Eric Schmidt at the ASNE NewsNow 2010 Ideas Summit

Uploaded by Google on 12.04.2010

>> I have the pleasure of introducing tonight's speaker, a man whose name draws roughly 3.5
million results when you Google it, that's somewhere between Lady Gaga and Rupert Murdoch.
Many of the search results credit Eric Schmidt for helping lead Google's phenomenal growth
since he joined the company as CEO in 2001. Today, Google has a market cap of roughly
a $180 billion. Google searches number three billion a day. YouTube which the company bought
in 2006 is a video powerhouse that draws a 100 million views a month. Two years ago,
Google went forbore into mobile introducing a new operating system for cell phones and
its latest big project according to the widespread reports, involves a partnership with Intel,
Sony and Logitech to bring web technology and ultimately web advertising to our television
sets. Author, Ken Auletta, in his new book, Googled: The End of the World as We Know It,
says Mr. Schmidt has been a good fit for Google. He had management experience as the chairman
and CEO of NOVEL and before that he was Chief Technology Officer at Sun Microsystems. He
has a degree in Electrical Engineering from Princeton and a Masters and Ph.D. in Computer
Science from the University of California, Berkeley. Auletta says Mr. Schmidt should
be recognized for helping broaden the company's products and particularly for investing aggressively
and smartly in its international business. He says, Mr. Schmidt has figured out how to
employ disciplined decision making without squelching the company's youthful exuberance
and adding unnecessary rules. Google's most famous rule of course is "Don't be Evil,"
although inside the company they treat it more like an official and unofficial slogan
than a rule. "Don't be Evil" is a principle that seems to guide many of the company's
decisions including its decision last month to stop censoring Google searches in China
and redirect users to its site in Hong Kong. But not everyone sees the company as beneficent
or even benign. As Google has grown, it has faced increasing scrutiny for antitrust and
competitive issues here and abroad. Last year, the company dropped its plans for a proposed
ad partnership with Yahoo after the justice department threatened to file suit to block
the effort. Privacy rights advocates complained Mr. Schmidt is dismissive on the subject of
government's spying on search engines. They were particularly chagrined a few months ago
when he told the television interviewer if you have something that you don't want anyone
to know maybe you shouldn't be doing it in the first place. Others complained the company
takes their work without paying them that includes a group of artists who filed a Federal
lawsuit against the company last week. And as you know it includes newspaper executives
who have complained loudly that the company has stolen their content, made millions on
their backs and is forcing them to erect pay walls. Mr. Schmidt has said that newspaper
shouldn't blame Google for their problems and he suggested that the industry can dig
itself out by becoming more innovative by focusing on its customers and taking it better
advantage of the web. Tonight, he'll be talking about what he sees as the big trans that are
shaping the Internet and some of the lessons he's learned about how to navigate the constant
pace of change that the web has engender. Please join me in welcoming tonight's featured
speaker, Eric Schmidt. >> SCHMIDT: It's an honor to be here and I
am very happy that you guys have come back to do your conference because what you do
is credibly important. I'm a reader. I love newspapers. I love that, the notion of actually
reading them and when you're finish with them you feel like you have--you're done, you know
you've sort of know what's going on. I love the notion of discovery that the newspapers
represent. That all of the things that I didn't know yesterday, that I now know today because
I finished the three papers that I've read today already. On and on and on, the role
of newspapers are fundamental, not just America but to all around the world. We have goals
in common. Google believes in the power of information. We believe that it's better to
have more information not less. We also understand that information can annoy governments, it
can annoy other people. But then ultimately the world is a better place with more information
available to more and more people. And the flow of accurate information, diverse use,
the debate that we're so use to is really, really fundamental for functioning democracy
as the previous speakers I think so eloquently said in their remarks and the examples in
the things that they're doing. You all get criticized all the time. On the left you get
criticized for being too liberal, on the right, you get too conservative, you get it? In our
case, we just get kicked out of China; it's the same thought, right? The--you know--and
I wanna be clear here, that we're not in the news business and I'm not here to tell you
how to run a newspaper. Work could be [INDISTINCT] us and trust me if we run--we're in charge
of the news, it would be incredibly accurate, incredibly organized and incredibly boring,
right. Here's an art to what you do and if you're ever confused as to the value of newspaper
editors, look at the blogroll that's all you need to see, right. So we understand how fundamental
your mission and the things that you care about are. Had the Internet in many ways is
certainly one of the most destructive technologies in the course of history. It's certainly up
there with, you know, the water systems, and electrical--the electricity use to be the
systems of the world and that sort of thing. It is disruptive in a particular way in our
world because it has replaced economics and scarcity with the economics of abundance.
