When CEOs Reject Good Offers That May Have Come from Nobodies: The Case of Google and Excite

Excite CEO throws out Google from the door. Click on image for larger view

CEOs are saddled with offers everyday. But it appears that when looking at these offers, especially unsolicited offers, the CEOs tend not to look primarily at the substance of the ideas, but at the persons behind the offers. Most times also, they either not look at the offers at all or they delegate the examination of the offers to subordinates. The tendency is for the subordinates to iron out all the reasons why the “untested ideas” must be turned down. Ostensibly, they do this to protect themselves from being blamed for anything that might go wrong should the new idea be accepted and not work. Again, they must create an impression of protecting the CEO and the company. And, that has been the mistake most CEOs make.

Truly, these CEOs make important decisions everyday – mostly good decisions. But they make terribly bad decisions too. One of the worst decisions a CEO has made in modern history was made by George Bell, CEO of the one-time popular web portal Excite. The CEO turned down Larry Page's and Sergey Brim's offer to buy Google from them for a paltry $1 million. The two Google founders were, at that time, graduate students of Stanford University and they were feeling that the Google project was taking too much of their time, and that their studies were being neglected. Thereupon, they set out to sell Google and offered to George Bell, whose company Excite was the powerhouse of Internet search at that time. George Bell did not only reject the offer, but he also got into a heated discussion with one of Excite's venture capitalists, Vinod Khosla, who had negotiated a $750,000 offer with Larry Page and Sergey Brim.

Google is today, one of the most successful companies in the world and is worth nearly $200 billion while Excite is all but extinct.

CEOs ought to understand that people that have already made big names are unlikely to contact them more than “nobodies” with great ideas. Larry Page and Sergey Brim were poor university students when they came up with the idea of Google. Microsoft’s Bill Gates, Facebook’s Mark Zuckerberg, Dell’s Michael Dell, RIM’s Mike Lazaridis and Apple's Steve Jobs were all “nobodies” and not even college graduates when insightful CEOs broke the norm and took on the ideas of these geniuses.