Peter Kafka

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Eric Schmidt Can’t Wait for Self-Driving Cars, Won’t Predict When Google Maps Come Back to Apple

You wanted new news from Eric Schmidt about the state of the Apple-Google war? So did all of us. But the Google chairman was mostly mum on that subject. He was happy, however, to tell Walt Mossberg and Kara Swisher about how “life changing” it was to ride in a Google-built self-driving car. More below:


Greetings from Manhattan’s Upper East Side, where Google Chairman Eric Schmidt is sitting down for an interview with AllThingsD’s Walt Mossberg and Kara Swisher.

The last time these three chatted in public, at the D9 conference in May 2011, they had a wide-ranging conversation, and you should expect the same here.

If I had to guess I’d predict we’ll hear quite a bit about Google’s relationship with Apple, for starters, as well as Schmidt’s take on privacy, politics and the state of the technology business in general.

But we’ll find out right now: I’ll be liveblogging the event below, and you should be able to see a livestream of the event at the top of this post, courtesy of our hosts at the 92nd Street Y.

8:03 pm: Good evening! Looks like the livestream is working, with a delay of a few seconds. Excellent news.

8:05 pm: Some introductory remarks from outgoing Columbia J-School dean Nicholas Lemann.

Walt and Kara are both Columbia grads, hence the connection.

8:09 pm: And we’re off and running.

Disclosure from Kara: She is married to a Google executive. You can read all about that here.

Mossberg: Two years ago we talked to you and you brought up this “Gang of Four” idea. The most influential tech companies. Please expand on that, and update that.

Schmidt: Something unusual has happened. All four companies are networks/platforms generating enormous scale effects. We’ve never had that before: Facebook, Amazon, Apple and Google. All different, all competitors, all making enormous investments.

Swisher: You left out Microsoft:

Schmidt: Deliberate.

Swisher: Still four? What about with Facebook’s troubles?

Schmidt: A billion users is still a really big deal. You can do a lot with that.

Swisher: We talked to AOL’s Tim Armstrong today and he talked about a war between these big platforms.

Schmidt: These companies are all run by smart people. With respect to identity, one of the mistakes we made on the Internet was we never gave you a reliable way to say who you are. Facebook emerged as the best way to do that. But all of the companies will have some form of identity solution.

Mossberg: What Armstrong was getting at more was about these vertical stacks in the cloud: Messaging, content, all this stuff gets tied into one platform or the other. All that stuff is sticky. And Armstrong isn’t running one of those, so what becomes of him?

8:16 pm: Schmidt: Facebook has Facebook Connect, and Google+ is doing something analogous.

(Now a technical discussion of iMap which seems to confuse most people in the room except Schmidt.)

8:17 pm: Mossberg: So you guys all have these different identity systems. Facebook is based on identity …

8:18 pm: Schmidt: The focus shouldn’t be on lock-in for identity, but the huge race for all these other features on the platform. We argue, for instance, that the Chrome browser gives us a huge advantage when it comes to the cloud.

So basically your phone is a front-end for a supercomputer.

(Schmidt now explaining the origins of the word “cloud,” which has to do with whiteboard scribblings.)

8:20 pm: Time to talk about maps. Schmidt: “Apple should have kept our maps.”

Mossberg: But Apple says you didn’t give them all the features they wanted.

Schmidt: “Apple decided a long time ago to do their own maps … [now they’ve] discovered that maps are really hard.”

Swisher: What argument could you make to Apple to keep your maps?

Schmidt: They’re better maps.

Mossberg: Are you going to make your own iOS map?

Schmidt: Don’t want to pre-announce products, but if we made one, they would have to approve it. … They haven’t approved all of our apps in the past. (Schmidt allows that the two companies are always in communication.)

Mossberg: Why did you keep Microsoft out of the Gang of Four?

Schmidt: They’re a well-run company, but they haven’t been able to bring state-of-the-art products into the fields we’re talking about yet.

8:23 pm: Schmidt: The Android-Apple platform fight is the defining contest. Here’s why: Apple has thousands of developers building for it. Google’s platform, Android, is even larger. Four times more Android phones than Apple phones. 500 million phones already in use. Doing 1.3 million activations a day. We’ll be at 1 billion mobile devices in a year.

Schmidt: We’ve not seen network platform fights at this scale. The beneficiary is you all, the customer, globally. “This is wonderful.”

8:25 pm: Compare this to the PC industry. Phone user population is six billion, one billion smartphone users. Much bigger than the PC industry — maybe a billion, 1.5 billion installed.

Every month, quarter, year, the growth rate of mobile adoption exceeds everyone’s expectations. The phones become so useful that “it’s good enough for normal people” in lieu of a PC, for day-to-day events. Years ago, “people like myself, we missed that.”

8:27 pm: Schmidt: Facebook is attempting to become the world’s communication hub. Off to a good start. Amazon wants to be the world’s store. All of these guys compete, but they also link up in different ways.

8:28 pm: Swisher: But Google is in everyone’s business. There’s Google Play, that’s Amazon. There’s Google+, that’s Facebook.

