Google’s Eric Schmidt On Privacy, Politics and Facebook
He may not be CEO anymore, but Eric Schmidt still has plenty to say about Google.
Now the executive chairman, Schmidt is also the interview guest kicking off this year’s D: All Things Digital conference in Rancho Palos Verdes, Calif.
6:00 pm: Well, it’s almost game time. Things haven’t quite kicked off as yet, but stay tuned here and you won’t miss a beat.
In the meantime, the Holy Roman Empire was neither Holy, nor Roman nor an Empire. Discuss.
6:03 pm: The doors are opening and folks are sprinting to their seats. Oh, wait, that’s my line for next week’s WWDC live blog.
But folks are taking their seats.
6:07 pm: By the way, we are livestreaming Schmidt’s chat (and two other D speeches) at AllThingsD.com. But, rest assured, you can also tune into this live blog and not miss a beat.
Livestream or liveblog. We’re all about options.
But, if you aren’t here, you are missing out on some serious nerdspotting and mingling opportunities, not to mention this tech-filled schwag bag.
6:13 pm: We’ve still got music playing. But not that conference-call hold music. We’re rocking out to “Pride and Joy” by Stevie Ray Vaughan.
6:19 pm: The first speaker has taken the stage and it is Wall Street Journal managing editor Robert Thomson, who notes that 200,000 people are paying for Wall Street Journal tablet subscriptions in one form or another.
6:21 pm: And next up, acting CEO of News Corp… Jane Lynch.
6:21 pm: “As temporary head honcho of News Corp.,” Lynch says she is making a few changes to the company.
“Number one, The Daily. Never heard of it. Never seen it. So clearly I am shutting it down.”
She also says she is adding a comics page to the front of the Journal, including Cathy and the Family Circus to the front page.
Lynch also says that she is launching a Fox News investigation into whether the cast of “Glee” was really born in America, and convincing Glenn Beck to stay on at Fox, at least for a guest spot on “House” as a dying patient with a disease eating away at him from the inside out.
Lynch says she’s confident that powers that be–including Rupert Murdoch–will be pleased with the changes.
Now, could someone just help her with her BlackBerry. It keeps freezing up.
With that, Kara and Walt.
6:25 pm: Kara Swisher and Walt Mossberg take the stage.
Kara notes, for the reporters in the room, that all quotes from Jane Lynch can be attributed to Murdoch.
6:26 pm: Kara gives a shout-out to the all-new redesigned and rebranded AllThingsD.com. Objectively speaking, it’s a really great site with a crack staff. You should check it out.
6:28 pm: Kara introduces Google Executive Chairman Eric Schmidt. “Hopefully he didn’t get slushied on the way here, because he really is a nerd.”
Kara notes that she is married to a Google executive.
“I was hoping she’d get re-org’ed out,” Kara says. But since she wasn’t, Kara says she wanted to make sure that disclosure was clear.
Schmidt thanks Kara and Walt for building the place that people go to for serious tech news.
“Thank you for sucking up right away,” Walt says.
6:30 pm: Schmidt talks about his new role, which includes government relations.
We should expect, he says, given the role Google plays, to be talked to.
What we do is information and information is powerful.
We expect constant review of acquisitions, policies, etc.
6:31 pm: Mossberg: It seems like we are in a new platform war. Everyone knows about Windows vs. Apple platform–which we all know Microsoft won handily.
Schmidt sees a “gang of four” including Google, Apple, Amazon and Facebook.
“We’ve never had four companies growing at the scale those are, in aggregate,” he says.
We can debate who is fifth and sixth, he says, mentioning PayPal and Twitter, but not Microsoft.
6:34 pm: Schmidt is talking about each of the platforms. Facebook, for example, has spawned an ecosystem that includes companies like Zynga.
6:35 pm: There are no local companies any more. They are all global and they move very fast.
Kara: Why not Microsoft?
