Google Maps

Ben and David cover the series of three 2004 Google acquisitions that formed the core of Google Maps as we know and love it today: Where 2 Technologies, Keyhole and ZipDash. From nearly zero adoption between the three companies at the time of acquisition to well over 1 billion users today, does Google Maps merit admission to the hallowed Acquired A+ pantheon? Tune in to find out! Sponsors: Vanta: https://bit.ly/acquiredvantaServiceNow: https://bit.ly/acquiredservicenow26Legora: https://bit.ly/acquiredlegoraStatsig: https://bit.ly/acquiredstatsig26 More Acquired! Get email updates https://www.acquired.fm/email with hints on next episode and follow-ups from recent episodesJoin the Slack http://acquired.fm/slackSubscribe to ACQ2 https://pod.link/acquiredlpMerch Store https://www.acquired.fm/store! © Copyright 2015-2026 ACQ, LLC Links: Bret Taylor on “Satellite Mode”: https://twitter.com/btaylor/status/1099370126678253569?lang=en Justin O’Beirne’s great pieces on Apple vs Google maps: https://www.justinobeirne.com https://www.justinobeirne.com/ Carve Outs: Ben: Marc Andreessen on The Moment with Brian Koppelman: https://overcast.fm/+BgXAjz54oDavid: The Expanse books: https://www.amazon.com/gp/product/B077L6GJWW/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Ben Gilbert?

  Um, I have, I don't want to spoil. I have like some stuff that I could tell you, but I don't want to spoil it. Awesome. Well, Google Maps. Google Maps.

• 0:21Ben Gilbert?

  Welcome to season five, episode three of Acquired, the podcast about great technology companies and the stories behind them. I'm Ben Gilbert and I'm the co-founder of Pioneer Square Labs, a startup studio and early-stage venture fund in Seattle.

• 0:36David Rosenthal?

  And I'm David Rosenthal and I am a general partner at Wave Capital, a early-stage venture firm focused on marketplaces based in San Francisco.

• 0:44Ben Gilbert?

  And we are your hosts. Today, we are talking about Google Maps and the acquisition of three companies, starting with Where2 Technologies in 2004, that set the whole thing in motion. And David, I would not have guessed it when starting the research, but there's a chance this is as big of a success, but far less discussed than our shining example of an A+ Instagram. And listeners, over the next hour or so, we, or at least I, am going to try and build that case.

• 1:14David Rosenthal?

  Oh, I can't wait to hear it. Well, that's actually a good question, which probably Instagram is used more, like in terms of more individual, like uses, sessions per day than Google Maps. But I don't know. If you count all the APIs of Google Maps, like, it might be close.

• 1:33Ben Gilbert?

  Yeah, the dual revenue model as one, being a different front door to Google than search, and two, actually now selling that API access. But we will get into all of that and more. All right, listeners. Now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year on audit or a static PDF, then everyone would nod and you're done. But in an AI-first world, that doesn't hold up anymore.

• 2:04David Rosenthal?

  Yep, your risk surface changes every week now. A vendor turns on an AI feature, or someone writes in a new model without telling IT, and your posture is different than it was last week, let alone at your last audit. Vanta's own research found that around 70% of companies have this quote-unquote "shadow AI" running with no security review at all.

• 2:25Ben Gilbert?

  Right, and that's where Vanta comes in. They're the leading agentic trust platform, meaning they've built the thing that closes the gap, and the way that they close that gap is Vanta Agent. Think of it as a GRC engineer, that's Governance, Risk and Compliance, except that it's software and it doesn't sleep. It finds the issues, drafts the fixes, and cuts the time that you'd spend on vendor assessments in half.

• 2:47David Rosenthal?

  In half, which is exactly why more than 16,000 companies today run on Vanta. Companies like Ramp, Cursor, and Snowflake all stay audit-ready and catch the risks that crop up between audits across every vendor, every AI tool, the whole environment.

• 3:05Ben Gilbert?

  And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance, and the work to earn and prove trust. We're huge fans of Vanta over here, and literally hundreds of Acquired listeners have become Vanta customers at their companies over the years. So you can get $1,000 off Vanta at vanta.com/acquired. That's V-A-N-T-A dot com slash acquired for $1,000 off, and just tell them that Ben and David sent you. If you like the show, you should come join the other 2,500-plus Acquired fans that are hanging out in there. And if you want more of the show, you should become an Acquired Limited Partner. David and I release one LP show for every main show, and we use these episodes to go deeper on company-building topics.

• 3:49Ben Gilbert?

  The last of which was on a not very well-known topic with Andrew Abrabson from Riviera Partners on how the best companies in tech search and recruit for product executives. You can get started with a seven-day free trial and listen right now here in the podcast player of your choice by clicking the link in the show notes or going to glow.fm slash acquired.

• 4:12Ben Gilbert?

  All right, David, I'm pretty excited to do a classic acquired episode.

• 4:15David Rosenthal?

  I know, this is gonna be classic. I noticed in our LP show read, you no longer say how buttery smooth it is to subscribe because it is very buttery smooth, but we got a bunch of feedback in the survey that people didn't like that description.

• 4:29Ben Gilbert?

  Yeah, I don't, we got a lot of funny feedback in the survey. I think actually, we should do an LP show on stuff we learned from the survey because there's a lot of good, of course, there's like interesting demographic stuff. For example, the top two types of people that listen to the show are product managers and engineers, but there's a lot of other really interesting data that I think we should tease out in an LP show.

• 4:48David Rosenthal?

  Yeah, we totally should do that. We had, what, almost 800 responses?

• 4:52Ben Gilbert?

  Yep.

• 4:52David Rosenthal?

  Which is great. Thank you for all the feedback and some great helpful stuff, some really funny stuff, but mostly we just appreciate, you know, all of you for listening. It's super cool. So, thank you.

• 5:03Ben Gilbert?

  All right, David, you want to dive into the acquisition history and facts?

• 5:06David Rosenthal?

  Let's do it. So, we go back to 2003, relatively recent by acquired standards.

• 5:14Ben Gilbert?

  Yeah, we're not starting with like the original cartographers.

• 5:17David Rosenthal?

  No.

• 5:19Ben Gilbert?

  Someone thought of an idea of a map and...

• 5:23David Rosenthal?

  It's been a busy week here at Wave, you know?

• 5:27David Rosenthal?

  No, we go back 16 years to 2003 to Google in Mountain View. It is pre-IPO Google, as we're going to see just pre-IPO Google. They're starting to gear up. They have found their business model of paid search inspired by Overture, which we covered.

• 5:46Ben Gilbert?

  The borrowed best business model of all time.

• 5:48David Rosenthal?

  Yes, we covered with the Internet History Podcast, right?

• 5:52Ben Gilbert?

  Yep, Brian McCullough.

• 5:54David Rosenthal?

  Yeah, thank you, Brian. So, it's 2003 and a young product manager at Google, fresh out of Stanford, whose name is Bret Taylor, is working on a little, and truly little, feature of Google at the time called Search by Location. The idea is that you could enter searches into Google by location, but there's no maps. There's no, it's like completely useless and in Brett's own words, it had zero users per day.

• 6:25Ben Gilbert?

  And I think if I remember right, you had to like use a keyword, like you were typing in the search bar and it was like location colon or something like that to scope where you wanted to, I mean, it was like a command line function.

• 6:36David Rosenthal?

  I mean, I don't remember because I didn't use it.

• 6:40David Rosenthal?

  But for listeners, the name Bret Taylor might sound familiar. Ben, do you know what Bret Taylor went on to do?

• 6:47Ben Gilbert?

  Is he CTO of Facebook now?

• 6:50David Rosenthal?

  Well, he went on to become CTO of Facebook. Well, he went on to-

• 6:53Ben Gilbert?

  Oh, through FriendFeed?

• 6:55David Rosenthal?

  He founded FriendFeed. He was CEO of FriendFeed. That was acquired by Facebook. He became CTO of Facebook. Then he left, founded Quip, which was acquired by Salesforce, and he is now the Chief Product Officer of Salesforce. There were going to have many illustrious Google Maps alumni as we continue throughout the episode here.

• 7:13Ben Gilbert?

  FriendFeed was so awesome. That was that like time in social where all of the platforms were similar enough that you could build an aggregator and that actually made sense. Like now, Facebook posts have so much crazy metadata and different types associated with them. Twitter, everything has so sort of unique. But FriendFeed basically said, sure, connect with all your services and we'll create one feed of all your friends across all your services. That wildly defies the business models of all these companies now. So that would get shut down immediately, but that was a really cool use of that at the time.

• 7:45David Rosenthal?

  Well, it was like what you worked on with Red Ride of aggregating Uber and Lyft.

• 7:49Ben Gilbert?

  Yep. They didn't like that either.

• 7:51David Rosenthal?

  Great idea. Not anti-business model of big companies. Anyway, we digress. So it's 2003. Brett sits down with Larry Page, co-founder of Google, and recently hired VP of Business Development, Megan Smith, to talk about search by location, the state of the product, the state of the competitive market out there. And they realize, look, this is not, this feature is not cutting it. We need to do better. And what was going on out there, AOL, a couple of years earlier, had bought MapQuest. MapQuest was the leading map, internet mapping product out there.

• 8:28Ben Gilbert?

  And it was already public. They bought it after it was a public company.

• 8:32David Rosenthal?

  Yeah, that's right. They bought it for a billion dollars. I think that acquisition was pre-bubble bursting. It was the most used product out there. Yahoo also had Yahoo Maps out there, which were quite popular. And Google had found out that Yahoo was doing a bunch of work to adding a bunch of features to Yahoo Maps and really making a push. Push on it. And so the three of them decide, we need to really compete in this space. Fortuitously, right around that same time, they get a tip from their investors, Sequoia Capital, one of their investors, that there is an interesting little company down under in Australia that they might want to look at.

• 9:09Ben Gilbert?

  In researching this, last night I discovered that MapQuest is still around. You can go to mapquest.com. The logo is something that I've never seen in my life because of course it's owned by Verizon because the whole AOL to Yahoo Verizon thing.

• 9:23David Rosenthal?

  Right.

• 9:23Ben Gilbert?

  So it's like a still a thing you can use. It uses Mapbox and it licenses sort of maps and data. I couldn't believe it was still around because like my, the last time I used MapQuest, I was like printing out the directions. So that when I was driving somewhere, I could look at the piece of paper and you know.

• 9:40David Rosenthal?

  Yep. That's what you did. Well, we'll get to state of the art in a minute. Well, that was state of the art was you went on MapQuest or Yahoo Maps, you got some directions, you printed them out. And as you drove along or walked along, you were like looking at the sheet of paper and there was no.

• 9:54Ben Gilbert?

  Look how cool it is. This was made just for me.

• 9:56David Rosenthal?

  Yeah, they were just static pages. You entered your starting point, your destination, and you got a static webpage that you then printed out. So down in Australia, though, there is a motley crew of four people, two Danish brothers, Lars and Jens Rasmussen, who had recently moved there. They're Danish by birth. They had been in Silicon Valley in California. They had been working at a startup. That startup was called Digital Fountain. Well, it was a dot com bust. I think it ended up surviving and maybe ended up getting acquired like in the mid 2000s or something.

• 10:29Ben Gilbert?

  They laid off like most of the people.

• 10:31David Rosenthal?