8:29 pm: Mossberg: All of them overlap but Google overlaps the most.

8:29 pm: Schmidt: We’re trying to solve material problems in the world. Judge us by our solutions. )Schmidt jokes about making a tech news site, but insists Google will “not cross the barrier” of getting into the content business — which would be news to the people in the YouTube world.)

8:30 pm: Now we’re talking about Gangnam style.

8:30 pm: Swisher: One of your former executives, Marissa Mayer, is at Yahoo, which is in the content business. What do you think of that business for her? And do you think you can do a search deal with her?

Schmidt: We’d certainly talk about it if Yahoo wanted to do a search deal. But our last attempt to do that got kiboshed. And I assume they have a “pretty binding” deal with Microsoft.

8:32 pm: Mossberg: The FTC and others are looking at you. Today there’s a story that says they’re now looking at “standards-essential patents,” which if I understand correctly are patents that are so basic that they’re supposed to be licensed to everyone, and the allegation is that Motorola has not been doing that.

8:33 pm: Schmidt. I can’t talk about it because I don’t know the details and “because it actually just gets me too upset.” Patent wars are a disaster for all of us. Everyone can find prior art for everything. So the new trick is to get judges to block devices country by country. It’s bad for innovation, it’s bad for choices.

Schmidt: We are now spending hundreds of millions of dollars to fight these fights against patent trolls, and we’re winning.

Swisher: You’re buying patents, too.

Schmidt: Yes.

8:35 pm: Mossberg: Why did the jury find for Apple?

Schmidt: I don’t know enough about it. I know that Samsung is very upset. … It’s better if I don’t comment on the jury’s decision.

Schmidt: The victims here are not Google and Apple. It’s the little companies that can’t acquire patents to protect themselves.

Swisher: You said it annoys you?

Schmidt: I was trying to use a non-binding phrase.

8:37 pm: Mossberg: In a few weeks we’ll see something historic. Microsoft will have built its first computer, with Surface. Running a Microsoft OS. That’s a huge change for them, because they were always licensing operating systems to other people. What does this mean?

Schmidt: “It means a lot if the product works.”

Mossberg: Let’s say it does.

Schmidt: “My answer stands.” Microsoft built a structural monopoly around Windows. “Produced enormous value, and a series of antitrust cases, which they lost.” So is that the right model to solve problems? I would argue that we’ve evolved to a new model, like with Android. “We’re going to see an explosion of integrated hardware/software solutions.”

Mossberg: Can some other company make a truly integrated device that’s comparable to what Apple does and Microsoft is trying to do?

Schmidt: Google is doing that with Chromebooks.

Mossberg: Yeah, but they’re made by someone else. Now you own a hardware company, Motorola. So when will we see a “pure” Google phone that they made?

(Schmidt argues that it’s already happening because Motorola is a subsidiary and is working on phones, etc. A non-answer.)

Swisher: We talked to Samsung when you were buying Motorola, and they were not happy.

Schmidt: We’re not going to give Motorola an advantage of over Samsung.

Mossberg: Why would you do that?

Schmidt: Because we want lots of partners.

Mossberg: So are you saying you can’t both license software and make your own products?

Schmidt: No, that’s what we’re doing.

Swisher: You guys have vast ambitions. I think about you like the Borg. What is the end game? In the beginning you wanted to collect all the world’s information.

Schmidt: We want to be in the center of the information revolution. “The world doesn’t need more copycat products; it needs innovative products.”

Apple has the cash, people and scale to do what Google is trying to do. Not sure about Facebook and Amazon.

(Some jokes about Google Glass.)

Swisher: What are you doing with self-driving cars?

Schmidt: Why don’t we celebrate innovation? “Don’t you want a car that drives you?”

Swisher: I’m not sure I want a Google car. … Still, what’s the goal here?

Schmidt: Let’s talk about cars. “It’s really an error that we’re allowed to drive the car.” A computer can obviously do this better “once we get a few bugs ironed out.” There are 30,000 people killed on American highways. It’s a terrible tragedy. If there’s some way we can help, that’s a good thing. Most likely scenario is that the car manufacturers end up using some of the technology, and we’re in talks with them.

Same thing with Google Glass — we don’t know what it will be like for other people to be able to use this technology, but we’ll find out.

8:48 pm: Mossberg: One day Sergey Brin dragged me into the “holodeck” at Google. It was pretty cool.

Swisher: What’s your life like right now?

Schmidt: I spend a lot of time on airplanes. Very interested in the effect of all this technology on society. Publishing a book on this next year. It’s overwhelmingly positive, but we have to look out for stuff, like when autocrats misuse this stuff.

Morale in the U.S. is the lowest it has been in decades. That’s a demographic problem, a global problem, and an automation problem. That’s the underpinning of all of these debates. The only solution I can come up with is innovation.

8:51 pm: Schmidt: Like everyone else, I’ve come to the conclusion that the only way to fix this is by education. The gap between the elite and everyone else when it comes to technology is getting greater and greater. We need to make that gap shorter.

