It’s an infamous story of Internet history as well as business lore, but in 1999, the search engine Excite.com—then running number two to the reigning champion of search in the dot-com era, Yahoo—had the opportunity to purchase Google, the site that would eventually dethrone Yahoo as the king of search, for the low-low price of $750,000.

Excite passed.

On Monday’s episode of the podcast, I got the chance to speak with George Bell, who was the CEO of Excite at the time. He was the guy who nixed the Google deal. And he gives a very compelling reason for why he did so.

In short? Larry Page drove a hard bargain. In the end? Too hard for Excite’s taste.

Why Excite Said No To Google

Again, in 1999, Excite was running a distant number two to Yahoo in terms of “search” traffic. But Excite was a technology play, a true search engine, as opposed to Yahoo’s vaunted directory. Both companies, in addition to most of the other search engines out there (Lycos, Alta Vista, et al) had been busy transforming themselves into “portals,” the business model favored by Wall Street at the time.

Back in the dawn of the Internet days, Excite had been the “search play” backed by Kleiner Perkins (as opposed to Yahoo, which had gotten its original funding from Sequoia Capital). So when Kleiner, and Khlosa specifically, began to get interested in Google, they came to Excite first, as a matter of etiquette.

Here’s George Bell, from our interview:

I got a phone call from Vinod Khosla one day at Kleiner, saying he had an opportunity to invest in a new search engine. Maybe it’s 1998? I think it’s around that time. And Vinod said they would not do it if we objected because they made a lot of money on Excite. And they were still on our board and they were big supporters of Excite. I said, “Well, why don’t you make the introduction. I’ll talk to the guys and we’ll see.”

According to Bell, they arranged a technological bake-off, in order to see which technology was superior, Excite’s or Google’s (at that point called BackRub). Again, here’s Bell:

And, we probably—over a period of several weeks—developed a capacity to run hundreds of queries of reasonably common searches… of one versus another… of Excite versus another… Excite versus Google. And, we really, frankly, couldn’t see much difference. There wasn’t a clear delineation. I think if you talked to Graham Spencer [Excite’s technical founder] he would tell you that they’d done some very clever things in technology, that he thought would allow them to scale with real speed. But that if you looked at results and looked at the way consumers would look at it, it really wasn’t that differentiated to us. And actually, all of us at Excite have a pretty common recollection of that.

But here’s the real reason Bell says he turned down the deal. Again, despite the small terms of the proposition, at least in terms of cash and equity, Larry Page had stipulations that would be—at least, technologically speaking—a “takeover” of Excite. George Bell:

Ultimately, Larry said, “Look, I like the engineers at Excite. I really like the company. I get that you don’t see a lot of difference.” And, I think we struck a price. I believe that the price was $750,000 in cash, and something like 1% of Excite. The economics of that were really ok to us. The thing that Larry insisted on that we all do recall, is that Larry said, “If we come to work for Excite, you need to rip out all the Excite technology and replace it with Google’s search.” And, ultimately, that’s, in my recollection, where the deal fell apart. Because, we had hundreds of engineers at that point, and culturally, we really were driven by technology. And I didn’t think we could survive… or the differentiation in search results were clearly not dramatic enough to justify the cultural risk that Larry would insist on. So, ultimately, we passed.

So, according to Bell, Excite passed on purchasing the technology that would eventually become Google because Larry Page insisted on a sort of Trojan-horse takeover of the company’s root engineering and technology.

The Other Side of the Story

In the book In The Plex , the author Steven Levy has a different version of events. According to Levy, Larry Page wanted to get back to his doctoral studies at Stanford. But he figured that his Back Rub algorithm would increase Excite’s revenues by about $130,000 every day. So, if he implemented his technology, and worked at Excite for just a few months, he figured he should be compensated for his time, and thus, his price was about $1.6 million, for what he figured was a one-off gig before he went on to bigger and better things.

And in Levy’s telling, Excite had no interest in making a search engine perform better. This is from Levy’s book, describing the technological bake-off:

When the team got to Bell’s office, it fired up BackRub in one window and Excite in the other for a bake-off. The first query they tested was “Internet.” According to Hassan, Excite’s first results were Chinese web pages where the English word “Internet” stood out among a jumble of Chinese characters. Then the team typed “Internet” into BackRub. The first two results delivered pages that told you how to use browsers. It was exactly the kind of helpful result that would most likely satisfy someone who made the query. Bell was visibly upset. The Stanford product was too good. If Excite were to host a search engine that instantly gave people information they sought, he explained, the users would leave the site instantly. Since his ad revenue came from people staying on the site—“stickiness” was the most desired metric in websites at the time—using BackRub’s technology would be counterproductive. Levy, Steven (2011-04-12). In The Plex (pp. 29-30). Simon & Schuster, Inc.. Kindle Edition.

George Bell disputes this:

Steven Levy has written that we never wanted to purchase Google because it was a better search engine. And we didn’t want the search engine to be “too good” because it would send people off our site. To other places. I think that’s baloney. In my own recollection… and ultimately, of course, I did make the decision… that’s a factor that never occurred to me, frankly. We would always try and buy or partner with the best product in the best area we could, and figure out the business model later.

Either way, it’s a fascinating bit of alternative history. What if Excite HAD bought Google?

Here is the entire George Bell interview. His explanation of the Google deal begins at minute 45. And a transcription of his entire quote on the matter is below that…