  They laid off most of the people. And so the two brothers had gotten laid off. And they said, okay, well, you know, it's kind of nuclear winter here post dot com bust, but let's start something like, you know, we've seen, we've been through this startup. We were interested in starting a company. Lars was dating a woman who ultimately married, who was Cuban. And she couldn't immigrate to the US. And so she and he decided to move to Australia. So they moved to Australia, but he and his brother. Yens are thinking about a product that they could build. And Jens had the idea that, that, you know, just like we were talking about this state of the art in mapping on MapQuest and Yahoo Maps. It kind of sucked. Like, it really kind of sucked. And maybe like they could build something that was better.

• 11:16David Rosenthal?

  And his idea was that, so if you go way back and try and remember using these sites, you would see a map, but the map wasn't like actually the key part of the experience. It was the list of turn by turn directions on the side of the map. And the map itself was like, you'd get a tiny little like, you know,

• 11:36Ben Gilbert?

  Just for fun, they generate you this tile that's like, look, this is sort of illustrative of where you're going.

• 11:41David Rosenthal?

  And so he had the idea that the map should be front and center, just like a map, and that the directions should be on the map. And the map should not be static, but it should be dynamic. And you could interact with it. You could zoom in, you could pan, you could do all of the things that we now think of as normal, modern mapping applications. The way he thought that you could do this was to make the map based on this concept of tiles. And each tile, it would be dynamic tiles in the map, and they represented a small part of it. And that they could stitch it together so that whatever view you were looking at was an aggregated view of all the little mini tiles that made up the map. And you could move it around and see different tiles and whatnot.

• 12:20Ben Gilbert?

  That's a brilliant technological innovation that enables this. It's amazing to me that it both requires this sort of like breakthrough technology innovation, which is still how maps work today. I mean, there's a lot more vector stuff than just this sort of static tiles world. But that, that's what enabled this mapping revolution. But the vision innovation that, that he really nailed was if you made the map big and pretty and zoomable and searchable, it itself could be a platform for other services, like the map itself could be a platform.

• 12:53David Rosenthal?

  Could be the, the mode of, of interaction. So Lars is like, well, yeah, okay, this is cool. Well, let's start a company around this and let's do this. So he's moved to, to Australia. He convinces Jens to move to Australia. And he recruits two other engineers who are friends of theirs, Noel Gordon and Stephen Ma. And the four of them start working on this out of Noel's spare bedroom in Sydney, in Australia. They decide to name the company, Ben, as you said, Where2 Technologies. Where and then the number two technologies. And they, you know, start talking about how they're going to do this and like, the web isn't even on their mind. Clearly, the only way that you could build an application this performant and dynamic would be with desktop

• 13:35David Rosenthal?

  software, right? Like you would, this would be like, you know, the Encarta encyclopedia, you know, you're going to install this on your desktop computer and it would be super cool. And, you know, you can find what you want panorama, maybe you could still print out the directions eventually. How else could you do this? So they start working on it. They realize that, hey, this is, this is kind of cool. They might be on to something. They search for funding, VC funding for this. So Lars and Jens fly back to California. They meet with a former Cisco executive that they had known, who is a prolific angel investor. His name is Frank Marshall. Frank says, okay, like, this is cool. I'll introduce you to my network, to a bunch of VCs, including Sequoia Capital. So they get introduced to Sequoia and Sequoia gets pretty excited about this. Sequoia have been,

• 14:19David Rosenthal?

  was investors in Google. They were investors in Yahoo, investors in, in lots of, you know, great companies over the years, as we've seen many times on this show. They start talking terms and they give a, unclear if this is a verbal offer, they actually gave a term sheet to the company to invest $2 million for 40% of the company. It was a different time back then, post bubble bursting. So that would be a $5 million post money valuation, selling 40% of the company for $2 million. Times have, have definitely changed in, in the seed market since then. However, before they ink a deal, and, and the brothers are excited about this. They're like, man, great. Sequoia Capital, one of the premier marquee venture firms out there. They're willing

• 15:00David Rosenthal?

  to fund us here, here in Sydney, Australia. This is great. They're excited to do it. Before they actually sign the deal, though, Yahoo releases what the Google folks know that they are about to do is a big update to Yahoo Maps and they add local Yellow Pages listing. And it's, it's clear that like, oh, okay, this is going to be the business model here of like, we're going to have local businesses on these maps. We're going to sell advertising around that. People are going to be able to find them. And this is kind of game changes in the industry. Sequoia sees this and they pull out of the deal. They say, yeah, Yahoo's going to be the winner here. We're not as excited about funding this startup company to try and compete with these giants anymore.

• 15:40Ben Gilbert?

  Sequoia gets a lot of things right, but

• 15:43David Rosenthal?

  Well, they still get something right, though. You know, and this is one thing, they are in many of the best, you know, big platform companies out there. And of course, they're investors in Yahoo and Google. Sequoia does say, as a kind of a parting gift to, while passing with the brothers here, and where to, says, you know, with Yahoo launching this, Google is going to need to respond. And, you know, we're investors, we're on the board of Google, like, we can introduce you to them. We'll broker an introduction. So they, as we alluded to earlier, make this introduction to Larry Page. Back in Mountain View, I don't know for sure, but I assume Lars and Jens fly over again, back to California. They meet with Larry and Megan. They pitch them, this company that they're building, I think I didn't mention earlier, the name of the software,

• 16:28David Rosenthal?

  the desktop software is Expedition. They show them Expedition, how cool it is, they pitch them. And Larry and Megan are interested, but there's, there's kind of two problems. One, as we alluded to earlier, Google's in the middle of

• 16:40Ben Gilbert?

  It's a desktop.

• 16:42David Rosenthal?

  Well, well, the smaller problem is, Google's in the middle of preparing for their IPO. So all deals are on hold, like, period indefinitely. They're not doing any M and A during the quiet period while they're getting ready to go public. This is 2004 at this point. But two, yeah, it's a desktop. So like, we're talking about Google here. Google doesn't make desktop software. Google makes web software.

• 17:01Ben Gilbert?

  Did you see that, that Larry Page quote, "We like the web"?

• 17:05David Rosenthal?

  Yes, exactly. We like the web. That's what Larry, at the end of the meeting, that's what Larry says, like, you know, yeah, this is great, but we like the web. Of course, Lars and Jens, in typical, great entrepreneurial fashion, they say, well, we can do that. So they go back to Australia, and the four of them, and where to, only the four, still just four engineers, they work feverishly for three weeks. And at the end of three weeks, they come back to Larry and Megan, and they say, hey, remember how we had Expedition running on the desktop last time? Well, here it is running on the web. And what they do, they have it running on a web browser. They use this Idea that was, as best as we can tell, and they've talked about it and Google's talked

• 17:47David Rosenthal?

  about it, kind of independently invented, both by the Gmail team and Paul Bootgate within Google, and also where to, while they're trying to get acquired by Google at the same time. And that's leveraging this kind of relatively unknown feature of JavaScript that Microsoft had added to Internet Explorer that allowed it to sync with, allowed a webpage that was already loaded, to sync with XML data stored on a server. So like, ordinarily, and at this time, like, webpages are static. You load a webpage, everything is done. There's no processing happening on the webpage, it's static. But there is this feature that you can dynamically fetch XML data in the background without refreshing the page.

• 18:26Ben Gilbert?

  Asynchronous JavaScript and XML.

• 18:30David Rosenthal?

  Indeed.

• 18:30Ben Gilbert?

  The wave of the future.

• 18:32David Rosenthal?

  The wave of the future. And for all of our engineering audience, and probably some others, you're going to know exactly what we're talking about here. But for everyone else, you may have heard of the term Ajax. Asynchronous JavaScript syncing with XML data stored on a server. Short for, yeah, Ajax. We're coming to the, plumbing the depths of our engineering abilities here.

• 18:57Ben Gilbert?

  All I remember is, this is like, a couple of years before I rewrote the Hudson High School website, and I remember writing a lot of XML HTTP requests, and being like, "This is going to be cool like Google Maps was."

• 19:10David Rosenthal?

  So indeed, you know, I feel like we've been lately been on a Web 2.0 history kick here. But this is, becomes a killer key building block of the whole Web 2.0 era, is the ability to have non-static webpages via this technique. As part of the Slack episode, we talked about Flickr, that had just launched a couple of months before. This is really like, one of the key underlying technologies of the Web 2.0 Renaissance. So-

• 19:38David Rosenthal?

  The Where2 team, they come back, they present to Larry and Meghan, and they're like, oh, well, all right, this is, this is pretty good. And they were doubly impressed and Google was doubly impressed because again, Paul Buchheit at, on the Gmail team that was, I think, I don't think Gmail had come out publicly yet. I think it was still being worked on internally. They were like at the bleeding edge of building web applications. They were doing the same thing internally. So Google was like, wow, man, these engineers must be pretty good if they come up with this independently. So later that summer, in August, Google does complete the public offering on August 19th, 2004. And then very shortly thereafter, probably as soon as they can, once the dust settles from the IPO, in October 2004, Google acquires Where2.

• 20:23David Rosenthal?

  Bret Taylor moves over and becomes the first PM for this new team, which is rechristened from Where2 to Google Maps, very inventive name. So, you know, it was just over the summer while Where2 is building the web version of the product to try and impress Larry and Meghan. Google Maps launches publicly in February 2005. So the acquisition is October 2004. The web product is only a couple of months old. And within months, Google Maps is launched to the public. It's, it's pretty incredible. I feel like we hear this story a bunch on Acquired of some of these totally world changing products are built in just a matter of months by really, really talented engineers.

• 21:06Ben Gilbert?

  One of the things that makes this story so common on this show is there was this time when web applications were so new that it was intuitive what was going to have product market fit because there were so few web applications. I mean, I think like, oh, the first really good interactive mapping software, the first really good interactive, you name it, like, there was probably a big space for it.

• 21:32David Rosenthal?

  Photo software, Flickr, video software, YouTube, you know, all of these companies. Yeah, it was, the floodgates were opened to. Building these applications on the web and whoever could build them fastest and best.

• 21:45Ben Gilbert?

  And the web was so slow at the time, too, that it's exactly it fastest and best. Like, there was, like, this was an era where technology innovations created a 100x better user experience for people that made them actually use those applications. So there was lots of people that would sort of like decide that they wanted to get into this, but it took real technical genius to, you know, work with the internet speeds we had at the time, the browser technologies, to be able to sort of like make that possible for people.

• 22:14David Rosenthal?

  Yeah. And what's interesting is, like, this is pre-Google Chrome days. So actually, all of the browser technologies making this possible are coming out of Microsoft and Internet.

• 22:23Ben Gilbert?

  And Firefox.

• 22:24David Rosenthal?

  And, well, and Firefox, too.

• 22:25Ben Gilbert?

  And Mozilla, yeah.

• 22:26David Rosenthal?

  Yeah, pretty incredible.

• 22:28Ben Gilbert?

  All right, listeners, now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team, and deploying them is no longer the hard part.

• 22:43David Rosenthal?

  Yeah. The hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making. AI security for an enterprise at scale is not a small concern. Like, the risks are real.

• 22:56Ben Gilbert?

  Exactly. And the challenge with AI is governing it, securing it, measuring it, and making sure that it actually delivers value. That is why ServiceNow built the AI Control Tower.

• 23:06David Rosenthal?

  Yep. AI Control Tower gives enterprises a single place to see, manage, govern, and optimize AI across the entire business. And it works with any AI, not just theirs. Every device on your network, every permission across every system, every AI agent, visible and secure, in one place.

• 23:24Ben Gilbert?

  And ServiceNow can do this because they've spent more than 20 years building the operational backbone of the enterprise. The workflows, governance, approvals, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security.

• 23:40David Rosenthal?

  ServiceNow already runs more than 100 billion workflows annually and trillions of transactions for more than 85% of the Fortune 500. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates.

