Molly: Hi, I'm Molly Wood with another edition of Cnet Conversations. Today I'm joined by Cnet senior writer Tom Krazit, as we are here at eh Google campus where we’re very excited to be speaking with CEO Eric Schmidt. Thank you so much for having us.
Eric: Thanks for having me on.
Molly: Now, I just feeling preparing for this interview like we should ask you about search right out of the gate, but honestly, it sort of feels like the search wars have been won. Do you feel like with your competitors focusing on how to display an order search results, is there an area where you're playing defense? Or do you feel like you kind of have this one well in hand?
Eric: Well, we’re always trying to make search better and we got a lot to do. So certainly not done. And if you think about it, we still don’t get the perfect answer to the right query every time. We’re trying to go from sort of what you type to what you meant. So we’re using a lot more about you, where you are? Do you have a phone on you GPS? Your search history? Those are the things to really move from sort of text to meaning. And that’s not to solve problem, and it’s something that’s a great challenge. We’re also trying to make our search index much bigger. We don’t have all the web, although we believe that our search engine is much larger than everybody else is. We’re constantly, constantly trying to get more data. More ranking, more information.
Molly: And you think going forward is realistic sort of keep putting that 70% of resources towards search?
Eric: We certainly continuing with this 70-20-10 model. That makes a lot of sense to us. If you think about it, think of all the information explosion that occurred in the last few years. We have to get that in to our index as well. We have to get all of the real time information, all the social networking information, and all the breaking news information that now drives so many people’s use of the internet. That's something we’re adding. So over and over again, there's more information to be added, ranked, and otherwise presented. So we’re not done and we’re not going to be done for a long time.
Tom: Is there a large numbers there though? Where you have some sort of, as you continuing to add more and more data to the index where in putting the 70% of resources into it, it becomes harder and harder to do?
Eric: Well, as Google gets larger, we have more recesses to apply to it. That’s not the problem. What’s very interesting, as you could imagine, hey we have enough of the web now. We don’t need to add more. We have the important part. And that’s not our view. And the reason it’s not our view is when we look at what people are looking for, they're often looking for the tail information. You would think that base on popular culture that everyone cares about the stuff that’s popular. But our data shows that people are looking deeper and deeper into the web for even specialize information. And that’s why or job is so hard, but also what we’re focusing so much of our resources on.
Tom: Okay, so shift gear a little bit. This obviously been a good year for Android, you we’re just talking a little bit about the pending Droid, everyone is waiting for theirs to arrive. This has been about two years right now since you first announce the project. Where do you see things in three years?
Eric: Well, it’s very hard to know what happens even in a year in our industry. But Android was designed as an open platform that would create a whole bunch of things at once. There will be a lot of hardware choices, there will be a lot of operator choices, there will be a lot of networks that would use it, and there will be a lot of applications that would run on top of Android. It looks like we’re on our way to getting all of that done in the next 12 months. If you look at the number of operators, the number of networks, the number of hardware devices, you have more choices with Android than you do with any other solution. And although we don’t have the most number of applications, we certainly working on that. And we’re working hard to get even more people to build the platform.
What's interesting about Android is, is because it’s a powerful operating system, it really is possible to write applications that are PC quality for your phone. And that’s I think what's so revolutionary about it.
Molly: So given that fact, actually, since Android is taking off as well as it is. And it does seem to be crossing multiple devices, what's happening with the Chrome operating system? And do you still feel like that’s something that you need?
Eric: We do, and in fact the Chrome OS is a different product and a different target market. One way to think about it is the Android is really targeted with people who are phone centric. We all understand what phone centric means. It’s a mobile device, it has a wifi connection, you carry it. If it isn’t a phone, it’s something like a phone, a tablet or something like that. The Chrome OS is really targeted at the PC netbookcentric user. And that’s somebody who uses a desk, they got a keyboard or something like that. They got a reasonable screen, and they got a reasonable processor. The uses are different and we don’t think that the two completely overlaps.
