Paul, I wrote that answer to be concise. I am not trying to write another book on Google. When you build a Google, you can tell me I am wrong.
Everyone I have spoken to that has built a successful company has told me that their ability to manage the long term interests of their company was impaired by losing control of their board of directors.
If Mark Zuckerberg did not have control of his board, the company would have been sold to Yahoo for just under a billion dollars, where Facebook would have died. The Yahoo executives wanted to "Nascar up the site". It would not be a 30 billion dollar dollar company today if the board had been investor controlled.
The reason Friedster failed was that the company was managed from the board of directors by investors which did not use their product. The founders of Friendster were screaming at the board of directors that the website took 40 seconds to load, but the board was more concerned with expanding into new markets and adding features, rather than solving the scalability issues the company was facing. Myspace copied Friendster, solved the scalability issues and dominated until Facebook introduced the feed and notification mechanism and took the college demographic.
If you want to build a long term success like Google, you have to be in a position to ignore your investor's short term desire to improve the company's financials by sacrificing long term growth. The quickest way to increase your margins is to reduce investment in the future.
Most of Google's costs were from their consuming facing search product. Almost all of Google's revenues were from enterprise search. Dropping consumer facing search would have improved Google's financials for sale or IPO. Everyone at the time believed that search engines were loss leaders for portal sites. If the management team did not have board control, the decisions that would have been forced on the company would had led Google to a different, much grimmer corporate destiny.
The management team at Google believed strongly in the future of internet search and the growth of online advertising. They saw the potential of using search queries to target advertisements and that search engines were uniquely positioned to monetize lead generation; at a time when search engines were loss leaders for portal sites. If the company had cut its loss centers and focused on its profit centers, the company would not have been as successful as it is today. The operating autonomy of Google's management team was critical to Google's long term success.
I do not care what Paul Buchheit says. Eric Schmidt has on several occasions discussed the advantages of Google's ownership structure and how it enabled Google to ignore outside influences and focus on the long term success of the company. If Paul Buchheit disagrees with the CEO of Google about the importance of Google's ownership structure and the operational autonomy of the management team, then its unfortunate.