• 23:57Ben Gilbert?

  And in a future that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, who's managing them all?

• 24:06David Rosenthal?

  So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely at scale, go check out servicenow.com/acquired and tell them that Ben and David sent you. Okay, so rewind just slightly back to the end of 2004. Google also acquires two other companies in quick succession at the same time. One is a company called Keyhole. Keyhole was, unlike Where2, was a well-funded startup, I believe located in Silicon Valley in California. It also, though, made desktop software, and it was called Earth Viewer. And of course, as listeners can probably guess, that becomes Google Earth, which interestingly would remain desktop software for quite a number of years.

• 24:49Ben Gilbert?

  And contain a flight simulator.

• 24:51David Rosenthal?

  That's right, that's right. Well, the Microsoft parallels are just very, very important here. Ben, do you know who the CEO of Keyhole was?

• 25:01Ben Gilbert?

  I do not.

• 25:02David Rosenthal?

  Well, it was, I'll give you his name, see if this rings any bells. John Hanke.

• 25:08Ben Gilbert?

  Nothing.

• 25:09David Rosenthal?

  Oh, man. So John would ultimately, after a couple of years, become the VP of the Geo Group, quote unquote, within Google. So he would be taking over all Google Earth and Google Maps responsibility as an executive for that. But then, as oftentimes happens at big companies and at Google, he kind of got bored with this role and wanted to do, go back to doing something new and innovative. And he had come from the video game industry before he started Keyhole. And so he started a little project within Google that was referred to as Niantic Labs.

• 25:41Ben Gilbert?

  No way!

• 25:42David Rosenthal?

  Yes, yes.

• 25:43Ben Gilbert?

  Oh, awesome.

• 25:44David Rosenthal?

  And so John is the CEO.

• 25:45Ben Gilbert?

  Boy, the geospatial stuff makes a lot of sense there.

• 25:47David Rosenthal?

  Indeed, John is now the CEO and co-founder of Niantic, which of course makes Pokemon Go and the new Harry Potter game and all of the...

• 25:55Ben Gilbert?

  And Ingress.

• 25:56David Rosenthal?

  And Ingr- well, started with Ingress, yeah. And all of, well, actually, it started with, I think it was Field Trip, which was a application built on Google Maps that could show like interesting points of interest around you with, if you held up your phone and like panned it around. But yeah, certainly by far the most successful augmented reality game or probably application, period, out there right now.

• 26:19Ben Gilbert?

  Yeah, yeah, for sure. I mean, it is funny, I think when people talk about the emerging AR market, I think that's the widest used AR.

• 26:27David Rosenthal?

  That is the market, yeah.

• 26:29Ben Gilbert?

  Yeah.

• 26:29David Rosenthal?

  Pokemon Go, that's the market.

• 26:33David Rosenthal?

  That was Keyhole. Google also acquires a company called Zipdash, a very, very small company. I believe they paid $2 million for Zipdash. Zipdash was also based in Silicon Valley in California, and they were providing, creating realtime traffic data on streets. And they were getting that data both from and sending it to mobile phones, of course. Like, that is when you would want traffic data, is when you have your mobile phone with you while you're driving. There was a giant market of only four Nextel phones at the time of the acquisition.

• 27:06Ben Gilbert?

  Dude, those had the sweet, like, walkie-talkie feature.

• 27:09David Rosenthal?

  Yeah, the push-to-connect. Oh, man. I never had one of those, but I always wanted it. Did you ever have one?

• 27:13Ben Gilbert?

  The commercials were great.

• 27:14David Rosenthal?

  The commercials were awesome. So, the Zipdash team, by far, you know, the most insignificant of the three of these acquisitions.

• 27:23Ben Gilbert?

  To this day, the where-to acquisition price is still undisclosed. It was a mix of cash and stock. That's the most we know, but I think it was less than 50 million. Like, I think it was a relatively small acquisition. I mean, great for four people, but...

• 27:38David Rosenthal?

  And I believe Keyhole was around 35 million, I think. I'm being sort of facetious about the total insignificance of the Zipdash acquisition because Google would, of course, stick them in this backwater thing that they would work on that nobody would care about, which would be the mobile version of Google Maps, which, of course, is now, like, by far, the, you know, 90-plus percent of the business and one of the most important applications in history. Back to the launch in February 2005 of Google Maps. The night before launch, it got slash dotted. Remember slash dot?

• 28:17Ben Gilbert?

  Oh, man. Yeah. That was like, uh, that was like getting Doug before Dig.

• 28:21David Rosenthal?

  I know, I know. So great. Are tech-memed now, or, you know?

• 28:25Ben Gilbert?

  I mean, it's still up. Like, you can, I think you can still, I don't know if there's traffic, but like... There's writers.

• 28:31David Rosenthal?

  Yeah, I know. I remember going to Slashdot like literally every day.

• 28:35Ben Gilbert?

  It looks the same. I mean, this is crazy.

• 28:37David Rosenthal?

  Oh, man. It's not even the Wayback Machine.

• 28:39Ben Gilbert?

  Yeah, like somebody published something this morning. This is like, it's still a news site.

• 28:44David Rosenthal?

  Wow. So Slashdot, of course, for listeners who don't remember or weren't alive, was sort of the tech meme equivalent. It was the user-generated and posted news site for technology back during this era. Getting slash-dotted, quote unquote, was if your application or service or product or what have you made it to the top of the Slashdot boards, you would get just a ton of traffic.

• 29:11Ben Gilbert?

  I'm reading the about. Slashdot was created in 1997 by Rob "Commander Taco" Maldah. I remember Commander Taco. He was like the username on all the posts.

• 29:20David Rosenthal?

  Yes. Oh, so great. People find out about this impending, well, not even relaunch of where to, because expedition was, I don't believe, ever launched publicly and it was desktop software. But the launch of Google Maps coming the night before, it gets slash-dotted with the URL of google.com/maps. And so when they launched the next day and announced the product, they just get a ton of traffic, ton of traffic. But that doesn't equate to immediate success for the product. And actually, according to Brett Taylor and many of the histories out there, for about a year, it was like, okay, it got some usage, but certain MapQuest and Yahoo Maps were, despite being obviously inferior in many ways,

• 30:03David Rosenthal?

  were still the leading products out there on the web. Over the next year, though, they do two things that are really important. One that is sort of like fundamental, that was starting to be well-known, and I feel like Google was way ahead of the curve, but now is like obvious, which is that they rewrote the app. It was really slow and they rewrote it for speed. So like, Google understood that speed of loading of webpages, search results, everything.

• 30:31Ben Gilbert?

  I mean, those were their primary value propositions for, for why Google won. Not only was it the best results, but it was the fastest.

• 30:37David Rosenthal?

  It was instant. And so they rewrote all of the software. They made Google Maps actually performant and, and fast. And that certainly helped a lot, and especially as the product scaled, helped a lot. Two, though, on the distribution and sort of stunt side, they added satellite imagery to Maps. And I vividly remember this, and the satellite imagery, they, the aerial imagery they took from the Google Earth team, from the Keyhole acquisition, and they, they were able to bring it into Maps and the web application. And so when this launched, people, it was such a novelty. And I remember doing this. I remember my parents doing this. Everybody would go find their home.

• 31:14Ben Gilbert?

  Gonna find my house.

• 31:15David Rosenthal?

  Go find my house and view it from a satellite. And that was like the key thing that like made sort of like this estimate for Zillow that like it got mainstream people using this. Yeah.

• 31:26Ben Gilbert?

  It was like you were like, I saw this in a movie. Only the government can do this, and now I can do it too.

• 31:30David Rosenthal?

  Yeah, yeah. And there's a super, super fun story from Bret Taylor that he posted on Twitter that we'll, we'll link to about naming this product feature, which of course is, as we all know now, called Satellite View. When they were working on it, the Maps team called it Satellite View. But apparently the Earth team got really upset about this because some of the images were from satellites.

• 31:56Ben Gilbert?

  Right, but some were from helicopters.

• 31:58David Rosenthal?

  Yeah, were actually aerial from planes and helicopters. And so there was this kind of like holy war between the engineering teams about, you can't call it Satellite View. It's like, most of it's from planes.

• 32:10David Rosenthal?

  And, and so they ended up having a, a product review. And one of the product reviews before the feature shipped with Sergey Brin is in the, in the product review where they like, on the agenda was to finalize the name of this feature. And apparently, in typical Larry and Sergey fashion, and especially Sergey, they were always doing, you know, nutty stuff. And Sergey was on this kick that every meeting had to end on time. Every meeting he went to, he brought like a timer, like a countdown clock, and he would hit the countdown. Clock at the beginning of the meeting for, you know, 45 minutes or an hour or however long it was. And then when the clock reached zero, he got up and walked out, meeting was over. And whatever like decisions needed to be made, the current state of where things stood,

• 32:52David Rosenthal?

  that was the decision. So they're in this meeting and debating what to call it. And everybody's throwing out different names and Sergey's mostly in listen mode. And then the clock hits like 10 seconds and Sergey says, let's call it bird mode. And then the buzzer like goes off and he walks out and everybody's looking around and they're like, are we really gonna call this bird mode?

• 33:17David Rosenthal?

  So according to Brett, the the maps team goes back to work on it and they're really debating, like, we can't call this bird mode. That's ridiculous. And so they decide just not to do it. And they just leave the satellite mode, you know, name in there. And then they shipped the feature and nobody asked them ever again. And so they literally defied Sergey and they just did it. And now satellite mode that we all know and love is satellite mode.

• 33:42Ben Gilbert?

  This reminds me, meanwhile, Microsoft shipped the org chart. I remember, I don't know what it looks like today, but I remember in Bing Maps for the longest time, there was both satellite, which was truly from satellites. But then there was also like, I don't know if they called it bird's eye or they called it helicopters, but aerial perspective or something like that. And this was actually the helicopter shots, which for nerds was pretty cool. Because then what you could do is they crisscrossed in the sky, like north to south, south to north, east to west, west to east. And you could actually rotate the perspective that you were viewing. And it wasn't like at a 45 degree angle, it was maybe like a 20 degree angle or something. But you could actually like, sort of see

• 34:23Ben Gilbert?

  what it looked like viewing, not directly down, but sort of like slightly at an angle down.

• 34:28David Rosenthal?

  I remember when they did this.

• 34:29Ben Gilbert?

  Yeah. I remember like, I'm like, this is cool. But like, is this useful at all?

• 34:36David Rosenthal?

  Right. And why would you have two different views for this?

• 34:39Ben Gilbert?

  Yeah. But sure enough, I looked at my house and I looked at it from all four angles. And I was like, this is pretty cool.

• 34:46David Rosenthal?

  That's pretty well. Well, uh, to be back in the mid 2000s. So by 2006, uh, once all these features had shipped, Google takes over MapQuest and Yahoo and becomes the largest internet mapping destination and provider in the world. In mid 2006, they release the Maps API. And this was another like watershed moment in web 2.0 development is developers go nuts with access to the Maps at Google Maps API and they start creating mashups. Do you remember mashups, Ben?

• 35:22Ben Gilbert?

  No.

• 35:22David Rosenthal?

  Oh, Google Maps mashups were such a thing. It was like the tech world meme of, you know, 2006 to 2009. All sorts of applications get built showing, you know, overlaying, uh, crime data or, you know, any points of interest data or whatever. People are just like taking the underlying maps and the dynamic nature of it, embedding it in their webpages, layering data over it. Super cool stuff gets built. Uh, my favorite was, do you remember Padmapper? Did you ever use that?

