In The Plex

by Steve Levy

  Rubin pressed on, but he needed more money to keep going. He had funding prospects on the line when he took a meeting with Larry Page. Maybe Page would write an email saying that Google wanted to place custom versions of search and Gmail on Android phones; that might help with the venture capital firms. “We really weren’t there to pitch Google,” says Rich Miner, Android’s cofounder. They gave their standard presentation.

  Page had an idea: what if Google bought Android? It was a classic Larry Page moment: ask him to consider a toothpick, and right away, he was thinking about a forest. Later, Page would explain that he and Sergey had been thinking about getting deeper into mobile for a while. “We had that vision,” he says. “And Andy came along and we were like, ‘Yeah, we should do it. He’s the guy.’”

  It was 2005, and Google’s mission was to access and organize the world’s information. To most people, that seemed plenty. Explaining how a company that made an operating system for mobile phones fit into this mission would eventually present a challenge for Google’s publicists. But Larry Page interpreted Google’s mission in the broadest sense. What was good for the web was good for Google. What was good for the cloud was good for Google. So it made sense that what was good for the growing universe of wireless communication over mobile phone carrier networks would also be good for Google. Because the carriers tightly controlled the software that ran on phones using their networks, Google had reason to worry that it might not have the opportunity to place its services on those nets. An open network would give Google unlimited opportunity, so that even if Google spent millions of dollars to develop an operating system—and then gave it away for free—it would still come out ahead.

  If the move wound up putting Google in the path of a few more competitors, so be it.

  Before Rubin committed to Google, he had to take the measure of his potential employer. It wasn’t easy, because he found Google crazy. He was accustomed to companies such as Apple and Microsoft, where you’d meet with someone, go over the corporate org chart, and figure out where you’d fit in. “At Google, it was impossible to figure that out,” he says. “I met with everybody multiple times, and I’m pretty good at extracting information—and I couldn’t find out.” But he did at least learn that Alan Eustace, Google’s director of engineering, would be his boss. Rubin asked Eustace about the process Google used to improve itself. He expected to hear about quality assurance teams and focus groups. Instead Eustace explained that Google’s brain was like a baby’s, an omnivorous sponge that was always getting smarter from the information it soaked up. When a Google user searched for Nike shoes, he was told, there were sets of algorithms that determined search results and another set that figured out which ad should appear alongside the results; then another set of algorithms would run an instant auction. But the system was always learning. Rubin liked hearing that; his own companies had evolved from protean ideas. Danger had originally been centered on digital cameras before becoming a cell phone company.

  So in July 2005, Android went to Google. The biggest adjustment Rubin had to make was keeping his limited-edition German sports car in the garage—in 2005, ostentation was still discouraged in the Google parking lots.

  At first Android was Larry’s thing. “Early on, Sergey opted out, just saying he really didn’t understand mobile yet. Eric was supportive of what Larry was doing,” says Rich Miner, who went to Google with Rubin. The acquisition actually contradicted Schmidt’s frequent proclamations that there would be no Google phone. “We’re not going into the phone business, but we’re going to make sure Google is on those phones,” Schmidt emphatically said in October 2004, nine months before Google bought Android—and got into the phone business. “But it wasn’t very long before Sergey and Eric were experts on mobile, and could speak very competently about it,” says Miner. At product reviews, Brin and Page would throw ideas at the team. Some were worth thinking about: Why don’t we have a keyboard on the other side that mirrors the one on the front? Others not: Why don’t we put solar panels on it? Schmidt was tough about some aspects, too. At one GPS, unhappy with a prototype keyboard, he looked straight at one of the product managers. “First impressions really matter here,” he said. “Don’t fuck it up.” At another meeting he expressed impatience that Android hadn’t responded quickly enough to his request for five thousand units so Googlers could “dogfood” the product. (“Eating your own dogfood”—that is, letting Googlers use product prototypes in their everyday lives to detect flaws and identify possible improvements—is a sacrosanct principle within the company.) “You’re not taking my request seriously!” he said, just about pounding the table to punctuate his words. The line assumed legendary status in the Android building and became a kind of punch line.

  Rubin appreciated the interest of his bosses, but he appreciated even more the unusual degree of autonomy he was granted. He managed to get a special concession for his Android team: he could do his own hiring. His basic team consisted of the group he’d imported from Android, merged with new hires snapped up from two groups abandoned by other companies. One contingent came from Palm, where they’d worked on a system called PalmSource; they were devotees of the open-source software movement and were drawn by Google’s promise that Android would be an open-source project, open to hacking and improvements by the geek community that avidly participated in such projects. The other was a bunch of people from Microsoft’s ill-fated WebTV project. “We had these three groups with very strong ideas about what Android should be, so there were a lot of heated debates,” says Dianne Hackborn, who had come from PalmSource. Rubin also drew talent from within Google.