Schmidt: Microsoft is not driving the consumer revolution. They’ve done a very good job of getting them locked in on the corporate side.
6:36 pm: Walt: Will the gang of four continue?
Schmidt: It’s unlikely one of the four will acquire another because of antitrust issues. “More likely is one begins to miss the mark.”
6:37 pm: Kara: What about the relationship with the fellow “gang of four” members?
“We have a partnership with them and we compete with them,” Schmidt says.
“We’ve tried very hard to partner with Facebook,” he says. “Traditionally, they’ve done deals with Microsoft.”
6:38 pm: Kara: It seems like Google is chasing Facebook on a lot of things.
“Facebook has done a number of things which I admire,” Schmidt says, noting that the Internet traditionally hasn’t done well with identity, something that Facebook has done well.
“Identity is incredibly useful because in the online world you need to know who you are dealing with,” he says.
6:41 pm: On Google’s forthcoming social technologies, such as “+1.”
Schmidt: We will use the technology we are announcing over the next while to make our current products better. It’s not directly going after Facebook.
Amazon has done a very good job at the cloud layer, Schmidt said, referring to S3 and other online services. They’ve also done distribution well.
6:42 pm: Kara: What is your day-to-day job?
“It seems to be living on airplanes,” Schmidt says. A lot of it, he says, is meeting with customers, partners, trying to get deals done, meet with governments. It became untenable to do that and physically run Google in Mountain View.
6:44 pm: Walt asks about Google’s just-launched cloud locker service. Why do you want to be in that business and why couldn’t you come to terms with the record labels?
Schmidt: Google is more than a search and advertising company. More of a cloud computing company that includes browsing, maps and more.
“We try to start with the premise that things should be free,” he says. Also some paid enterprise stuff.
On cloud music:
“The reality is that music is fundamental now…on all of these devices,” he says. Apple has had a very longstanding and successful structure with iTunes.
So far, Google and the industry haven’t been able to agree on a cloud-based subscription service.
“I’ve just not been successful in doing that,” Schmidt says.
6:46 pm: Why has Google struggled with these?
The folks on the media side have had some problems, fundamentally, because they are moving from a scarcity model to a ubiquity one with perfect digital copies.
Also lots of disintermediation and piracy issues. Those are some of the reasons why these deals are hard to do.
6:48 pm: Kara: What does a Google look like in five years? Can it keep that speed up?
Schmidt: Typically, tech companies eventually become boring and middle-aged. “That’s the story of high tech.” How do you fight it? “One is you talk about it.” Other thing is innovating new businesses at scale.
The good news for Google, Schmidt says, is you can create a billion-dollar business very quickly, noting the company’s effort to build a display business on top of its text-ads business.
6:50 pm: Walt: Don’t you know too much about us?
“Would you prefer the U.S. government to regulate us?” Schmidt said.
Google, he said, will remain a place where you can do anonymous searches without logging in.
If you wish to use our services as a logged-in user, you can see a privacy dashboard and see what we have.
“We tell people what we know and we give them the choice of having it deleted,” Schmidt says.
The rub, he says, is how long the logs are retained.
Typically it is 12-18 months.
6:53 pm: “Privacy is a compromise between the interest of the government and the citizen,” Schmidt says. “The more that is standardized, probably the better.”
6:53 pm: Kara notes Steve Jobs has called Android phones a “probe in your pocket.”
Schmidt: “To be very clear, we don’t do that.”
Some discussion over where Google sucks in information and where it doesn’t.
6:55 pm: Walt says that Android tends to warn users over what information an app is collecting, but not regulate which apps do what. Is that good enough?
“What else could we do?” Schmidt said.
Walt suggests that Google could curate the market, like Apple. Schmidt says that they could, but have chosen a different path.
Schmidt won’t comment whether he was offered the Commerce Secretary job.
He says he’s very happy with his job and plans to stay there a long time.
Till death, Kara asks?
“I’d say after death if they would put the coffin in,” Schmidt quips.