• 35:51Ben Gilbert?

  Oh yeah, for sure.

• 35:52David Rosenthal?

  Yeah. So Padmapper is a Google Maps mashup.

• 35:55Ben Gilbert?

  Yeah, that makes sense. I mean, that's how I found an apartment that way, like until at least Craigslist got all huffy and shut them down for scraping.

• 36:03David Rosenthal?

  Yeah. And this was, I mean, this is, uh, fun stories here, but like this, this release of the API, the developer interest in mashups and people starting to do this, this leads to things like Trulia, things like Zillow, things like Uber. You know, none of this would be possible without the Google Maps API.

• 36:22Ben Gilbert?

  Which for a while, we should say was free. It was a maybe a Google growth strategy, but maybe just Google saying like, we love making things that make the web better. And so if you want to use Google Maps for your own thing, it's, it's free. And then if you're really using it a lot, it's pretty cheap. Until recently.

• 36:39David Rosenthal?

  And I remember I worked for a year at the Wall Street Journal after investment banking and before moving to Madrona and getting into venture capital. And during that year, we started doing a bunch of mashups and work with Google on the, with Maps. And we spent a ton of time with the Maps biz dev team trying to figure out how we, you know, could we use this for free? Did we have to pay for it? How much did we have to pay for it? Also, it took Google a little while to figure this out. I think they've got a pretty good business model now.

• 37:09Ben Gilbert?

  Also, listeners, a quick update on my last comment. I'm on Bing Maps right now. They no longer have the, they have an aerial feature, but it is effectively satellite view and there is not a way to rotate around your favorite buildings in four slightly different angles.

• 37:24David Rosenthal?

  Oh, sad.

• 37:26David Rosenthal?

  There's just one problem with all of this, though. This might actually be, I bet this is why it took so long for Google to fully iron out the API business model, which is that Google and Google Maps were completely dependent on mapping data from other data providers and satellite companies, the two largest of which were Tele Atlas and Navtech. And in 2007, both of those companies got acquired. I may mix this up, but I think Navtech got acquired by Nokia and Tele Atlas got acquired by TomTom. It may be the other way around, but they were both fairly large acquisitions and they had a duopoly on satellite map and navigation data providing.

• 38:07David Rosenthal?

  And so they would sell their data and images to all the car companies that were putting GPS and maps into screens in their vehicles. They would sell to Garmin. They would sell, TomTom obviously was making their own standalone GPS devices. And they would sell to MapQuest and Yahoo Maps and Google Maps. So Google knows that this is a dependency that they're not too excited about. Also, in early 2007, Larry and Sergey are back on the Stanford campus, where of course they were PhD students and Google was started. And they meet up with someone who I assume they knew and were friends with, who was computer science professor Sebastian Thrun, who at the time was a computer science professor at Stanford.

• 38:51David Rosenthal?

  And he was running two really important projects. One was SAIL, the Stanford Artificial Intelligence Laboratory. And two was the Stanford's team in the DARPA challenge. And He and Stanford's team had just won the 2005 DARPA Challenge. The DARPA Challenge, of course, was the challenge to create an autonomous vehicle that could navigate a preset out course and terrain in the desert. And so Sebastian and his lab were like at the forefront of all of the things that would go into ultimately autonomous vehicles. But a huge component of that is mapping, navigation data, all of these things.

• 39:33David Rosenthal?

  Sebastian told Larry and Sergey that he is actually in the process of, with a bunch of his grad students, starting a startup to work on one aspect of this. It was going to be called Vutool, V U T O O L. Great, really great product name. And they had a crazy idea that they were going, based on their work in the DARPA Challenge, they knew all these things that were important. They were going to drive around the streets of America with cars driven by human drivers, but with big cameras on top. And they were going to use these cameras to take pictures of everything. And A, that was going to have pictures of everything, but B, it was going to be data that was going to be incredibly useful for this future of navigation and autonomous vehicles and all of that.

• 40:14Ben Gilbert?

  Which was not a thing that the public was in any way talking about. That was five years out.

• 40:19David Rosenthal?

  I mean, I remember the DARPA Challenge from back when I was in school at Princeton at the same time. We had a DARPA Challenge team. I mean, all the major universities did. So it was something that like academics and engineers were thinking about, but just nowhere near mainstream.

• 40:34Ben Gilbert?

  But it was like 2012, 2013, before the tech community started getting buzzy about, ooh, autonomous vehicles might be a thing sometime soon.

• 40:43David Rosenthal?

  Yeah, it was totally in science project territory. You could argue maybe it is still in science project territory, but it definitely was then. So Larry and Sergey, they hear all this from Sebastian. And of course, they know on their minds is this dependency problem on Tele Atlas and Navtech. And they say, we're going to buy you immediately. So they do. And of course, this turns into Google Street View. But Street View itself, as we were talking about, was never the only goal of the project. Although Street View was super cool and it was a whole nother round of just like when there was satellite imagery.

• 41:18Ben Gilbert?

  I went and looked at my house.

• 41:19David Rosenthal?

  Everybody goes and looks at their house.

• 41:22David Rosenthal?

  But so it was great marketing for Google Maps. Using that data, Google starts internally a project called Ground Truth. And this is led by Megan Quinn, who was a product manager at Google at the time. She would go on to Square and then Kleiner Perkins. And now she's a GP at Spark Capital and an investor and board member at Rover.com. One of the many illustrious Google Maps PM alumni. So she leads this project. And what they're doing with all the engineering talent at Google is basically taking the data and the images from the street view cars and using that and interpolating it in ways such that they can get everything they need from that. And they don't need to buy Tele Atlas and Navtech data anymore.

• 42:05Ben Gilbert?

  Talk about another unique and amazing technology problem to solve is we're going to take, you know, these, whatever it is, nine cameras or something that are mounted in this crazy way on top of this car that are all taking these still images. And of course, like there's the difficult thing of stitching them together nicely for street view, but we're going to be able to extrapolate structured data that serves to create our maps.

• 42:28David Rosenthal?

  Yeah.

• 42:29Ben Gilbert?

  By taking these lat-long coordinates from the moment that these pictures were taken and all these pictures and actually derive map data from that. Freaking amazing.

• 42:37David Rosenthal?

  Incredible engineering project. It takes a little bit of time, as you would imagine, but they have to drive their cars around all of America to get it. But by October 2009, so they acquire V tool in, in 2007, early 2007. Back to 2009, Google boots out Navtech and Tele Atlas and they are officially only using their own Google data for maps. And that then, and I think it was right around then, and now that I'm remembering, this is when I was at the Wall Street Journal, it was right around then that they open up the business side of the Google Maps API and they start charging to license out the Maps API.

• 43:18Ben Gilbert?

  Continuing Ben's quest of playing with mapping software in real time while doing the episode, there's a really cool feature you can do because, you know, these cars are still actively driving around all over the place capturing all this data, where you can actually in street view, go and change the year that you are looking at. So in the top left corner, if you hover over the little clock, you can adjust, I'm on Mercer right now in Seattle, you can adjust from 2015 to 2019. And even in those few years, it's crazy to watch how much the city gets built up and how much that road changes. And I think on average, roads tend to have four or five years of historical data there. But

• 43:59Ben Gilbert?

  it is like the coolest thing to go in this time machine and look at what they captured today versus what they captured over, let's see, I can go back to 2014 over here. And it's, it's wild to watch the change over time.

• 44:11David Rosenthal?

  Wow. I didn't know you could do that. That's really cool.

• 44:14Ben Gilbert?

  I found it in a deep, way too much time on the internet, Google Images click around session.

• 44:23David Rosenthal?

  Okay, so apologies for the multiple jumps around in timeline here, but as recently, Google Maps, like this becomes such a foundational product and technology to so many things. And of course, I'm sure what is on everybody's minds and people probably remember going back to the ZipDash acquisition is mobile. What's going on with mobile for Google Maps? So let's, let's go back again to 2007, 2007, great year, year I graduated from college. But it was also, what else did happen in 2007? It was the year of the

• 44:55Ben Gilbert?

  iPhone.

• 44:55David Rosenthal?

  Yeah. Remember it was called the Jesus phone?

• 44:59Ben Gilbert?

  I do.

• 45:00David Rosenthal?

  Oh my goodness. I mean, if any phone was a Jesus phone, it was the iPhone. People probably remember when the iPhone shipped, there were no third party applications on it. Everything was built by Apple, but there were two apps that weren't entirely built by Apple and did have third party backends. And those were Maps powered by Google Maps and YouTube powered by YouTube.

• 45:25Ben Gilbert?

  And those beautifully skew-morphic images like YouTube was that old TV.

• 45:30David Rosenthal?

  I know, I know. Oh, man. Well, we're gonna be, we're gonna be talking about Mr. Forrestal in a minute here. This must have been in 2006. By this time, John Henke of Niantic fame had become the VP of the Geo Group. And so he, both Earth and Maps were reporting up to him. And so one day, according to him, he's at his desk at Google, and the phone rings, and he picks it up, and it's Steve Jobs, just like the Trip episode, the EA episode with Trip Hawkins. Steve just like, oh man, so many episodes of Steve calling people on acquired. And so, so this is a quote from, from John. He says, "Steve Jobs called me at my desk to ask me to help out on a project. He wouldn't tell me what it was, but of course I knew.

• 46:11David Rosenthal?

  We worked closely with Apple to get Maps ready for the launch of the first iPhone, which opened up so many possibilities." So at iPhone launch, when Steve Jobs announces it on stage in January 2007, like we said, Maps and YouTube are the only third-party apps on the iPhone, except they're not really. So what happened was, they work closely with Google and YouTube on these, but it's actually Apple engineers and Apple designers that are building the apps based on the backends and the APIs from Google. So Google has no control.

• 46:42Ben Gilbert?

  Think about that time, like how there was no iPhone SDK. Everything was, there was no separation between being a platform engineer and being an application engineer as far as iPhone OS went. So of course it had to be Apple engineers because like, there were no like APIs that were optimized for performance. You were writing like directly, interfacing at a very direct level. And you had to be very careful that you weren't doing anything that would, you know, just cause the app to crash every time or worse, you know, something the operating system level.

• 47:13David Rosenthal?

  We'll have to see if we can find and link to in the show notes, there's great, great retrospectives and histories with people, I think on the 10th anniversary of the iPhone, talking about how duct tape it all was together in the first version.

• 47:24Ben Gilbert?

  Especially that demo, that onstage demo where it was actually like three different phones that were used during the course of it because it couldn't all work on the same phone.

• 47:32David Rosenthal?

  Yeah, and they choreographed the entire thing like if Steve touched one thing at the wrong time or went off script, like the whole demo would crash. Anyway, so Apple is controlling everything about the UI of Maps on the phone. Google's just providing the data. But of course, Google is also working on the smartphone of operating system of their own in Android, which they acquired in 2005. 2005 was a big, 4 or 5 was a big time of acquisitions for Google. We've of course covered that on our Android episode. So then in 2008, when Android launches, of course, it has Maps and Google Maps on it. And then when they update it in 2009, the next year with Android 2.0, Google adds turn-by-turn navigation to Maps-

• 48:17Ben Gilbert?

  Who needs your TomTom anymore?

• 48:19David Rosenthal?

  On Android. And this is huge. I mean, people knew at the time, this was like the death knell of Garmin and TomTom and Navtech and all of these companies. Like they, I didn't go back and look it up, but I think their stocks dropped to like, like 30% on the day of announcement and they're, you know, worthless now.

• 48:36Ben Gilbert?