  Now that Google was running Android, the former start-up’s business model changed. The razor part of the equation—the operating system—would still be free to carriers, but the blades were no longer boring things such as back-end services. Android would be a Trojan horse for Google’s consumer apps, chief among them mobile search. “They already existed, so I didn’t have to do any work,” says Rubin. “And it’s not boring. It’s stuff like Gmail, maps, all this cool stuff. The boring back-office stuff went away, and it became stuff that delights consumers.” Better yet, the partner reaction to Android changed. Not long after Rubin joined, he returned to Samsung. This time, backed by an Internet giant, he left with a contract. He had similar experiences with other companies he approached. One deal was made with an executive who had previously told Rubin that only in his dreams would such an agreement materialize. “We had to try really hard not to let decisions be affected by that,” says Rubin.

  Rubin tapped a new Google employee named Erick Tseng to manage the product. Tseng had a CS master’s from MIT and had spent a few years as a McKinsey & Company consultant before going back to school to get an MBA from Stanford. He’d been about to take a job as a venture capitalist with Sequoia when Eric Schmidt, who lectured at the business school at Stanford, took him to lunch one day. “Imagine a world,” Schmidt told him, “where a company like Google can provide cell phones to everyone in the world for free. Now imagine the possibility of what that can enable. It’s not just about the phones. Whether you’re in the U.S. or you’re in Africa, you will be connected to your family, your friends—and to all the content on the web. That is something Google is possibly working on,” he said.

  “That’s what sold me on Android,” says Tseng.

  At first the Android team worked on two different systems. One was called the Sooner; it was based on the existing Android prototype. With a keypad sitting underneath the screen, Sooner was designed to get into the market quickly. Sooner absorbed most of the energy in Android’s early days at Google. For the long term, Rubin’s group wanted to develop a more advanced platform with a touch screen. He dubbed that version the Dream. But in January 2007, Apple’s new iPhone redefined the smart phone. With its touch screen, tightly integrated software, and sharp display, the iPhone had delivered the future ahead of schedule. Sooner became never, and Android went straight to the Dream.


  Early that year the press began reporting rumors that Google was indeed working on a “Gphone.” Brin and especially Page were furious at the leak, ominously informing employees at a TGIF that Google had launched an investigation and even accidental breaches would not be tolerated. When an employee noted that the publicity about the project seemed positive, suggesting that the company was going overboard in a Nixonesque mole hunt, Page was unyielding. “I think that’s a decision for the team to make, not you,” he said. But Rubin wasn’t too surprised that the news of a Google phone project had leaked out—“If you get a guy who started a company that built a phone, what else are you going to do?” he says. In any case, he said that people didn’t have the imagination to see what Google was really up to, so the secret was safe.

  But as one person in particular began to understand what Google was up to, a bitter rivalry was born. That person was Steve Jobs, the Apple CEO.

  Since Jobs’s original meeting with Page and Brin—the one where the Google kids had decided that he would meet their CEO requirements—the relationship between the two companies had blossomed. The Google founders were entranced by Jobs’s vision and decisiveness, and Jobs was excited by the opportunity to hook up with a business whose activities were entirely complementary to Apple’s—there seemed to be no competitive overlap. The two firms embarked on a potentially glorious, industry-changing alliance in which the veteran Jobs would lend his expertise and wisdom to the smarty-pants Internet kids and the two firms together would take down Microsoft. All sorts of concepts were discussed. How about a free version of the Mac OS, supported by Apple ads? What about a Google-ized version of Apple’s Safari browser? Jobs bonded especially with Brin; both lived in Palo Alto, and the pair would take long walks around the town and up in the hills … current and future kings of the Valley, inventing the future.

  In August 2006, Jobs invited Eric Schmidt to sit on Apple’s board of directors, which included Google board member Arthur Levinson, CEO of Genetech; and Bill Campbell, Google’s corporate coach. Al Gore sat on Apple’s board, while he was the self-described “virtual advisory board” at Google. Intel CEO Paul Otellini, who was on Google’s board, had started supplying the chips for Macintosh computers. There was so much overlap that it was almost as if Apple and Google were a single company.

  Smart phones seemed to be the logical nexus of the unofficial partnership. Google had a bustling mobile division apart from Android, intended to put Google squarely into the world of smart phones, mainly by way of making mobile applications of products like Gmail, Google Maps, and especially search. Apple’s iPhone looked to be the showcase for what those apps could do when liberated from the desktop.

  Google’s mobile division was headed by Vic Gundotra, who had previously been a high-level Microsoft executive. In 1976, at age seven, he had been fascinated by the term “Information Age,” which set a course for his life that led him to work for Bill Gates. For twelve years, Gundotra had bled Windows. But in 2002, sitting with family and friends at a restaurant, his four-year-old daughter accidentally overheard him say the words “I don’t know.” She broke into the conversation with a suggestion: he should get out his phone and find out whatever it was he didn’t know. In her reality, after all, when someone is stumped on a question, the place to look for answers was that hand-size device. It was a eureka moment for Gundotra. “It dawned on me that the culmination of the Information Age was not going to be at Microsoft,” he says. “It wasn’t about a computer on every desktop but making the world’s information accessible and available.” After trying to sound alarms at Microsoft about the paradigm shift, he concluded that the company could not accept the reality that Windows was no longer the center of the universe; the web was. By 2006, he was at Google.

