EDIT: Although, I bet that scooping up the founders would have made it worth it, though their willingness to sell for $750k makes me wonder if they were the visionaries then that they appear to be now.
Reminds me of a friend of mine when we were younger. When asked what he did, he replied, "I'm a rock start. But nobody knows it yet".
Anyway, From the day Google hit the market, and their searches actually returning something even remotely close to what you where looking for seemed like voodoo. Google exceeded the "remotely" part by usually hitting the nail on the head. Given the fact that their algorithm was not known it was not being manipulated like people try to do today. Search results where actually better back then then they are today.
Anyway to get to the point, I don't think there where too many people that thought Google was going to be anything short of "the" search engine. At lest those at the grassroot level.
I think this is the case of a executive dismissing the technical merit of a competitors product, when the other offerings where so abominable that technical merit counted.
When things are close you can win out on branding but this was a case of the buggy companies not seeing the horseless carriage decimating their market while the guy on the street could see the advantage of the new offering clearly.
Many of the startup entrepreneurs I know spend an unfortunate amount of emotional energy beating up on themselves for not having created Facebook/Twitter/name-your-favorite-uber-success-story here.
It's good to be regularly reminded that smarts and incredible work ethic are necessary but not sufficient for that kind of epic-level startup success.
Or perhaps they had more than one idea, and selling a preliminary collection of search algorithms to reduce personal financial pressure made sense to them given the high-risk nature of the market they were playing in.
They went to these guys wanting to cash out and probably lay low for a year or two ... after which I'm sure they'd be back on their feet with something new.
You can see this occurred before the $25m round of financing which Kleiner Perkins was a part of. So at the time it was a money losing PC-Magazine declared "search engine of choice" operating out of a garage competing in a space with Excite, Yahoo, Altavista, and many others. Google was not a business, really, until October 2000 with the launch of the incredibly successful adwords. Prior to that search was a money losing venture.
If excite didn't see value in them it's because they were too busy pushing their portal garbage (along with everyone else).
Back then, if I'm not mistaken, VC firms (like the one in the story) were much more "controlling" than they are today. So, in my opinion I don't think that Google would have been as successful as they are today.
Or would this have just been mean?
After edit: not knowing what has motivated the downvotes, I'll note for the record that I was an active researcher on the Web at the time, and right from the beginning it was noticeable that Google returned much better search results than Excite did. Excite had some rules about ranking search results that actively penalized pages with relevant content compiled by page authors who weren't spamming. And despite efforts not to be subject to spamming (Excite was not the worst available choice at the time, and was once one of my top-three search engines), Excite could be fooled by spammers. As soon as Google came on the scene, a lot of serious researchers rapidly abandoned Excite, and Excite certainly suffered from a precipitous drop-off in favorable word of mouth from general consumers once Google was on the scene.
