Internet users heavily into clouds, most unknowingly

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Who are some of the key players in this space?

The leader is Amazon. They started in the business by renting out their idle servers during non-holiday-shopping seasons. Google provides applications in the cloud. Facebook is a cloud company; they host a number of third-party applications on their cloud.

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How did your initial investment in Google come about?

I was using the Internet to search for things. Alta Vista was the search engine then, and they had a very simple algorithm. It counted the number of times words appeared in the document.

So people built these dark pages behind the Web page to game the system. As a result, the search results became useless, and doing a high-quality search was impossible. I was just interested in getting better search results. After I heard from Larry and Sergey about their idea, I rushed out to my car to get my checkbook. The company didn't exist yet. So I wrote them a check and said, "Here's a check to get you started."

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You've made a number of smart calls over the years. What do you look for in an investment?

You want to see a viable business plan where it can be profitable over time. In the late 1990s, there were a lot of companies that basically just took an idea for an existing business and put it on the Internet. They took dog food, for example, and sold it online. That wasn't a very good business model. Whereas Amazon created something completely new.

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What else?

Simplicity. If an idea makes intuitive sense in the first five minutes, it's probably a good idea. But the more time it takes to understand, the worse it gets. Google was a very simple idea.

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alex.pham@latimes.com