The Journal. - She Was Google’s First Landlord. And She Changed the Internet.

Episode Date: August 15, 2024

Former YouTube CEO Susan Wojcicki died last week at the age of 56. WSJ’s Miles Kruppa shares how Wojcicki developed a reputation as perhaps the most important Google employee that few people have heard of outside of the company’s walls. Further Reading: -Former YouTube CEO Susan Wojcicki Dies at Age 56  -YouTube’s Susan Wojcicki on Transforming the Video Service  Further Listening: -Why the DOJ Is Suing Google Again  Learn more about your ad choices. Visit megaphone.fm/adchoices

One of the most prominent women in Silicon Valley, Susan Wojcicki, died last week from lung cancer. What was your first thought when you heard the news of her passing? You know, I guess my first thought was, she was way too young. I mean, she was only 56. That's our colleague, Miles Krupa. He covers Google, the company that Wojcicki She was way too young.

And it's impossible, as with most things, to sort of distill it to one person's efforts, but it's really hard to envision the internet in 2024 without her contributions. Wojcicki was one of Google's earliest employees. She never sought the spotlight, but she helped lead the company through periods of tremendous growth. While she was at the company, she was in charge of two initiatives that changed the way we monetize the internet, online advertising and YouTube. important, if not the most important,

people in shaping how we all make money on the internet. The fact that websites run ads placed by Google on them, that all goes back to her. And she was sort of there every step of the way, setting the guidelines, setting the rules, creating the tools to get people paid. And it's just been sort of a fascinating journey, clearly cut short. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Thursday, August 15th. Coming up on the show, how Susan Wojcicki changed the internet.

Don't you wish your life came with a warning app? That dog does not want to be petted. Well life doesn't always give you time to change the outcome, but pre-diabetes does. Take the one-minute test today at doihabprediabetes.org, brought to you by the Ad Council and its pre-diabetes awareness partners. Susan Wojcicki was born in the late 60s in Santa Clara, California,

right in the heart of what would become Silicon Valley. Her dad was a physicist and her mom was a journalist. Wojcicki studied history and literature at Harvard. But she eventually found her way into the tech world and moved back to Silicon Valley, where she landed a job in the marketing department at Intel. But Intel wasn't the company where she would truly make her mark. That would be Google.

Where does Wajiski's relationship with Google start? So this bit is actually a really important part of Google's lore. Basically, Susan was working at Intel, and she had just married her husband at the time and they had just bought this house in Palo Alto. And so during that time, right after they purchased the house, they got introduced to two Stanford PhD students, Larry Page and Sergey Brin, who had been working on a new kind of search engine and needed a little bit of space to expand away from their labs on campus.

It was 1998, and while Page and Brin needed space to work, Wojcicki and her husband needed help paying off their mortgage. Susan said, okay, you can have our garage, you know, just please do your thing over there her husband needed help paying off their mortgage. Susan said, okay, you can have our garage, just please do your thing over there and don't have people come in through the house. We're happy to have you as sort of a sub-letter of the garage. In those early days, Google had just a handful of employees, a few dozen computers, and no revenue. The company operated out of Wojcicki's garage for about six months, paying $1,700 a month in rent.

And in 1999, Bryn asked Wojcicki to bring her marketing expertise over to Google. She was their 16th hire. Here's Wojcicki in 2013, talking about what the founders wanted Google to become. So I joined, and I was there for one day, and Sergey comes up to me and says, I have a mission for us. It's to organize the world's information to make it universally accessible and useful. What do you think? She joined as a very early employee and is the first marketing hire. What do you think? did as part of that job? You know, what website wouldn't want a little Google search tool on their site

allowing people to search through all of their content? Did it work? It worked. It worked really well. People later attributed a lot of Google's early growth and early awareness to that decision. As Google's search engine expanded in reach, Wojcicki started shifting her attention to the company's ad operations, trying to figure out how could Google use its reach to make money

and also promote an open internet. She spoke about this in a 2013 interview. Our goal was how do we enable publishers to be able to just focus on the content and use Google's ad sales teams for all the different sites out there that wanted to be able to serve ads on their pages. And when we think about it, I mean, the internet's free. And the reason that everyone gets to see all this free content is because it's ad-supported.

Under Wajiski, Google launched a product called AdSense. It was basically a widget that websites could install to let Google facilitate ads on their pages. Google would then take a cut of the ad revenue. The success of AdSense set the stage for Google's dominance in the online ad space. And then in 2007, Wojcicki made an even bigger move, going deeper into the ad market. She advised Google to acquire a $3.1 billion company called DoubleClick.

DoubleClick was kind of one of the bigger players in what we now call ad tech, advertising technology. DoubleClick was a business that made it really easy for advertisers to find spots across the internet to place an ad. It also helped advertisers manage and grow their network of ads. to find spots across the internet to place an ad. It also helped advertisers manage and grow their network of ads. And one of the key ways that DoubleClick was able to do that so well was by tracking users. DoubleClick had one of the most widely used cookies on the internet at the time.