Mossberg: Are you a proponent of using technology for online education “even at an elite institution like Columbia”?

8:53 pm: Schmidt: I describe all of the online education efforts today as version one. Think about the early iPhone. So much has changed. These are all glimmers of what will be possible.

Q&A from the audience:

Q: Please comment on HP’s struggles and prospects.

Schmidt: Meg Whitman is very capable, and she’s identified that this is a multiyear turnaround. Hard for me to opine on it. “It’s very easy to criticize a company that you’re not in.” When I used to be at Sun, “we had lots of time.” The industry is so competitive now, there’s no time. If you’re off by a week, you miss millions of dollars. It’s very hard to stay on that curve.

Q: If you had to be a CEO again, would you choose Apple, Amazon or Facebook?

Schmidt: I was on Apple’s board, and I’ll always have a soft spot for them. I was very good friends and very close to Steve Jobs, and we miss him dearly. Jeff Bezos has made remarkable moves. And again, Facebook has a billion users.

Mossberg: So which one?

Schmidt: Which one has the most cash? That would be Apple.

Q: When will we have mainstream self-driven cars?

Schmidt: “I’ve been driven in one, and it’s a life-changing experience.” We call it driverless, but it’s better to think of it as car autopilot. There’s a big red disconnect button, and I think that will always be the case. You’re always going to be sitting behind the wheel.

Q: Apple gets huge margins selling phones. What will reduce that?

Schmidt: Competition.

Q: How will you compete in Asia and China specifically?

Schmidt: We want to continue to serve customers everywhere. Building out in Korea. We’re not No. 1 in four or five countries and we’re working on that.

Swisher: What about China?

Schmidt: China has this “hellacious law … true, hardcore censorship.” When we entered China, we agreed to do this, but we’d publish the fact that this information was omitted. But we would cache the content, and China would get mad and just cut off our access. Untenable.

I think that’s roughly where we are. We have a pretty good export ad business in China, but that’s about it. I can’t imagine their new leaders calling me up and saying, “Oh Eric, we apologize.”

Q: Future products and services?

Schmidt: We don’t talk about those.

Mossberg: Okay, what about this. Let’s talk about technology in general. There’s the smartphone, and now there’s the tablet. So what’s the next big thing?

Schmidt: More mobility. Mobile first. Now companies build mobile applications first, Web apps second.

There are “acres and acres” of start-ups building powerful stuff for mobile. The underlying structure here is big data, and when you have all of this stuff connected, you can do interesting stuff. Amazon is starting to do it. We’re getting closer to “true AI.” Imagine your house and driverless car, and all of these basic tasks are taken care of for you by AI. You can see that now by looking at young people today who live on the Web, and get all this information from Twitter, and we’ll be able to get everyone to get all sorts of information that way.

Mossberg: How long will that take?

Schmidt: Don’t know. There’s an 80/20 problem where the 20 percent we haven’t figured out is the most crucial part.

This will apply to biomedicine. Pills that will Wi-Fi out your basic medical condition, could alert your doctor “that you’re about to die, come to the hospital.”

Swisher: Would you buy Twitter?

Schmidt: Can’t talk about M&A. We had Twitter in search results and that fell apart but I’d love to get that to work again. We now have a competitor of sorts in Google+.

Q: How do you deal with environmental costs of the server farms that power the cloud?

Schmidt: We have the world’s most powerful data centers. “When you’re in them, it feels like you’re in a submarine.” We’ve done many many things to make the impact less, and we think ours have half the impact of other data centers. If we get better at this stuff, people will be more efficient, and the servers will be more efficient, and “hopefully this will be a net positive.”

Mossberg: Let’s talk about journalism. Are you worried about the future of journalism?

Schmidt: I have been for a long time. There are a couple of success models, and they all use new models: Politico and Huffington Post. Incumbents will move to subscription models, because they understand that. So what does this mean for journalism?

1) Extra money that used to be generated by the “unholy alliance” of print, classifieds, etc. That’s at risk, has been for a while. “That’s a real loss” at a city level, and an investigative level, etc.

2) And what happens to the brands? The top brands remain quite strong. The mid-tier regional brands have become not as relevant. So one idea is “the new brands will be much more celebrity driven.” So the ultimate structure may be traditional brands, and celebrity driven brands, and I have no idea what they will look like, but people will follow them.

Swisher: Like the Ashton Kutcher Daily?

Schmidt: Or the Jay-Z Post.

Swisher: What about Google buying some of these companies, like the Times?

Schmidt: We decided not to cross those lines. One day I was talking to Larry and Sergey for quite some time about getting into the refrigerator business. And it took me a while to realize they were joking.

9:15 pm: And we’re done. Thanks for following along.

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Another gadget you don’t really need. Will not work once you get it home. New model out in 4 weeks. Battery life is too short to be of any use.

— From the fact sheet for a fake product entitled Useless Plasticbox 1.2 (an actual empty plastic box) placed in L.A.-area Best Buy stores by an artist called Plastic Jesus