6:57 pm: Schmidt says he is working with a co-author on a book on foreign policy and also expects to work in some capacity on Obama’s next campaign, though he hasn’t settled on what capacity.
7:00 pm: Schmidt says he does have some concerns about the limits of technology, including combining face recognition with other technologies. Google, with Goggles, had moved pretty far down that path, but has stopped because of the implications.
“We built that technology and we withheld it,” Schmidt says.
People could use the stuff in a bad way in addition to a very good way.
7:02 pm: Walt’s asking about the consumerization of IT. You used to spend a lot of time selling to those organizations.
Schmidt says he used to assume that would be a primary area of growth. The extraordinary thing in the last few years, Schmidt says, is the shift of computer science toward solving consumer problems.
“What you are seeing is the death of IT as we know it,” he says, with complex business-computing systems being replaced by these cloud services. “With this new technology you don’t need as much of it.”
7:04 pm: Kara: Who will the victims be?
Schmidt: Everyone has a strategy to move from the old world to the new, he notes, but it tends to be difficult for incumbents with big existing revenue streams.
7:05 pm: Kara: How do you assess where Microsoft is?
Schmidt: Microsoft is very strong in the enterprise, with a lot of its growth coming from Windows Server.
“That’s a flywheel that will power Microsoft and what they are doing…for many decades,” he says.
7:06 pm: Walt: On the mobile devices side, the chief competitor tends to be Apple with iOS. If you were a developer, a small developer, and you had to decide, what would you make your third OS choice?
“Many people do not have a third choice,” Schmidt says, referring to the amount of work it takes to develop for Android and Apple. HTML5, he says, may prove to be a unifying point.
“I’m not sure what to say about Microsoft and Nokia.” We’ll have to see what products they come out with.
As for what Nokia and Google talked about before Nokia went with Microsoft, “We would have loved and we would still love to have Nokia be an Android licensee.”
Nokia, he says, is still strong in many markets.
7:09 pm: Walt: I find my Google search results to be more and more polluted with junk, at least for certain kinds of topics. Is there an opportunity for someone to come in and do to you what you did with AltaVista?
Schmidt: We’ve looked a lot at this.
An awful lot of people try to, essentially, game the system.
He notes recent changes that the company made to affect low-quality content that was gaining ground in the search results.
The latest changes affected about 12 percent of the results, which Schmidt says is an indication of how widespread it felt the problems were.
7:12 pm: Schmidt says that social signals are important, but that there are others, such as location information.
Walt: Has Bing done anything that impresses you?
Schmidt: There’s a set of questions where Bing has done a better job, in a couple narrow and vertical cases. We have a couple of strategies to address that.
7:14 pm: What is your Job One?
Schmidt: Concerned about the balkanization of the Internet. Pending legislation that deals with the fabric of the Internet. Today, we have one Internet, with the exception of China.
“I’m very concerned that we will end up with an Internet per country.”
7:15 pm: Talk moves to Google Wallet.
Walt: Why are you getting into this business?
Schmidt: It might be helpful if we have a demo.
7:17 pm: Stephanie Tilenius is on stage demoing Google Wallet, a Near Field Communications (NFC)-based payment system which Google announced last week. (And which eBay sued over.)
7:18 pm: In the demo, Tilenius is buying some jeans at American Eagle and uses Google Wallet to send a coupon, loyalty card and credit card.
Kara: Who are the competitors? Is it Square, which will be on stage later at D? Is it eBay, which is suing?
Tilenius: No one is doing exactly what we are doing.
7:20 pm: Walt: Do you have to have an Android phone for this?
However, he and Tilenius note that it is just an app and a chip. And that chip can even go on a sticker that can be placed on the back of a phone.
“Within a few years almost all of us will be using this mechanism,” Schmidt says.
7:21 pm: Is this cheaper than buying Groupon?
“It depends on which price Groupon could be purchased at,” Schmidt says.