  Gundotra’s team worked with Apple to make sure that the iPhone, shipped in the summer of 2007, launched with two crucial apps: a slick implementation of Google Maps and a special version of YouTube that enabled the iPhone to access its millions of videos. One Thursday Google’s mobile group called an emergency meeting at 7 a.m. to discuss how Google had to push more. Six weeks later, there was a new Google mobile search, rolling out first on the iPhone. Making use of the voice recognition knowledge gleaned by Google’s voice-powered, 1-800-GOOG-411 directory assistance project, the app let you dictate search terms into the phone with startling accuracy.

  But as Android developed, Google’s mobile efforts looked more toward the company’s own technology. “If you love Google, then the Android phone is a phenomenal phone for you,” says Gundotra. “Because it allows us to get innovation out to the phone very quickly.” Google still put a lot of effort into working with other platforms. After all, as people used phones more and more, the number of searches on phones was growing. Eventually the number of searches performed on a phone would exceed those on computers. “I don’t think that anyone at Google has a doubt that the day is coming,” says Gundotra of that milestone. Google professed to have a permanent nook in its heart for the iPhone, which was an unofficial Google cousin, but when Google shifted from Sooner to Dream, Google’s focus turned to its own child.

  Apparently, it took a while for Jobs to understand that Google was becoming his competitor. It was almost a year after the Android acquisition that Schmidt joined Apple’s board. “I feel I fully disclosed it when I joined,” says Schmidt, who adds that he also informed Jobs about the impending Chrome browser. But at that time, Jobs apparently believed that Google’s phone plans rested with the Sooner version, which was more of a competitor to Microsoft’s Windows Mobile than an iPhone rival. When Apple introduced its iPhone in January 2007, Jobs didn’t seem to be worried about Android, at least judging by the mutual good feeling when Jobs called Schmidt to the stage at the product launch. Schmidt joked that the collaboration was so close that the two firms might as well combine. “If we merge the companies we can call it AppleGoo … but we can merge without merging.”

  By 2008, however, the trajectories of the two companies, at least with respect to phones, was less a merger than an impending collision. An implicit acknowledgment came from a decision to bar Schmidt from hearing product plans for Apple’s phone. “It’s not like it was a new discovery—it was an evolution,” says Schmidt, apparently referring to Google’s accelerated plans to launch a device that behaved like an iPhone. “So at the end of my second year [as a board member] Steve and I agreed without discord that I would recuse myself from the phone [discussions].” When the iPhone came up at Apple board meetings, Schmidt would leave the room. (He would later say that he had been kept totally in the dark about the evolution of Apple’s tablet computer, the iPad.) Schmidt also kept his distance from Android, something that Rubin regretted. “There were decisions along the way where I could have used Eric, and I was left to fend for myself,” says Rubin. Meanwhile, Schmidt would joke to Googlers that he treated every Apple board meeting as if it were his last.

  Still, Schmidt insisted that it was a mild case of “frenemy,” with no animus between the two companies. “It’s a model-based tension, not a personal tension,” he would say. His point of view was that the competition was good for users, and if there were losers, they would be other competitors: Microsoft, Oracle, Yahoo

  Nonetheless, insiders say that over a period of months, Jobs concluded that he was a victim of deceit. The first alarming sign of Google pursuing its vision regardless of its effect on Apple was the Chrome browser. It competed with Apple’s Safari browser and also with the open-source WebKit technology that Apple had developed for Safari. It was all kosher from both a legal and an industry practices standpoint, but Jobs wasn’t happy, especially since Google had tried to hire some of his Safari developers.

  Android, though, was much worse. As he learned more about how the benign competitor he had envisioned was actually a full-blown alternative to the iPhone, Jobs became increasingly upset. Yet for months he was reluctant to break with Google. From all accounts, Jobs prided himself as a canny observer not only of busine
ss but also of human character, and he did not want to admit—especially to himself—that he had been betrayed by the two young men he had been attempting to mentor. He felt the trust between the two companies had been violated. After increasingly contentious phone calls, in the summer of 2008, Jobs ventured to Mountain View to see the Android phone and personally judge the extent of the violation. He was reportedly furious. Not only did he believe that Google had performed a bait and switch on him, replacing a noncompeting phone with one that was very much in the iPhone mode, but he also felt that Google had stolen Apple’s intellectual property to do so, appropriating features for which Apple had current or pending patents.

  While Jobs could not stop Google from developing the Dream version of Android, he apparently was successful, at least in the first version of the Google phone, in halting its implementation of some of the multitouch gestures that Apple had pioneered. Jobs believed that Apple’s patents gave it exclusive rights to certain on-screen gestures—the pinch and the swipe, for example. According to one insider, Jobs demanded that Google remove support of those gestures from Android phones. Google complied, even though those gestures, which allowed users to resize images, were tremendously useful for viewing web pages on handheld devices.