Molly: And so where do you see the Chrome operating system in three years?
Eric: Well, of course Chrome OS is not shipping yet. We hope to release the first open source versions of Chrome OS later this year. The year 2009. So it will ship sometime in 2010. And in the open source movement, the trick is to get it out at just the right amount of quality so the people then extend it. They finished it with you if you will. It becomes a better product because of the open resource movement. Sometime in 2010, we think we’re going to have a very, very effective web Chrome base operating system for netbook and netbook category devices. We think it’s going to be very successful. It’s too early to tell exactly what the issue pattern would be.
Tom: But one of the, I'm sorry Molly, but one of the interesting things about Android though is that it’s being use in a variety of different devices beyond mobile right. You’ve seen seta boxes, you’ve seen other types of things. How do you avoid conflicts between Chrome OS winds up in and what Android does?
Eric: I would prefer not to prejudge the successor products. My experience with products is that they tend to find their way. they tend to find where their niches are, what market their really do very well in. their design structures , the two operating systems are sufficiently different, that each will find the market for which it is most natural. So, sure there are people building a seta box versions of Android, we love that. That’s the purpose of open source. And I would assume that people will do very interesting and novel things with Chrome OS. Again, a great thing about open source.
Molly: So I guess what I'm wondering is, I understand the differences between the operating system, between the two versions of the software. Is there enough of the difference between the devices, I think there's a sense that the netbook category is really going to become the smart book category? Where they are expanded smart phones? And then I wonder if there will be so much overlap?
Eric: Again, I think you’re smart people trying to think about the future. The future will unfold as it does. And we will have opportunities to decide and discuss what is appropriate, what is not. Let's not prejudge what these things are best use for. Let's build great technology. Get the open source community going. Have a great application strategy. And our end users will ultimately judge. They are the judge with this outcome, not you and me.
Molly: The future will unfold and you’ll be there.
Eric: That’s right.
Tom: So speaking of future and things you smart people are working on, what's Google Wave? How would you define Google Wave? That’s the question we get a lot from our readers.
Eric: Google Wave is a similar new effort within Google to try to redefine the way people communicate primarily using email and instant messaging. And what neat about Wave is once you're in the Wave, you're usage base on our testing in our early use, is very different. It’s the blend if you will electronic mail, post its, updates, obviously there's a lot of sharing, use videos, and photos and so forth. And it looks like it’s going to be quite successful.
Again, how would we map it against the existing email systems? We don’t know yet.
Tom: Do you think there will be more growth with Wave as people are using the underlying technology to build systems versus the Google Wave, UI, and experience itself.
Eric: Well the Wave we've seen both is going to happen. That they are both a platform for people to build applications that will use this information that’s very communication centric. And also they will have a lot of users. Again, at Google, we’re happy to have both occur and its certainly growing very quickly right now.
Molly: Now it’s obvious that you're venturing to a lot of areas as a company, as we just talked about how, obviously your leads to search market gives you a lot of insights, a lot of data into consumer behavior developer behavior. How do those insights help you in terms of just introducing new products? Do you feel that you know what people want?
Eric: The link between scales, ties, and search is not as obvious as you might think. Because the search problem is so massive. So yes, we have Google insights which of course we publish and so forth, but ultimately we make product decisions largely based on our own judgment and based on the feedback that we get within local communities. We've not yet been able to harness, if you will, all of that knowledge that’s in there. And I also think it might be somewhat not okay for our customers if we started to use that kind of information for other reasons. So we've been careful to keep the information largely within improving our search algorithm. There's no question that our search algorithms get better with more information. Our ranking gets better, our knowledge gets better, and of course our algorithms are getting constantly being tuned. We also use search history to back solve or literally check the search algorithms to make sure that they're very good. And we continue to make improvements on a daily and weekly basis in search.
Molly: And do you harden past line in terms of protecting that data? Is it siloed, so to speak? Or is it kind of your best judgment as a company.
