And my goal there was I recognize when I was at University of Illinois, I was kind of living in the future because University of Illinois was an early adopter of Internet technologies. So when I was at school in the late 1980s, I had email, I had online discussion groups, I had, you know, collaborative development and coding projects with my with my classmates. And then I graduated and was thrown out into the real world and lost all of those things. I like where where's my email? Where's my, where's my tech group? Where's my. And this was the early nineties before the commercial or consumer Internet was really accessible. So my first step in Silicon Valley was with a company called At Home Network, which was building out broadband networking, specifically over the cable television infrastructure. So if you today get Internet over your cable television provider, whether that's Comcast, Xfinity Charter, Cox, Comcast, etc., there's a chance scarily enough that some of my provisioning code is still running there in the guts of the system to get your. I said at the time, instead you're on the Internet. Somehow you you touch their lives. Yeah. There's a good chance multiple levels. Let's let's shift gears here and we have to talk about Google. You know, you were there when it was private. Am I, right? Correct. So I was not there at the kind of garage stage I started in 2003 when Google was still private. I was roughly employee number 1000 or so when I started. Talking number 2000. Wow. One of the things that struck me in some of the interviews that you did, I think you were you coming from eBay at that point? Yes. So you're coming from eBay. You had a pretty large team there. You had a pretty big title, obviously very prestigious. You said Google was a little different. You know, you talked about leadership and you kind of had to earn it over there. Tell us about that. Sure. So, as you mentioned, I was coming from from eBay after being it at home network. I was at At Home for six years, kind of 2006 to 2001 or sorry, 1996 to 2001 to Ish. And then went to eBay. And I was inspired by eBay where it was really leveling the playing field so that little guys, small merchants could compete on a, on an equipped equivalent basis with large merchants. And I was very inspired by Pierre Omidyar and the vision that he had for eBay. At eBay, I helped build out the underlying API platform that further kind of expanded. Speaking of the the kind of making data talk to each other, really extended the eBay platform out so that everyone had access to it and access at scale. Then though, the moon and I had a fancy title and large team when I was there, but one of my realizations at eBay is it was it was in a transition window where it had moved from the original founder, Pierre Omidyar, to being more, quote, professional management. And in my view, they lost something in that transition. I was a big believer in innovation and innovation through technology. And eBay in that window was at a period where they were focused much more on kind of marketing and expanding share and had a view that, you know, it was small incremental changes instead of kind of step function, big gains. So that led me to consider other opportunities. And Google was the one that stood out from the very first discussions at Google. You know, things that would take weeks or months at eBay were kind of a five minute discussion at Google because there was so much better or so much more understanding and appreciation of the power and leverage that you could get through innovation with technology. So from the I decided that I wanted to be a Google and then it was a question of, okay, what's, what's the right role, what's the right opportunity? And that's where I gained a much greater understanding of Google and Google's culture, which is Google is a very kind of bottom up culture and very meritocratic. And as I was talking to. Could you explain flat and what it means to a layman like myself? So it was organizationally flat, very little management. So my boss at the time, part of the reason that which was a guy named Wayne Rosing, who was the former CTO of Sun Microsystems, was kind of the senior engineering leader at Google. Then at the time, he had an organization of roughly 300 engineers that were all reporting directly to him. So part of his motivation for hiring me and some of my colleagues was to get to a slightly more rational structure. So you got to take some of the load off them. So I was going to take some of the load off. But one of the things that he encouraged on coming in was was was saying to me of Jeff, if you come in with a fancy title with the culture, there's risk of of essentially organ rejection. So a much better path for you is you should come in as an individual contributor without a fancy title. And clearly, I expect you to, to, to progress and have a broader impact here, but come in as an individual contributor. Just dive into issues and problems going to demonstrate yourself and I am highly confident that people will will flock to you and want you and ask you to lead them as opposed to if I declare it upfront, then people will view you with skepticism and you risk organ rejection. You sound like the TV show Undercover Boss. A little bit. A little bit. So I. It was a big leap, but I put my faith and confidence in Wayne, in his wisdom, and did exactly that. So went from a fancy title and 100 and something person team at eBay to being an individual contributor and no title to Google. And then within kind of three months or so, it panned out exactly as he predicted. You worked on some of the more profitable areas of of Google Google ads, Google apps, maps. I took this off of an interview. You said that it was unseemly to make money. That was kind of a culture that's hard to believe for a company. The size and scope of alphabet. Yes. At the period I started again, this was before Google being public. And again, back to Google culture. And there is there's an enormous number of amazing, wonderful things about Google culture. But one of the quirks was that making money was was viewed as a little bit unseemly. It was a very academic place. And I think in a lot of respects, my hiring was a bit of an experiment because I was the first of what ultimately became kind of my set of peers that became vice presidents. Fancy Vice Presidents who Google. I was the first person that was hired that didn't have a Ph.D. as a background. I had an undergraduate degree in computer engineering and also I had worked at eBay previously. So I was used to the concept of a marketplace and making money, being kind of interesting and not necessarily unseemly. And that said, I recognize the importance, given the discussion we had about culture earlier, of being able to translate that into things that would resonate for for Google and Google engineers and Google culture. So specifically, instead of putting a focus