7:23 pm: Google is announcing tomorrow some sort of Groupon-like service in Portland.
7:24 pm: How much is Google charging?
Not charging for the app or for payments, but is taking a cut of deals.
It’s similar to what others in the space charge, Tilenius says.
7:27 pm: What is the appeal to consumers of using their phone to make the payment as opposed to just paying with a credit card?
Schmidt: Credit cards won’t disappear, Schmidt says, but Google Wallet makes it easier with loyalty cards, etc. “It’s a one-stop place of managing things,” he says.
7:28 pm: Who will the competitors be?
All the phone platforms are likely to have their approach, he says, with deal sites also likely to offer their take on this.
“This is not going to be the only solution,” he says.
7:30 pm: What characterized the Eric Schmidt era at Google? What will mark the new Larry Page era?
Schmidt says that he oversaw a period of great growth. But, he says, Larry will add much greater product rigor, much greater scale and he will move faster.
Does Schmidt still provide “adult supervision”?
“Larry and Sergey grew up along the way,” Schmidt said. “They are perfectly capable of running this thing.”
7:32 pm: On to audience Q&A.
7:32 pm: Schmidt is asked about voice recognition. Has Google considered opening up Voice Recognition to other platforms? What about Google Translation? (Google recently said it is shutting down that API due to abuse.
Schmidt: One of the issues is it has to be approved on iOS. “We don’t want to waste their time unless they are going to be approved.”
7:34 pm: What about YouTube? What is it these days?
Schmidt: YouTube is one of the most successful acquisitions ever.
The strategy has been twofold since then. One, figure out a way to monetize it. The second thing is we’ve started to fund “made for Internet only” content.
It, he says, is a huge success on the user-generated side and an emerging success on professional side.
7:35 pm: What is Google’s process for ethically deciding what it will and won’t do?
“It’s ultimately the senior leadership team” that decides, Schmidt says.
“Historically we would just throw stuff over the wall,” he says. Now, he says, Google has a relatively thorough process, with a policy representative and a lawyer getting involved early on.
7:39 pm: Data retention policies for wallet product. Will you keep transaction data for 12-18 months like with other data?
They would be covered under same rules as existing credit card policies, not Google’s web policies. We would also not use it for anything other than the express purpose the information was given to Google, Schmidt says.
7:42 pm: While I’ve been live-blogging, my colleagues have been busy. Tricia Duryee has a story on Google’s aspiring Groupon-killer.
John Paczkowski has a piece on Schmidt taking responsibility for Google’s social networking shortcomings.
And, finally, Peter Kafka has a piece on how Microsoft didn’t make Schmidt’s list of four major emerging platforms (a list that included Google, Amazon, Apple and Facebook).
7:45 pm: Schmidt waxing on what computers are good at vs. humans.
The self-driving car is not self-aware, it is just driving. It is not self-aware, Schmidt says.
“Computers are not very good at consciousness,” he says. Computers are good at remembering and suggesting things.
7:47 pm: Seesmic’s Loic Le Meur asking if Android is temporary and developers should just drop for HTML5.
Schmidt: No. More than 400,000 Android activations a day.
HTML5 is the basis for Chrome, other browsers and Chrome OS.
From our perspective, these do different things.
A possible merge point is that people will build wrappings around Java apps that will turn them into HTML5.
But “eventually” is many years from now. Any transition will be very smooth and seamless.
7:49 pm: Walt: You have Android and you have Chromebooks. How does the consumer understand the distinction?
Schmidt: There’s a possible merge point in the future, but these are different devices.
One easy way to think of it is touch devices which are mobile phones and devices (Android) and one with a keyboard (Chrome OS).
Schmidt also puts in a plug for Chrome, saying it is more secure.
Walt: What else could you do to promote security?
“You could also use a Mac instead of a PC,” he says, noting that viruses are less likely to affect you.
7:53 pm: Talk wraps up. Time to ice my fingers.