Eric: It is of course technically siloed, because it’s all in one place. But it’s ultimately a judgment decision. And the sense that we use is we use the feeling of our user. How would our user feel if this information we’re use this way or that way? And all of our indications are that users are very happy to use their data to make search better. But they don’t really want it to be use for much else.
Tom: One recent development that we've been talking about all year is sort of a combination of, some the increase scrutiny you face from the government as well as the Google books process. And we saw yesterday that the deadline has been extended for you guys to submit a revise settlement to the New York state, excuse me, New York federal judge following the meeting you had with the department of justice on Friday. And I was wondering if you could tell us what does the department of justice still objects to about the revise settlement?
Eric: I’d rather not go into the specifics of the DOJs feedback. We understand that a lot of people care about this settlement. It’s pretty important to get this settlement right. My personal belief is the settlement will be modified somewhat and then it will be approved. And so we’re doing the work necessary to get the details right. Whenever you have a settlement between roughly 20 or 25 parties, it just takes a fair amount of time for everybody to get comfortable with the details. Because the details really matter here.
Tom: Can you address some of those details that you're looking at revising from the original past?
Eric: I would prefer not to. I think this is a better discussion among the lawyers. It’s highly to hire their legal issues. From our perspective, I think it’s worth saying that we we’re the ones who we’re sued. We we’re the ones who entered into a settlement. This is the way our system works and we are happy with the proposed settlement and I hope the judge will be happy with the modifications that we make.
Tom: Why is this Google Books matter so important to you as a company?
Eric: Because the mission of the company is all the world’s information and no one has attempted to go out and get all these sort of track information stuck in library as in to a Google. And its set off a whole bunch of players if you will, people who are concerned about this issue or that issue. But for all those people who are sitting there consuming the literally millions of books of information that are now available in Google index, we think it’s crucial that this activity be continued and being legally permittable and also not just in the United States but also remember we have to deal with a non-US library as well.
Molly: Since there is this sort of government scrutiny, in general, Google Books and generally speaking. How does that affect your product development strategy?
Eric: We decided to explicitly make sure that it does not affect our product development strategy. Because we believe that as a company, we are acting in the best interests of our end users. So the way we approach a problem is we say, is this in the best interest of our end users. And usually, the regulatory issues are resolved in positive nature for the end user. Most of the complaints seem to be inspired by either industrial structure issues or competitor issues. And those are your appropriate compelling to take a look at. But as long as we’re benefitting end users, we think we’re going to be just fine.
Molly: That leads pretty nicely actually to, I want to talk to you a little bit about evil. I often see you get asked about this notion that you can make money as a business without doing evil. And it seems possible that once you get to a certain size, you may always be evil to someone or you may have setup what? Is an impossible standard and I guess, I was just wondering if you ever wish you hadn’t put that in there?
Eric: No actually, we’re very happy about the evil or the lack of evil comments. My own view on Google and where we are now is it we are facing the kind of criticisms that you're referencing because we are a company that is a disruptor. And we are also a company of significant scale. And I think we all agree to that. And we are in the information business and people care a lot of information for many legitimate reasons. And by the way the rule is different from country to country. So we have to deal with different standards, different social standards, different cultural standards to what people want.
So from our perspective, the principle of do no evil was not a rule in the sense that there was a defining line and you may do this and you may not do that, but it was more a practice. That If something appears evil, it’s okay in our culture for an employee of any kind to say anywhere, to say I think that’s evil. And it forces the conversation. So it’s a way of our culture, if you will, correcting around, maybe we’re making a mistake or maybe we’re too aggressive here or we’ retoo greedy here or what have you. And as long as we’re focus on end user benefit, we should be just fine.
Molly: And so interesting because it feels like that’s always been your position and yet you make people kind of nervous. What do you think it is about Google at this point that makes people feel generally uneasy with? A lot of user question just saying, I'm scared. You have all of my stuff. Are you skynet? What do you think it is, is the size? Is it the information?