on, okay, Google should make money and should make a lot of money. I looked at when I landed there, kind of the challenges ahead and I saw three really significant engineering challenges that hadn't ever been confronted before. First was that Google was the largest real time auction system. That was kind of rivaling already then the transaction volumes on Nasdaq and was already at that point ahead of the the auction system at eBay, where it had been previously. Second thing is Google made money roughly $0.24 at a time. That was the average at end of each click of each click or each search query translated into clicks. So Google made money $0.24 at a time. So it was also the world's largest micropayment transaction system, which was something that was, you know, there was a lot of interest in, but nobody had had built that enabled previously. And then the other thing, as we dug in a bit more was it was clear that there was potential to align user interests and advertiser interest by focusing on quality. And to do that, you needed a click through rate prediction system as part of the ads quality system, which ended up being the, you know, the most interesting machine learning and certainly now has demonstrated itself as the most valuable machine learning system ever built. So it was by focusing on those kind of engineering and technical challenges that translated Google's ad system into terms that was interesting and exciting in Google culture. This is where Jeff and I part company when we talk about the culture at Alphabet. You mentioned culture here, so let's talk about it. Where do you come out on the role of big tech, a company like Alphabet and others, you know, in terms of the regulation of society or maybe pushing society in in a certain direction. Is it overhyped? Does it happen? And should it happen? So back to our discussion on regulation. I think government does play an important role. I think in many respects, if you look at focusing on Google, specifically, Google's mission is to organize the world's information, make it universally accessible and useful. And I think in the scheme of things, Google has done a pretty amazing job of doing that. And their products are primarily accessible for users in and free to use. I think there's an important role for regulation to pay in in protecting people and people's privacy. But in the scheme of things, I think that Google has done an admirable job of that. And some of the current issues that Google is going through, I think are overreach. The biggest criticism I would have a Google so far is that they've done such a good job of of executing that there isn't enough competition out there. But every time you, you know, do a search, every time you decide which email product to use, there are other products out there that are available. Google's done a better job, so they have more customers. That doesn't fit the classic definition of of a monopoly that I'm familiar with, which is users not having to our customers not having choice. So along around this time, you're ten years in and you were looking for a change. Walk us through the the the the the shift over to Illumina Lifesciences. That's a pretty big shift from where you were. Yeah. So I had been at Google for a decade, kind of 2003 to 2013 and it felt like a decade, ten years was a good opportunity or a good milestone to pause a little bit and reflect and look back at what I'd accomplished in that decade. And if I was going to commit to kind of starting another decade of Google, I wanted to make sure that I was both having the biggest impact for Google. But I also had self-assessed that I wanted to make sure that I was energized and excited and I was giving it my all instead of just kind of turning the crank. And as I reflected on that, I look back at kind of building Google's ad system from 500 million to over 50 billion in annual revenues and in the early days of Google Apps, now Google workspace and building that up already, then it was on the verge of having a billion users. In the early days of Google Maps and then running it as a large enterprise, as a general manager. As I reflected back the time that I thought I had the biggest impact and for Google, but also I was the most energized and excited were kind of the early days of each of those of of building the foundation and building the culture of execution and getting the strategy right and getting the kind of the product roadmap right. So as I reflected on starting a second decade at Google, I wanted to get back to the early days and building at Google. And the place to do that then was, was Google X, which was the collection of all of the crazy new things like self-driving cars, etc.. The other side of it is in terms of area to focus is I'd also self-assess that I'm very energized by learning. So before I started in the ad system, I had no, no background in, in that area or technology and had to learn it. And that was very exhilarating. Or before starting on Google Maps, I had no deep background in the area but was able to learn it. As I reflected of things on the horizon that I felt that were going to be important, I also saw a particularly the area of life sciences and biotech going through a substantial change. Specifically, there was just this tidal wave of data that was going to be coming from technologies like genome sequencing, where effectively now with genome sequencing, you're digitizing the the the underlying technology of life. And that tidal wave of data both was going to be a Google scale problem, but something that could benefit from the kind of technologies I'd spent the prior decade of big data systems and, and machine learning and AI systems developing. Is that when you ended up on the board of Illumina? Was it. Yes. So you're still working at Google? Yes. So I'm working at Google. I've made the conscious choice to move to to Google X, ultimately becoming co-founder of Google's Life sciences efforts there. And then serendipity sometimes just happens where the universe works in strange ways at literally kind of within a week of of declaring that was a direction that I wanted to head. I got a call out of the blue from Illumina, who was the leader in genome sequencing, who was similarly, from their vantage point, seeing this just massive amount of data being generated. And their interest was that ultimately they needed their customers to be able to make sense of it to get maximum value from it. So I was asked to join the Illumina board to focus on help them think through their big data strategy. I hope you enjoy today's interview and of course, you know what comes next. This is the part where I ask for your support and no, it doesn't cost money. If you like today's podcast hits, subscribe and let us know what you think. Also, don't forget to visit me on Substack. Why publish my blog and research? You'll find articles, charts, audio and video. Thanks for joining. I'm David Nelson.