Did you know Jeff Bezos invested in Google in 1998?

He was one of the earliest investors

Photo by Mitchell Luo on Unsplash

With over 3.5 billion searches per day, Google doesn’t need much of an introduction.

Many of us know about the various businesses it owns, ranging from YouTube to Android. Some of us even know it was founded by two Ph.D. students at Stanford University. But surprisingly, very few of us know about its first investors.

This is the story of how Jeff Bezos —that’s right, the founder of Amazon — invested in Google back in 1998.

Background

To trace how Bezos ended up investing in Google, I need to give some context.

Back in 1996, Sergey Brin and Larry Page were still Ph.D. students at Stanford University. As they set out to find a research topic for their dissertation, they eventually settled on creating the foundations of what would later become the search engine.

What started as a university research project swiftly escalated, and two years later, Google was formally incorporated in Menlo Park, California.

Meanwhile, Amazon was disrupting the e-commerce scene. With just four years since inception, its momentum was hard to ignore. In fact, it had gotten on the nerves of Barnes & Noble and Walmart, both of which decided to sue Amazon for false claims and trade secrets, respectively.

For Amazon to meet its ambitious growth plans, it sought to expand through acquisitions. In 1998, they bought Junglee, which brought several new employees into the Amazon ecosystem. Among them was Ram Shriram.

Shriram had been advising the two Ph.D. students, and eventually became one of the first investors with a $250,000 investment. He would later become the crucial link between Bezos and the co-founders.

The Investment

Photo by Christian Wiediger on Unsplash

While Shriram was finding his feet at Amazon, Bezos reached out, requesting an introduction to the Google duo.

Shriram eventually set up a meeting, where Brin and Page showcased the search engine's capabilities. As Bezos later said in an interview:

“I just fell in love with Larry and Sergey” -Jeff Bezos, Founder of Amazon

Although the Google funding round was officially closed, Bezos’s newfound billionaire status persuaded them to sell him a stake in the startup.

Bezos initially invested $250,000 in 1998 at four cents a share and later invested another $1M in a subsequent round (some reports vary on the exact amounts).

Although Bezos was primarily an investor, Larry Page is quoted in the book “Googled: The End Of The World As We Know It” stating:

“Jeff was very helpful in some of those early meetings” -Larry Page, Co-Founder of Google

The Potential Sale

Worried Google was taking too much time away from their academic research, Brin and Page tried to sell Google in 1999.

At the time, one of the biggest search engines was Excite. As such, they approached Excite CEO George Bell for a $1M sale, but he passed on the offer. After some thinking, the duo was persuaded to drop the asking price. They went as far as offering a discounted price of $750,000, but Excite still rejected it.

Today, Alphabet (Google’s parent company) has a market valuation of 1.5 trillion. Meanwhile, Excite lost popularity, and eventually got acquired by Ask.com.

Had Google sold, Jeff Bezos’s initial investment certainly wouldn’t be worth billions today. But seeing how Amazon turned out, it’s hardly like his $200 billion net worth would have taken a hit.

Top Takeaways

Some may think Bezos was lucky with the Google investment, but his eye for startups also got him a stake in Twitter’s early stages.

As Google and Amazon’s ambitions increasingly collide in cloud computing, it would be ironic if the company Bezos funded ends up stepping on the shoes of his own creation.

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