Eric: I think it’s a combination of size and scale, and we work hard to communicate our values a company. We also make it easier for people who are dissatisfied with Google to leave Google. We have the strangely named Did A Liberation Front Group, whose job is to get information out of Google and to our competitor’s systems. So we think that consumer is not only can trust us because of our public statements, plus if we violated them we would be sort of destroyed in the media and our brand. But also, we would do it for other reasons, good moral reasons. And finally we want to keep them as a customer. We make it easy for them to search.
Tom: I wanted to just go back to the evil notion for a second and just ask real quick. Has your cultural definition of evil change as you’ve grown from a smaller company focus almost exclusively on search to a company that is doing so many different things right now?
Eric: The significant change I think has been the globalization of the company. Because there are things which are not evil in America which are evil in other cultures.
Tom: And vice versa.
Eric: And vice versa. So there had been a number of cases, which I’d rather not go in to, where we had robust conversations, if you will. Where an employee or a group say, look this is just wrong. But it’s okay with American sensibilities, and vice versa. And we've taken the position that we are a global company, not just an American company. We have to represent and respect that. Certainly, the China decision, which is very controversial at the time, but I think ultimately the right one for us, is another example of a tortured internal discussion which ultimately came to roughly the right outcome.
Molly: I think this is sort of a user question. We had one user saying, and I’ll just quote him directly, I use Gmail and Sketch Up, Google Earth, Google Voice Mail and more and then of course Google search. I Google much more than that, I would be dead in the water if Google we’re to go down or start charging fees or get hacked or start trading my data, and it really sort of led to this question among users is Google too big to fail?
Eric: Well, the good news is we’re not applying for a too big to fail bailout from the Fed.
Molly: That’s a relief.
Eric: The most important thing is we don’t want Google to go down. We work very hard to keep it reliable. We always want to be available to this user. And we want to make those product even more useful. In every one of the products that you named, we got significant investments around. New features, new functionality, which is consistent in developing the brand. And from our perspective we are able to fund this incredible investment from our very successful advertising business. And we also believe in advertising. That advertising provides real value. That our wide base or paper performance base ads are useful whereas generic ads probably not very useful. And it’s the twin pillars, if you will, of focusing in the end user and then having relevant ads that are user focus. But I think it has really propelled Google systems.
Molly: Now obviously in the Google data base, almost everyone probably has one or two Google search result that they sort of wish would go away, I'm sure that you have a very stern policy about this. But users wondered if you're, is it sort of like dating a police officer who can do something about your traffic ticket? Have you ever had to enforce a policy against altering search data?
Eric: I'm sure that in the scenario with the police officer fixing the police ticket would be illegal, we have a similar rule at Google which we don’t do those sorts of things. We’re also very careful to forget, if you will, search information after a specific time, generally about 18 months. The question if you're information being retained by Google, is not really at this point a Google decision, it’s really a political or public policy decision enforce by different government in different ways. Our view and our general approach is to let you have control of whether this information is retained. And that’s what we want to get to. The laws may or may not allow us to do that.
Tom: So as you move forward with this goal to organize and make the world’s information accessible, can you digitally index every single piece of information in the world? And if you do, where do you take that from there?
Eric: You could have imagined indexing all the pieces of information in the world until the real time information explosion. Mathematically, with the growth of the web, it could’ve been possible for us to reach all of that information and get into sort of the event horizon in the scale of the internet. It’s pretty clear to me now that every single person is a broadcaster, a publisher, a blogger, and paparazzi. And the scale of that problem, right, with their mobile phones, all of the real time information, real time location information and so forth. It will be incredibly difficult to get all of that information in any one place. And I'm not necessary it’s even possible.
Molly: So you're going to need that 70% after all. We want to thank you so much for joining us today on Cnet Conversations.
Eric: Thank you so much for having me.
Molly: It’s been nice being here at Google. And you can of course get in the conversation yourself Cnet.com/conversations as well as watch this interview and all the previous ones. Thank you so much for joining us.
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