  Meanwhile, though, like Google Maps for the iPhone, you just see your blue dot. You know where you are. You can get a list of directions, but like you can't get anything live.

• 48:45David Rosenthal?

  Yeah. Remember tapping through like, oh, I've made this turn now. Now I'm going to tap and I'm going to go look what the next one is.

• 48:50Ben Gilbert?

  I'm going to tell the phone that I have moved.

• 48:53David Rosenthal?

  Barbaric. Who knows what was going on in discussions between the two companies? You could paint a picture where Google wanted to add turn-by-turn navigations to Maps on the iPhone, but they couldn't because they didn't control the UI. But then as the two companies start fighting over the smartphone wars in this era, the turn-by-turn navigation is a killer, killer feature for Android. There were turn-by-turn apps available on the App Store for iOS, but they were like $50 or $100 that you had to pay. Remember that?

• 49:24Ben Gilbert?

  Right. Yeah. Because I think TomTom had one of them.

• 49:28David Rosenthal?

  Uh, yes, Tom Tom did. Maybe Garmin, too. We talked about this on the ways episode, which we'll refer to in a minute as all of this is deteriorating. Also, I have in my notes here, remember when Microsoft bought Nokia as part of this?

• 49:42Ben Gilbert?

  Oh, my goodness.

• 49:44David Rosenthal?

  An era best forgotten in time.

• 49:47Ben Gilbert?

  That was just like an arbitrary dig. Like you just dug that out of nowhere.

• 49:51David Rosenthal?

  I know. Well, I just, you know, we haven't talked about it on acquired yet. And I feel like it had to come up at some point in time. Time marches on. We get to 2012. It's dub dub WWDC and rumors are swirling that Apple is going to make a major move in the wars with Android. They're going to release iOS 6, a major update. And the marquee feature is they are booting out Google. They are launching their own mapping service, Apple Maps. It's going to be insanely great. And who comes out on stage to introduce it?

• 50:28Ben Gilbert?

  Scott Forstall.

• 50:29David Rosenthal?

  Scott Forstall. And we won't be hard to, I mean, it's so hard to build a mapping service. I mean, I think.

• 50:37Ben Gilbert?

  Well, and especially one where you're starting 10 years after the, the, your competitor.

• 50:42David Rosenthal?

  Yeah. I mean, not quite 10, but, but everything we've talked about on this episode from where to to keyhole to zip dash, all the work internally to street view and food tool, all of this over the years, they, all this engineering that Google has put into maps. And Apple, I don't know how long they were working on Apple Maps internally.

• 51:04Ben Gilbert?

  I'm sure a couple of years, like, and I'm sure that they realized it was a huge thing and they, I mean, they had cars driving around. People sort of were posting pictures on macrumors.com of the Apple cars driving around. Like it was, they were, they were definitely putting in a huge amount of money and effort.

• 51:20David Rosenthal?

  But in the meantime, Google was doing not only all this engineering, but they had billions of people. Well, probably hundreds of millions of people at this point in time, using their services and getting all that data back from them. And so when Apple Maps finally ships in September 2012, with the release of iOS 6, Google Maps is gone. So Google's completely booted out. You cannot get Google Maps on the iPhone anymore. Your only option is Apple Maps or a third party application of which Google is not on there.

• 51:49Ben Gilbert?

  And Apple Maps did have turn by turn.

• 51:52David Rosenthal?

  Apple Maps did have turn-by-turn, but if you followed the turn-by-turn directions, you might not necessarily end up where you wanted to go.

• 51:59Ben Gilbert?

  It reminds me of that episode of The Office where Michael drives into the lake.

• 52:03David Rosenthal?

  Yeah.

• 52:04Ben Gilbert?

  The machine says.

• 52:05David Rosenthal?

  Oh, totally. And that, I mean, there were stories of this happening all over the world. And the only thing worse than not having turn-by-turn navigation on your map app on your phone is having turn-by-turn navigation that sends you to the wrong place. Within days of this happening, and we covered this on the Waze episode, Apple apologizes. Letter from Tim Cook.

• 52:28Ben Gilbert?

  Letter from Tim Cook, not from.

• 52:29David Rosenthal?

  Not from Scott Forstall.

• 52:30Ben Gilbert?

  Scott Forstall.

• 52:31David Rosenthal?

  The.

• 52:32Ben Gilbert?

  The writing was on the wall there.

• 52:33David Rosenthal?

  Yeah. Yeah. The writing was on the wall there. Quickly, Scott is, and skewomorphism in total is is removed from Apple. And as part of the letter, Tim says, we recognize this is unacceptable. We are working to make Apple Maps better. Here is a list of third-party applications that you can get in the App Store that are alternative mapping applications to use in the meantime. One of those that he lists is Waze. And of course, we covered this on our Waze episode, which everybody can go listen to for the history there. What everybody wants is Google Maps. Google Maps is the best.

• 53:06Ben Gilbert?

  Yeah, they hadn't done the rewrite for iOS yet.

• 53:08David Rosenthal?

  They had not. So it was, remember, Google was kind of caught flat-footed here. There was no team internally that had built Google Maps for iOS. So amazingly, quickly, again, this was September 2012 when this happened. On December 12th, 2012, so three months later, Google ships a third-party application to the App Store of Google Maps. And it's incredible.

• 53:33Ben Gilbert?

  It's amazing. It's so good.

• 53:36David Rosenthal?

  It's so good. It is complete feature parity with Android Google Maps, including turn-by-turn navigation. In many ways, people think it was, at the time, better designed, better looking, better flow. And within two days, it is installed on over 10 million iOS devices. It is like a tall, cool drink of water in a desert.

• 53:59Ben Gilbert?

  So two quick personal stories on this. One, I remember like the halls of Office for iPad or the Apex team at Microsoft were abuzz when this came out because everyone's downloading it. Everyone's analyzing their user interface paradigms. This was the first time that Google had really nailed that trade off of distinctively Google, but sensibly iOS. And it was their sort of first of many really great iOS apps that felt googly, but also felt iPhone-y. All of us were sort of like tearing it apart and trying to understand, you know, what should we be taking cues from this in Office for iPad? The second fun personal story there is the team that built that app was actually Kirkland based. It was Google Kirkland.

• 54:44Ben Gilbert?

  It was a small team. I remember there was four core people on the team and I went to a presentation by them on how we built Google Maps for iOS like three months after they launched it. They basically said like, look, the whole API surface is already written for Android. Like, we just needed to be really good iOS engineers and connect to the right services. Like, not that it wasn't that hard, but like, it actually was architected really nicely for us to just sort of make an iPhone app that, you know, we just had to be Objective C experts. It really shows the power of all the work that Google had done to this point that just in a few months there, they could make something really nice.

• 55:19David Rosenthal?

  Two things to pull forward from playbook and maybe we can mention them again then, but to talk about them in the moment. One, I think all of this episode just highlights, people talk about Google being an engineering-driven organization and having incredible engineering resources and talent. And like, this is it. I mean, better than anyone else on the planet. Nobody else could do this. Everything that they did with Maps over the now 15 years that it's been around, the incredibly architected backend and API surface such that within three months... A team that is an incredibly talented team can build one of the best iOS applications in the world at that time and use this API backend and not need to worry about it and then ship it to the App Store and now Google Maps is

• 56:03David Rosenthal?

  one of the most downloaded and installed iOS apps of all time. Pretty incredible.

• 56:08Ben Gilbert?

  Yeah. I also remember one big thing that made it so good was when it was still the Apple version, Apple's app was connecting to an older backend that used the static tiles and had to re-download new tiles for whatever your sort of zoom level was. Whereas when Google regained control over the front end by being able to ship their own app, they could connect to their V2.0 or whatever it was APIs that actually had the vector maps. So that suddenly the, all the scrolling was much smoother and zooming. And actually, this is when they introduced that gesture. And for anybody who hasn't used this, if you don't use this and you're learning this from me for the first time, this is going to blow your mind to make your life better. Instead of pinching on Google Maps, you can actually double tap and then

• 56:53Ben Gilbert?

  move your thumb up or down to change your scroll level. So you can use zoom one-handed by just holding your phone instead of holding it with one hand and pinching with the other hand.

• 57:04David Rosenthal?

  Oh, that's awesome. I did know that, but I'd forgotten that. It's huge. That's huge.

• 57:09Ben Gilbert?

  Life changing here on Acquired.

• 57:10David Rosenthal?

  Changing. So we're going to end History and Facts here. Definitely go check out our Waze episode, our Android episode to hear more of the history around this. And Waze especially kind of picks things up from here because Google, a couple of months after this, Waze gets a huge traffic boost and download boost from Tim Cook's letter where Waze is one of the applications he recommends. And rumors start swirling that Apple's going to now buy Waze to fix their mapping problem. Then the rumors start swirling that Facebook is going to buy Waze because they want to be a, you know, internet portal too and have a mapping solution for some reason. Ends up Google buys Waze for $1.3 billion in June of 2013. And then progress

• 57:51David Rosenthal?

  marches on till today. One last little coda before we leave the history and move on to acquisition category. I think this was a One of our carve outs on the Zappos episode with Alfred Lin, Justin O'Beirne did three wonderful, wonderful, long form blog posts in the last couple of years comparing the development of Apple and Google Maps over the last, over the last few years. We'll link to them in the show notes. If you're really into all the technical aspects and like detailed minutia of mapping and business models around this, go read Justin's post. They're really, really great.

• 58:28Ben Gilbert?

  I've got a couple of fun catch ups from this story to today. The first is, what did the Rasmussen's do at Google after moving on from Maps?

• 58:38David Rosenthal?

  I know the answer to this. Well, the real question is, do you know what Lars went and did after this? But of course, what they go and do is-

• 58:47Ben Gilbert?

  Google Wave.

• 58:48David Rosenthal?

  Google Wave. I remember when that was launched.

• 58:52Ben Gilbert?

  I was so hype on that. I watched Lars' livestream of like, here is the platform that's going to change the freaking world.

• 58:59David Rosenthal?

  It was super cool. I mean, the crazy thing, like, one of the main meta themes on acquired that we keep talking about is like, the tech world is a small place. Old ideas are new again. Everything comes around. They were right. Like, they were completely right on the need for this. And the need for it, the product that met that need was Slack. It was not Google Wave.

• 59:19Ben Gilbert?

  Sort of. It was like Slack plus Notion, because it was also-

• 59:22David Rosenthal?

  Yeah, that's true.

• 59:23Ben Gilbert?

  It was like a document surface in addition to being chat.

• 59:26David Rosenthal?

  That's true. That's true. And so, you know, it'd be interesting to think about, like, was it just that the timing was wrong? Was it that they got the product wrong of trying to be Slack plus Notion all in one product? We'll never know necessarily, but yeah, Google Wave. So then, do you know what Lars went and did after Google Wave?

• 59:42Ben Gilbert?

  I know the company that he started, that he's running now, that-

• 59:46David Rosenthal?

  But before that?

• 59:47Ben Gilbert?

  Ooh, I do not.

• 59:48David Rosenthal?

  He went to Facebook. I don't know if he conceived of and launched, but he was a key executive on Facebook for work, which is Facebook's attempt to, to compete with, to compete with Slack, be in this market.

• 1:00:04Ben Gilbert?

  Which we have heard from listeners. I think we, we may have denigrated Facebook for work in the past. And we've heard from some listeners that they really like it, and that it's rolled out at scale inside their organization. So that's definitely a quietly large and successful product.

• 1:00:19David Rosenthal?

  Yeah, within Facebook. So, yeah, super fun.

• 1:00:21Ben Gilbert?