So one type of cookie that advertisers use is really useful for tracking people around the internet and following their browsing activity and building profiles of what these people are like. And so by buying DoubleClick, Google was also buying all of that. And when you pair that up with what Google knows about people who use its search engine, that could be a really powerful thing. The purchase of DoubleClick just sort of supercharged Google's efforts about people who use a search engine, where AdSense and DoubleClick helped publishers, retail companies, and even personal blogs take advantage of Google's reach on the internet.

And Wajiski's push to acquire DoubleClick kicked off a period of Google consolidating its strengths in all parts of the online advertising business, a business that in recent years has landed Google in court facing antitrust lawsuits. Google has argued that there's plenty of competition in the ad business. Wojcicki's successes weren't limited to building up Google's online ad business. For years, she had also been interested in translating that growth over to online video. And she saw the potential in a new startup, YouTube. That's next. pre-diabetes does.

In the early aughts, Google decided it was time to enter the online video space by building its own video platform. people were going to create and upload videos online and people would want to watch videos of random people online. It may seem obvious now, but that was not obvious at the time. Nobody who invented the internet was like, I know what we could use this for, watching cat videos. Wojcicki talked about this change she was seeing in a 2016 interview.

TV is probably one of the biggest markets from ads, from subscription, from time spent. And if you look at the next generation, they are completely changing the way that they watch TV. Wojcicki wanted to quote, reinvent TV and attract advertisers. But back in the 2000s, online video was still a new place and her vision was being challenged by a competitor.

So she was running this thing called Google videos and it was struggling. It was not doing very well and it was getting its lunch eaten by a startup called YouTube that was founded in Silicon Valley not far from where Google was headquartered and just sort of growing at a pace that was clearly outflanking Google video by a wide margin. In a risky move, Wajiski convinced Google to buy YouTube for $1.65 billion. At the time, that price tag seemed way too high. YouTube was only bringing in $15 million in revenue in 2006. What was Wojcicki hoping to do with YouTube?

She definitely talked about this vision of creating an internet where anybody could make money posting their stuff online. I think she became really invested in that vision But it wasn't a significant part of the company's business. was different from TV but just as good as TV. Well, so YouTube had established in 2007 this what they call Partner Program, which basically pays out 45% of advertising revenue to the video creators who upload to YouTube. And Susan came into the job and basically said, like, this is a key strength and these creators,

you know, we need to show the world that these people are like the new stars. Like, this is the new Brad Pitt, this is the new Angelina Jolie, like, people are going to follow YouTube stars instead of these celebrity actors more and more in the future. Like, people are going to follow YouTube stars instead of these celebrity actors more and more in the future. And advertisers, if you want to capture a slice of that attention,

you need to be on YouTube. a $32 billion operation. And she found other ways to bring revenue in, like through a subscription program. But just like Google's ad business, YouTube also brought challenges for Wojcicki while she was CEO. As the platform became more open and accessible, problematic content. of these tools are in so many ways awesome and incredible and a democratizing force, but can also allow bad things to be spread just as quickly. YouTube had been struggling to moderate videos

that violated its policies against things like hate speech and promoting terrorism. In 2017, a number of major brands had pulled their ads from the platform, saying they were placed next to racist content. And then later, during the COVID pandemic, the platform was accused of censoring contrarian views when it took down videos containing medical misinformation.

How did Wojcicki respond to these controversies? You can debate whether YouTube is too censorious or whether it's too permissive, how did Wajiski respond to these controversies? AI tools that they use to scan videos automatically to try to find stuff that shouldn't be on YouTube. And so for what she needed to do to convince advertisers that YouTube was an all right place to be, she managed to find that middle ground in a way that ultimately allowed YouTube to continue growing. Do you have a sense of what she would say to defend the work that she did? I think she would just point to the amount of people who are making a living online now.

For a while there, it definitely felt like there was sort of a flourishing of the open internet. If you had a voice or you just had an interesting idea or you were a news outlet, of the open Internet. She said in a company-wide note at the time that it was partially so she could focus on her health. When did it become public that she was dealing with lung cancer? I think none of us really knew until Friday. Oh, wow. And how have people at Google spoken about her since her passing? It's been a pretty unanimous response,

both inside Google and in the wider tech industry, that Susan was important in ways that most never really appreciated. And just also somebody who sort of led with humanity, Neil Mohan, her successor as CEO of YouTube. When I spoke to him last year, he basically described himself as leading in Susan's vision, which is a sign of how much he and others at Google respect what Susan built at YouTube and the kind of strategies she had put in place. Susan Wojcicki accomplished so much, and she was arguably just as vital to Google's success

as Larry Page and Sergey Brin. Why wasn't she as well-known? She didn't seek the spotlight. I don't think she was given to the kind of hype cycles and self-promotion that we see often in Silicon Valley. And in many ways ways that was refreshing. And you know, I think people were sad to see a really important woman in technology

die way before she should have. Her enduring legacy will probably be her work in those early days at Google. Having the garage and then having some of the insights that made Google, not just a search engine, but the company with its fingers in every part of the internet. That's all for today, Thursday, August 15th. The Journal is a co-production of Spotify and The Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts.

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