  Lars' new company is called weave.io. Weave, not to be confused with Wave. And it is a like musical BPM syncing service that their first thing is a running app that I'm excited to try out.

• 1:00:34David Rosenthal?

  Yeah, yeah, well, you've been doing a lot of running lately.

• 1:00:36Ben Gilbert?

  It's true. And then one last update, the fourth co-founder of Where2, Noel Gordon, is the only one of the four who is still working at Google. So their fourth co-founder retired a few years ago. The Rasmussen's obviously are gone, but Noel Gordon is still a Googler.

• 1:00:54David Rosenthal?

  Wow, incredible, 15 years later.

• 1:00:57Ben Gilbert?

  Yep. All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, Logora, the Agentic operating system that is redefining how the world's best legal teams work.

• 1:01:11David Rosenthal?

  Yep, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Logora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry?

• 1:01:27Ben Gilbert?

  So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done.

• 1:01:42David Rosenthal?

  And that's how you get features that customers love, like Tabular Review, where you drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Logora's bet here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

• 1:02:06Ben Gilbert?

  And they recently launched Logora Agent, offering greater intelligence and performance. The agent lets lawyers set an objective, then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required.

• 1:02:25David Rosenthal?

  And Logora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Logora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Logora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries. And crazily, they went from 1 million to 100 million in ARR in about 18 months.

• 1:02:55Ben Gilbert?

  Truly insane numbers. And that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at logora.com/acquired and just tell them that Ben and David sent you.

• 1:03:20David Rosenthal?

  Well, should we move on to acquisition category?

• 1:03:23Ben Gilbert?

  Yep, let's do it. I think it's a technology acquisition with where to. Walking through this, listeners, this is where we select whether the acquisition was primarily done, or the main value that was acquired was people, technology, product, a business line, asset, which is what we decided that wave, I'm sorry, that Waze was, since it was sort of the data that Waze contained and the data that would be generated on an ongoing basis in the future. Or other, which gives us the ability to come up with new stuff every episode if we want to. But I think this is pretty squarely a technology acquisition that they transitioned into launching their own product.

• 1:04:02David Rosenthal?

  Yeah, that makes sense. I mean, you could make an argument for product, but it wasn't like it was Google Maps. They launched its status, Google Maps. Like, it really, like, a lot of the work and building was done within Google. And it was the technology that they acquired that led to this.

• 1:04:19Ben Gilbert?

  All right, what would have happened otherwise?

• 1:04:22David Rosenthal?

  Oh, man. That's a really good question. Like,

• 1:04:25Ben Gilbert?

  Could Google have done this internally without buying Where2? And would it have been successful if they did without the Rasmussen's and the rest of the Where2 team?

• 1:04:36David Rosenthal?

  Hank Ian and Keyhole and Zipdash. Maybe, I mean, maybe, maybe they would have gotten there internally eventually, but there was so many other things going on at Google at this point in time. The IPO, obviously Gmail, everything that was happening then, all the YouTube, which of course they acquired Docs. They certainly wouldn't have moved as fast. And then you think about V tool and acquiring that and Street Maps. Of course, what we didn't talk about then is Sebastian Thrun goes on, just like all of these alumni to do so many amazing things. Founded Udacity, started Google X within Google, and then of course Waymo and that whole division and Google's autonomous card division comes out of that.

• 1:05:19David Rosenthal?

  We're really throwing rocks on this episode, but I don't think Yahoo would have come up with all of this.

• 1:05:24Ben Gilbert?

  There wasn't a logical other acquirer for them. I mean, Facebook was too early and apparently made some decision that they didn't care about owning Maps at some point. I think they use Bing Maps as their, their solution now.

• 1:05:34David Rosenthal?

  I remember that.

• 1:05:36Ben Gilbert?

  You know, Apple was almost a decade away from doing anything here. If they were going to sell the company to someone, it was probably going to be either Google or a legacy player. And then I guess the other what would have happened otherwise is what if they had raised the Sequoia money? And what if the timing had been different by, you know, just enough so that they actually could close the deal? This is actually a good question. Did Where2 need Google in order to be a successful mapping product? Or could Where2 have been its own thing?

• 1:06:08David Rosenthal?

  Because if this were playing out today, Where2 would have raised 100, SoftBank would have invested hundreds of millions of dollars in this company.

• 1:06:17Ben Gilbert?

  I mean, Mapbox, like literally SoftBank invested 300 million in Mapbox.

• 1:06:21David Rosenthal?

  Yeah. Yeah. So we have to go back to what was happening at the time. I don't think this could have been an independent company. I actually agree with.

• 1:06:30Ben Gilbert?

  Did they need Google for distribution?

• 1:06:34David Rosenthal?

  Maybe, maybe not, but I agree with Sequoia's decision to ultimately pass because maybe they could have gotten distribution on their own. Certainly Flickr did, certainly YouTube did, although both of those companies sold and sold way too early, but they could have been built as standalone companies. I think the problem here was the reliance on Navtech and Tele Atlas data. Like if you're an independent startup, are you going to be able to negotiate with them, get rates, especially since users are not going to pay for the product? Like it has to be a free product because MapQuest and Yahoo Maps is free. So you're not going to have a business model. You're going to have to license all of this super expensive data and the business model, the ingenious business model that Google ends up developing

• 1:07:19David Rosenthal?

  of the API here, that you can't really monetize until you free yourself from that data and you can't free yourself from that data.

• 1:07:26Ben Gilbert?

  You think that's the business model?

• 1:07:27David Rosenthal?

  Well, there's multiple businesses. So yes, certainly local advertising is the primary business model, but you're going to be hamstrung by that. And I think that would just be, at the time, have been really hard to do as an independent company because there was no way, even if you went public, you couldn't raise the amount of money that companies can raise now. And so they just wouldn't have had the access to capital to do this.

• 1:07:47Ben Gilbert?

  Google has run this in the red for at least 10 years, maybe more. There's no way that they would have had the leeway to do that as a private company in that era. I mean, and when I say in the red, like way in the red, like you think about the operational costs of driving all these vans around or paying someone else for that data, which wouldn't have been as good as the data that data asset that Google has built up.

• 1:08:08David Rosenthal?

  Yeah. And back to satellite for a minute. In 2014, Google acquired Skybox Imaging, which is a satellite company. So Google is now owning, operating and launching satellites into space to do all this. Could a mid 2000 startup have done this all independently? Hard to imagine.

• 1:08:26Ben Gilbert?

  Thank you. Right.

• 1:08:28David Rosenthal?

  All right. Should we move into playbook?

• 1:08:29Ben Gilbert?

  Yep, let's do it. So it's been a while since we did a classic acquired episode of analyzing a big company that bought a small company and then grading if that was a good use of capital or not from A to F. So I went back and cloned an old script. And my old one said tech themes, which of course we now call the playbook now because I think when we used to do this section, we were just sort of obsessed with abstractly, what tech themes are there here? And we've definitely become more interested in what are the learnings from the actions that Google took and where to took here that we can sort of extrapolate to use in future investments, companies we start, companies we work at. And so here I have playbook formerly known as tech themes.

• 1:09:14David Rosenthal?

  Love it.

• 1:09:14Ben Gilbert?

  The biggest thing that I'm taking away here is that Jens saw the future that there could be a geo-visualized search results page. And this is an important distinction from turn-by-turn directions with a map. If you have a rich canvas map and it's a full experience, and in the future, screens will get better and speeds will get better and all the technology will get better, a map is actually a great platform interface for other things, particularly search. And I think it's important to think about that

• 1:09:56Ben Gilbert?

  when considering startup or product ideas, really sitting in the nuance of this is not a direct competitor to MapQuest. This has the potential to be something very different because we're going to build it in such a way where it can be so much more than what MapQuest is.

• 1:10:11David Rosenthal?

  Yeah, there's two thoughts on that. One, just the power of the interface, it's not just search, it's not just Google Maps, it's Uber, it's DoorDash, it's Zillow. Like, none of these businesses would exist without Google Maps and without this user interface paradigm. The other thing that reminds me of is I'm trying to remember who said this to me. I think it might have been Kurt Delbany, back, former, way early days acquired guest, former venture partner at Majona when we were all there, and now had a strategy at Microsoft. We were looking at a company, and I remember him saying to me, like, It's very rare that you find an idea, a product or a company or an idea, think about

• 1:10:56David Rosenthal?

  it in terms of an idea, that the more you think about it, the bigger it gets. And this is one of those ideas. Like, they're extremely, extremely rare, and they often come in camouflage. But when you find them, that's the time to go big. And at this moment in time, as we were saying, there was no way to go big as an independent company. The only way to really do this was part of Google. Maybe Microsoft could have bought them or something, but really, Google was the natural fit here.

• 1:11:27Ben Gilbert?

  At this time, exactly.

• 1:11:29David Rosenthal?

  At this time, yeah. Today, if you find yourself with an idea like this, well, the first trick, and this is actually a big part of our jobs as venture capitalists, is like, everybody might think they have an idea like this, but are you really, really intellectually honest with yourself? And can people around you evaluate whether this truly is an idea of this category, of which 99.9% of ideas are not? But if you do have that, today, you can build it as an independent company. And today, you can become an enormous, enormous platform in and of yourself. And I think this really is, everything comes back to SoftBank. But for all the funny hijinks around SoftBank, and we will cover many of them in our coming

• 1:12:12David Rosenthal?

  WeWork IPO episode, I think this is the thesis, that with ideas like this, you can now fund them and build large, independent companies and not have to be YouTube and sell to Google for a billion dollars.

• 1:12:25Ben Gilbert?

  It's a good point. I think, I don't remember if we talked about it on the show or not, but I feel like you and I had a conversation four or five years ago. And I remember having this conversation a lot and saying, machine learning is becoming equivalent with software. In the way that in the early 2000s, you said, we're software. In the late 2000s, you said, we're an internet company. In the early 2010s, you say, we're a machine learning company. Like, it's table stakes to build a technology product, especially a large-scale one, is to use machine learning in some way. And I remember having this fear, and definitely, we both talked about this, that startup innovation was capped because the big companies had all the data.

• 1:13:10Ben Gilbert?

  And the best products were going to be built by Google and Facebook, not because they had the most money, but also that, but because they had the most data. Exactly your point, for all the hijinks and criticism of SoftBank, it enables this way to flank that and says, okay, yeah, but what if you had half a billion dollars?

• 1:13:30David Rosenthal?

  Yeah. Or what if, you know, you're DoorDash, like, what if you have like three or four billion dollars? Like, how about that? Can you compete?

• 1:13:38Ben Gilbert?

  It does actually, in a world where data moats have become incredibly important, it does actually allow for startups to continue to have the ability to compete with these big companies.

• 1:13:50David Rosenthal?

  Yeah, yeah. Well, so this is, you know, at the risk of being too waxing poetic here, which you could definitely accuse us of unacquired all the time, but to zoom way out here, I think it's really cool. Like, we started this show in 2015, so we've been doing it for four years now. And I think we've like witnessed, and this show has been chronicled, all the changes that have happened of exactly what we're talking about. And it's like, when we started, we were focused on acquisitions, and acquisitions that actually went well, and then acquisitions. And that was, you know, still at that time, people thought, you know, people were thinking about, yeah, you can build big independent companies.

• 1:14:32David Rosenthal?

  Of course, Facebook did and whatnot, but like, as VCs and as founders, you were still like, you know, yeah, I could build something. I could get that half a billion, billion-dollar acquisition. And the whole venture landscape was optimized around that. You know, most funds, most quote unquote, early-stage funds were in the 200 to, you know, maybe at the outsized 500 million dollar fund size. And so a billion-dollar acquisition of a portfolio company, that really was meaningful. But today, that's really completely changed. And so as you see on the show-

• 1:15:03Ben Gilbert?

  And to really dig into that, like, let's say you own 10% at exit. That means you have $100 million return on that company if your fund size is 200 million. Like, ideally, it's not, it shouldn't be your biggest exit. You should have an exit that's, you know, 2 to 3X that size to really make the portfolio math start to pencil- But you know,

• 1:15:21David Rosenthal?

  But you could string together a number of those and you could have, you know, a good fund. It's been a long time since we've covered an acquisition on this show. Most of what we do are IPOs or just stories of great companies, right? Because now the opportunity is to build a great company and there's so much more capital available, not just from SoftBank, but from like Sequoia, for instance, which we'll talk about more on this season. Just raised the $12 billion global growth fund. So many funds, new entrants, all sorts of things. And the goal is really find these types of ideas and build them into really large, independent standalone companies.

• 1:15:56Ben Gilbert?

  Yep. Yep. Yep. There's a few other topics I want to touch before we sort of go to grading. So one is something we didn't talk about, but I think was actually a really big piece of value creation for Google Maps, which was Google Mapmaker. And Lars talks about this in a talk that he gives six, seven years ago. It's an old YouTube video with like 3,000 views. But basically, in order to build out maps, especially before they had all the, the cars driving around with cameras really operationalized, they got a lot of their early data from relying on the passion of locals who I think were called Google Guides

• 1:16:35Ben Gilbert?

  or Google Local Guides, who wanted to improve digital maps for their area because they saw this dream of, oh my God, like my area, no matter where I am in the world, should totally have a really rich, robust digital map for it. And, and they figured out this great system of appointing local guides and earning points. And community leaders emerged to really build the maps for their area. And it's the totally the power of, of UGC, of user generated content business models, where if you can organize people to do something that benefits them, I mean, people were excited to use the maps, but also have a little bit of, of street cred around being a local guide. And your vision is big enough and your vision is I want to make the world better in this way.

• 1:17:18Ben Gilbert?

  Everyone should be able to digitally view a map of their area because of all the benefits that come with that. You can get a crazy amount of stuff for your business for free and, and in a sustainable and updatable way. And, and for a long time and, and Google Mapmaker is not a tool anymore, but they still have variants of this with people in, in local communities updating information for them.

• 1:17:41David Rosenthal?

  You can claim your business and update all the info on it. Yep.

• 1:17:45Ben Gilbert?

  Another point that I wanted to make was Lars in that same talk talks about how difficult it was for them to recruit to where to. It was the four of them. They wanted to hire all of their engineering friends. They couldn't because everybody thought that they couldn't make money from maps. And I think it was even difficult to recruit once they got into Google because the canonical wisdom was there's not a business there. And as we'll get into here in grading, there was, it was just 15 years later.

• 1:18:11David Rosenthal?

  Yeah. Well, so lucky that Bret Taylor was already working on this.

• 1:18:15Ben Gilbert?

  Totally.

• 1:18:16David Rosenthal?

  Was the natural person to move over and help make this happen. And have to imagine adding a truly excellent PM to the team of engineers like that had a lot to do with how fast they shipped and how fast they iterated.

• 1:18:30Ben Gilbert?

  Do we want to do value creation, value capture before diving into grading?

• 1:18:35David Rosenthal?

  Well, we could probably devote a whole episode to this here, you know, between the wars between the platforms and the moat that Google has built because of all of this and how hard it is to compete. You know, we alluded to Mapbox, which is like great infrastructure potential, but like, man, that's a large hill to climb to compete with Google Maps here. And especially the Waze acquisition and like, I don't know, in the current antitrust environment, like, would that have been allowed to happen? Probably not. Or at least it certainly, I think, would have been scrutinized a lot more than it was. I mean, I guess this is a long-winded way of saying, I think, Google Maps is a perfect example to me of the kind of thing that Ben Thompson has been talking about for a couple of years now of like, antitrust

• 1:19:17David Rosenthal?

  needs to evolve in the current environment because Google Maps has created so much consumer surplus. It's free to use as a consumer. It's incredible benefits to like so many people's lives and so many other businesses. And yet, because of that, it has this moat where it's effectively a monopoly and it has been allowed to continue to purchase other startup competitors to it. And like, what does that mean for the future of innovation in the space?

• 1:19:45Ben Gilbert?

  But no doubt in my mind massively, massively value creating for the world that this product exists and that this acquisition happened.

• 1:19:52David Rosenthal?

  Zero doubt. The interesting thing is like it has created so much value for the world. Like, does that enable Google now to capture so much value going forward that it becomes a problem?

• 1:20:04Ben Gilbert?

  Which is a great way to segue into grading. You know, of the, a lot of times the way to sort of think about value creation, value capture is a fair trade is to be able to capture 10% of the value that you create for your customers. You know, at the very start of Maps, Google was capturing 0%. And the question is, how much are they capturing now from all this value that they're creating in the world? So, going into grading, this is where I want to make my case. The criteria that we use for grading, for anybody who's joined the show in the last, I don't know, season and a half or something, for grading acquisitions is, how good of an idea was it for the big company to buy the small company? Like, an F is, they lit the money on fire. That it would have been better off in their

• 1:20:49Ben Gilbert?

  bank account doing absolutely nothing, or perhaps even buying a company that did less worse, you know, less terrible.

• 1:20:55David Rosenthal?

  Are you referring to a burning platform?

• 1:20:56Ben Gilbert?

  A all-time Warner, or Nokia, or, you know, a variety of companies. An A+ is, Instagram is our shining example. Booking.com is a great one, too, of the Priceline Group buying that, you know, where you spend money and it becomes an enormous, enormous part of your business. Instagram, actually some great data that came out today, thanks to some reporting by The Information. Facebook bought Instagram for $1 billion, and Instagram revenues were expected to surpass $10 billion in 2018 after hitting $1 billion just two years before. So, I mean, you think about like, yeah, the enterprise value of Instagram is, I don't know, $1 to $400 billion?

• 1:21:37David Rosenthal?

  What is that? That's over 300% annual growth over the last two years, starting from a billion-dollar base. Oh my goodness.

• 1:21:45Ben Gilbert?

  Yeah, so that's, that's what an A plus looks like. So let's think about this. So let's start in the abstract. Google's mission is to organize the world's information and make it easily searchable. What Maps does really is it organize the world's information geographically. So it's this sort of like really, really nice extension of their mission. And another thing to keep in mind for context here is to remember that Google, despite being in cloud computing, productivity, mobile operating systems, making phones, making laptops, making home assistants and all these other bets, 84% of the revenue for Google still

• 1:22:29Ben Gilbert?

  comes from advertising revenue. Like 4% is Google Cloud, which they just started breaking out and 12% is this others. So when you think about Google as a business, it is ads and most of the ads is search ads. Not this.

• 1:22:44David Rosenthal?

  Uh, no, does that include YouTube ads too? I think.

• 1:22:47Ben Gilbert?

  Yes, the YouTube ads are included. YouTube ads and Maps ads are included in that 84% of revenue is considered, I guess, advertising that what they don't break out is what is search advertising. I don't think that they have over in different points in time sort of alluded to it, but it's not in their regular financials to break out sort of like YouTube advertising versus search advertising. So advertising is still the cash cow. Maps, one decent allegory is Maps is a lot like Facebook acquiring Instagram. Granted, Maps didn't come with its own user base, but you know, in the sense that it lets their existing advertisers have access to more inventory and new and creative ways to reach users where they are.

• 1:23:30Ben Gilbert?

  You know, YouTube is, is similar. YouTube actually is estimated to be worth $160 billion, according to a Morgan Stanley estimate. So David, it is, it is time for us to go and revisit YouTube. We, we analyzed that business and said from as best we can tell, it's still a break even business. You know, it's still is extremely expensive to run.

• 1:23:52David Rosenthal?

  We just did the episode too early.

• 1:23:53Ben Gilbert?

  Yeah, well, the funny thing is, we did the episode sort of like value investors. Like, you know, what are, what are the gross margins on this business? And, you know, will it ever actually generate a profit? And we should have been doing it like tech investors or like public market investors who are willing to buy these IPOs, who are saying, wow, look how much revenue they're doing. Let's, that's a $160 billion market cap company right there within Google. It's being a little facetious, but, uh, you know, it really speaks to the difference between trying to value a business based on what you think it's either unit economics or gross margins are today and what you believe that scale will be able to let that business accomplish in the future.

• 1:24:36Ben Gilbert?

  So here I'm making this case that Maps is kind of like YouTube, which is kind of like Facebook buying Instagram, which is take your existing advertisers, give them a new way to reach existing customers in a new inventory format that's valuable. So, you know, what are the equity researchers sort of think that Google Maps is doing as a business? Baird Equity Research has estimated that in 2016, Maps could do 1.5 billion in revenue. And then in 2017, they estimated that as soon as 2020, Maps could do 5 billion in revenue. And you really start to see, you know, this business emerging where people are using Google Maps as a place to go for search. And it's a different kind of search. It's not what lawnmower should I buy?

• 1:25:21Ben Gilbert?

  I mean, that's all happening over on Amazon, but they're really using it for I need to find something around me. And they're very open to suggestions. I mean, last year, Google launched, or I think two years ago, they launched promoted pins on Google Maps. They just issued a change in the last six months that sort of made those larger and more prominent. But they're really starting to think about using the Google Maps surface, much like the search results surface.

• 1:25:44David Rosenthal?

  Yeah.

• 1:25:44Ben Gilbert?

  And I think that they're-

• 1:25:45David Rosenthal?

  Total aside here, a feature request for any Google Maps folks who are listening right now. So I still use Foursquare for restaurant, bar, cafe discovery.

• 1:25:56Ben Gilbert?

  I think you're weird in that, man.

• 1:25:58David Rosenthal?

  Well, okay, but, but here's why. So for, for Google Maps folks who are listening. I hate the five star rating system of both Yelp and Google Maps. I think it's completely useless and doesn't give me any actual information. Foursquare has a 10.0 rating system. And so when I run a search on Foursquare, they have two features. One, that you can use your finger to draw a geofence of where you want to search. I still don't think you can do that on Google Maps. Like for me, like I'm looking for a restaurant in a very specific area that is not a rectangle that I can get to with map zoom. Two, the ability to differentiate between quality at that 10.0 granular level is super important to me because everything's a four star. And that just means like, I want to know, and what I can tell Foursquare is, show me

• 1:26:42David Rosenthal?

  ranked on a 10.0 scale within this very specific geofenced area that I've drawn, what the best cafes are. And then I can like, that is much more useful information to me than the current way you can search for such things on Google Maps.

• 1:26:56Ben Gilbert?

  It's a, it's a great feature request. And actually it, I looked up last night to see what's Yelp do in revenue. Last year they did about a billion dollars. I mean, that could also be Google's revenue. Like I could see a world where Google Maps continues to get better and better. They encourage people to do more and more local searches there. They control the operating system so they could get a little bit more heavy handed for how most people, or at least 50% of America and most of the world, begin to look for things in the real world. It seems very plausible to me that there's five, $10 billion of advertising revenue that Google could see come from the mapping product. And if, if you're looking at it that way, I mean, it could well be as, as big as an advertising platform as Instagram is.

• 1:27:39David Rosenthal?

  Yeah, yeah. Then you have the API licensing, and I haven't dug into the finances there, but-

• 1:27:46Ben Gilbert?

  It's tough. What you can do, the, the new pricing is $7 per thousand requests. So it's a $7 effectively CPM. So any app that wants to, so DoorDash is paying $7 per thousand time someone looks at a map. And there are five million customers with API keys for, for Google Maps. And so tough to, tough to quite understand how much of the Google Maps business is attributable to the- The API versus versus search ads, but.

• 1:28:16David Rosenthal?

  The potential is there.

• 1:28:18Ben Gilbert?

  Yep, for sure, for sure. So when I, when I look at this versus Waze, you know, let's say that this acquisition, just to put a number in the air, is where to was maybe 10, 20 million dollars. Waze was a billion dollars. You look at the revenue potential from Maps and, and probably what they're doing now being single digit billions, maybe in the next couple of years, getting to 5 billion. It, it's a much better revenue business. They were generally in a lot more revenue from Google Maps than they are from Waze, and they paid a heck of a lot less for it. Now, of course, the amount of the billions of dollars they've poured into building the asset over time, you know, that's actually, I think, the, the right way to, to sort of analyze this, but,

• 1:29:02Ben Gilbert?

  you know, just for, from the acquisition itself, paid way less to buy the company and seeing significantly more upside than Waze.

• 1:29:10David Rosenthal?

  In this case, this is, it's truly warranted to say the financial aspect is only one part of grading here, and probably not even the most important, because it's everything we've been talking about. This is fundamental infrastructure for so much of the internet and beyond the internet going forward. As you think about autonomous vehicles, if and when they should ever become mainstream, that this asset is so, so valuable and they bought it for, you know, so we know it was 37 million dollars for ZipDash and Keyhole, add, say, another.

• 1:29:49Ben Gilbert?

  It's more silly to do that.

• 1:29:50David Rosenthal?

  It's silly, right?

• 1:29:51Ben Gilbert?

  They've probably spent.

• 1:29:52David Rosenthal?

  But you're right, they've spent billions.

• 1:29:53Ben Gilbert?

  How many billions of dollars, yeah, really creating it.

• 1:29:55David Rosenthal?

  But, but it was, as we talked about, if they hadn't bought these companies, I don't think it would have bubbled up internally, certainly not as fast to be working on these things. And the moat that they have, you know, again, back one of Justin O'Beirne's pieces called Google Maps moat, the moat is so wide at this point. They have years and years of advantages over any other competitor, and that gap keeps getting wider. Anyway.

• 1:30:22Ben Gilbert?

  It's funny you mentioned self-driving cars because I think if we had done this episode a couple of years ago, I would have been more inclined to grade on how helpful has it been to self-driving cars. But in spinning Waymo out and that market developing slower than we all sort of, I don't know.

• 1:30:39David Rosenthal?

  Thought it might.

• 1:30:40Ben Gilbert?

  Wanted thought. Yeah. And it feeling like Google's not necessarily a clear winner there. It's, I feel like less of the value that Google Maps is going to provide is coming from self-driving cars in the next, I don't know, five years or something.

• 1:30:53David Rosenthal?

  That may be true. But what's interesting, though, is like, to me, it comes back to the API. Forget self-driving cars. What about Uber? What about Zillow? How many more businesses are going to be built on the Google Maps API? I don't think we're done yet.

• 1:31:05Ben Gilbert?

  No, I think you're totally right. This is an A for me.

• 1:31:09David Rosenthal?

  Yeah. Yeah. Well, I think that, yeah, for me, too, the question is, is it an A?

• 1:31:13Ben Gilbert?

  An A+.

• 1:31:15David Rosenthal?

  I mean, with Instagram, it's like they have, on every dimension, strategic asset base and financial returns. It's a knock it out of the park.

• 1:31:26Ben Gilbert?

  The reason why I think this is an A and not an A+, when you just compare it to Instagram, is Instagram is a pure tech business. Like, they've built an incredibly asset-light thing that's pretty, I'm going to say, easy to maintain, even though there's tons of people working on it. But basically, like, super high fixed costs, almost no variable costs, and except for like, cost of revenue to go and acquire the advertisers that are, that are putting the ads on it, but crazy high gross margin business. When you look at this, the maintenance costs of keeping the maps up to date, to adding the expected functionality, to doing all this stuff in the physical world, it's, it's meaningfully higher.

• 1:32:04David Rosenthal?

  All right. I'm with you. So there, so are only A pluses remain Instagram and next?

• 1:32:11Ben Gilbert?

  Uh, I think booking.

• 1:32:12David Rosenthal?

  Oh, was, was booking an A plus or an A?

• 1:32:14Ben Gilbert?

  If it wasn't, we were wrong.

• 1:32:17David Rosenthal?

  Okay, we're either actual grading or revised grading. The A+ pantheon is next, Instagram and booking.

• 1:32:27Ben Gilbert?

  Yeah.

• 1:32:27David Rosenthal?

  Maps doesn't quite make it, but it's very close.

• 1:32:29Ben Gilbert?

  Doesn't quite make it. And we'll see over the next few years, too. I think it could, I think it could emerge. The two big takeaways are, one, it's fundamental structure to the internet as we know it today, that they're going to monetize through charging for that API. And two, it's an ever increasingly common, basically new search page. And Google makes all their money on the search page.

• 1:32:49David Rosenthal?

  Yep. There we go. Very compelling argument. We want to do a bit of follow up?

• 1:32:55Ben Gilbert?

  Yeah, so I messed something up on the Shopify episode that I wanted to talk about. That was our last episode, not including the quick take that we did on DoorDash. And that was Shopify actually powered $41 billion of sales last year, not 14 billion, as discussed toward the end of the episode. That 14 billion number that we talked about was the fourth quarter number. So I guess we way discredited the incredible amount of commerce that Shopify powers. So while this changes the analysis of the value captured that we did at the end of the episode, where Shopify actually only captures 2.5% of the merchant sales as their own revenue,

• 1:33:38Ben Gilbert?

  not the 7%, which admittedly is very different. I don't think it changes the overall sentiment that we had on the company, as discussed in the episode. Any thoughts on that, David?

• 1:33:48David Rosenthal?

  The only other thing I'd add, especially given this episode and the, just talking about the platform that Google Maps has built and the ability for and power of companies to be built on that platform. I'm starting to think Shopify actually is a similar opportunity that you could think about, like, I think you might be able to build really big companies that use Shopify and Shopify's customers as a platform, and in particular Shopify fulfillment that was just launched, which is not them doing their own fulfillment. It is, it is a wide open door for new logistics and fulfillment providers to come in and serve all of Shopify's customers with a very easy distribution channel and customer acquisition. So I'm even more bullish on Shopify's potential as a platform.

• 1:34:33Ben Gilbert?

  Yep, very much agree. And interestingly, that's predicated on there being a huge total addressable market out there. Because if we think about this, so Shopify, I mean, it's not a marketplace business, so it's not a take rate. But if you think about it this way, they capture 2.5% of the value that they create as their own revenue. If you think about Uber, Uber captures close to 30% of the value that they create as revenue for themselves in the form of a take rate. That's Marketplace Assign, where the platform itself is doing a lot of the work. If you look at Airbnb Marketplace Assist, do you know what the take rate there is, David?

• 1:35:12David Rosenthal?

  It's about 14%, or at least historically, on average.

• 1:35:17Ben Gilbert?

  So, so less of the value is sort of being provided by the platform than Uber, because Uber actually assigns you someone. When you bring supply to demand, you're entitled to take much more of the economics than if you just provide a platform and then say to someone, "Go find all your own customers." And I think that that was sort of an interesting takeaway for me in analyzing the percentage of total value they're capturing.

• 1:35:46David Rosenthal?

  Yeah. Well, it comes back to the end of the Shopify episode, which we talked about of, it's not a network effect business, although there are network effect aspects to it. It's a platform. And it's Bill Gates' definition of a platform is you are capturing far, far less of the value than you are creating. And what's cool about platforms like Google Maps is they provide a wide open opportunity for businesses to be built on top of them, and especially marketplace businesses. So if you're, if you're building a marketplace business on Shopify, or anything resembling a marketplace business, please come talk to me.

• 1:36:19Ben Gilbert?

  Carve-outs?

• 1:36:20David Rosenthal?

  Carve-outs. I'm gonna do a mashup of one of your recent carve-outs, which is The Expanse. I started reading, not yet watching the TV show, I want to read the books. I started reading the books of The Expanse series. They are so good. So, so good. I finished the first one. I'm in the second one. I think there are maybe nine in total. So it's gonna keep me occupied for a while, but really, really great stories.

• 1:36:44Ben Gilbert?

  I heard the books are great. I did the lazy thing and watched the TV show. It's good.

• 1:36:48David Rosenthal?

  I'll watch the TV show eventually. Books or TV show, take your pick. Great, great sci-fi stories.

• 1:36:54Ben Gilbert?

  Yep. David, as you alluded to early in the episode, I've been doing a lot of running recently. I ran my first marathon on Sunday this past weekend, and that means that I've listened to a lot of podcasts in my training. I always thought I'll never listen to podcasts when I run. Like, I need something, I need music, I need that to be sort of like fast and motivating, and I can't like not focus on the running. It turns out, like, when you're doing lots and lots of miles, having a distraction is actually pretty nice, and being able to not focus on the steps is quite nice. So, one of the episodes that I listened to during the marathon was an episode of The Moment with Brian Koppelmann, who you may remember me raving about is the, one of the co-creators of Billions on a previous carve-out. So, he

• 1:37:39Ben Gilbert?

  has this podcast. The podcast itself is very cool because he talks to people from sort of all walks of life, but really dives into creativity, creative process. It's like lightweight psychoanalysis, but it's a lot of making the unique work that someone does, often in a very archaic way, understandable and digestible to a broad audience. And that's very similar to what he did at Billions, it's very similar to what he did in Rounders, and he interviews in this episode Mark Andreessen. And it's really fun to, for listeners to this show, for myself, for David, we listen to people talk about tech and venture capital

• 1:38:22Ben Gilbert?

  and building big companies within our own circles a lot. And we get to hear it discussed at a very micro- Exactly, exactly. We all know what the terminology means. There's lots of expectations that we all sort of have. There's lots of things that you can look over at another person and know that they have the same fundamental basics assumptions that you do. Brian's show is not like that. And so, it's very cool hearing Mark Andreessen explain venture capital to not, you know, people who probably have never come in contact with it. It's just a really cool and different perspective on it, I think. Super cool. I'll have to listen to that. Yeah.

• 1:38:59David Rosenthal?

  All right, listeners. Now is a great time to talk about one of our favorite companies, Statsig.

• 1:39:06Ben Gilbert?

  Yes, there is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale.

• 1:39:17David Rosenthal?

  Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers, and how fast you can use that signal to guide what you ship next.

• 1:39:37Ben Gilbert?

  This is where Statsig comes in. It brings experimentation, feature flags, and product analytics into one unified system so teams can ship safely, test rigorously, and directly link what they changed to how users actually behaved.

• 1:39:49David Rosenthal?

  So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com/acquired to get started.

• 1:40:00Ben Gilbert?

  All right. That brings us home. Listeners, if you aren't subscribed and you like what you hear, you should click the subscribe button in the podcast player of your choice. And if you want to become a limited partner, subscribing gets you access to our bonus show, where, as I mentioned earlier, we dive deeper into the nitty gritty of actually building companies rather than what we're doing on this show, which is reflecting on where they ended up. So if you are in the process of building company in any way, shape, or form, we'd love to have you join us and listen. You can click the link in the show notes or go to glow.fm/acquired and all new listeners get a free seven-day trial. So with that, we will see you next time.

• 1:40:41David Rosenthal?

  See you next time.