And all of us, I think, are dealing with some of the consequences of that. And any industry
that's built on controlling information literally preventing people from getting access for
information for whatever business reason, he's facing the issue of the broad and ubiquitous
nature of how digital information goes. We all understand all of this example. And it's
interesting now that users are speaking out with their time by moving online. All the
evidence and all the examples are like they come up with in preparing for the speech indicate
that there's more news being consumed online than there is in newspapers. And you're familiar
with this statistics of 61% of the people get their news online and 50% get it on traditional
local newspapers. And it's interesting that there's so much duplication now. One of the
questions was how much is new reporting versus duplication. The estimate that I found indicated
that at about 80% of the stories have absolutely no content whatsoever. And of the 20%--fresh
content--half of those come from newspapers. Do you want to understand how important newspapers
are? You are basically the majority of the con--of the quality of the content and of
the creative force. You understand intuitively, it's also mathematically true. So, in this
sense the web can ultimately be very good for news. You think about it. You have more
readers than ever. You have more sources than ever for sure. You have more ways to report,
and new forms of money will--new forms of making money will develop and they're underway
now and I want to get some examples of that. So we have a business model problem, we don't
have a news problem and that's ultimately my view for all of us who're trying to get
through because we're all in this together. Now as Oscar Wilde quote, "In America the
president reigns for four years, but journalism governs forever and ever". And I think it's
important to understand how fundamental the Fourth Estate is to the functioning of our
democracy. And the question I wanted to ask was, "What's really new now?" I mean we've
always had newspapers, we've always had scandals and political problems and, you know, local
news and this problem and that problem, celebrities and so forth and so on. There is in fact one
thing that's quite new; what do our parents know now--what do our children know now that
our parents did not know when they were the age of our children? They know about now.
They know about precisely now in a way that our parents' generation did not but this nowness;
drives everything. The sense of immediacy that is so fundamental and by the way for
those of a certain age seems overwhelming. But the fact of the matter is, is this nowness
that drives everything. But what happens is that you experience the reality of the moment
in a way it's much, much more intense. And you see this when you look at young people
who have so many diverse sources of information, all the visual devices and so forth and so
on. And it's creating a problem which I'm going to call sort of the ursatz experience
problem. But on the one hand, you have a sense of connectiveness to everything, literally,
every event globally and so forth. You all live this so you understand this very well.
But you also have a false sense of the actual experience but you're not really there. So
the trade off is you know everything but you're not physically in any one place, and that
shift is actually pretty profound one in a way society is going to consume media and
news and so forth and all of us are part of it. Google's obviously moving this very forward.
So when you turn off your digital device, every single person here in this room has
a mobile phone except for a portable computer--it's some sort of a device. If you turn it off
right now, what am I taking away from you? That sense of connectedness. It's okay you
can turn it back on now, it's fine. I know it's tough, right? But just for a second there
you thought, oh my God, he's going to turn off my Internet connection. When did that
happen? When did the Internet become so important that it was so fundamental? Well, I would
argue that it occurred naturally and that is a permanent change for all of us. So how
do we manage this transition? Well, the obvious reason is to think Internet first because
in fact, if you, when you design the businesses today, you would design them differently than
the way they were designed 50 or 100 years from now. And, it's important to understand
that three things are coming together in--and I'm going to give you some examples to this.
That the powerful mobile devices that we all talk about the--and the new ones everyday,
Google of course makes [INDISTINCT] of others are paired with the tremendous performance
that we can now get on computers that are on the back end. Literally, web servers as
you call them, but they're really super computers. And the combination of the client, literally
the mobile device and the powerful servers and then the powerful network the people have
spent the last 20 years developing which you know is the Internet but it's really a set
of ways in which you get to this broad data network. It is the sum of that and the capabilities
and the technologies that looks [INDISTINCT] some of that would define the next 10 or 20
years for all of us and I have some examples of course. So when I say Internet first, I
mean mobile first. What I've noticed in my profession is that now some of the most clever
engineers are working on mobile applications ahead of personal computer applications. The
people are literally moving to that because that's where the actions is, that's where
the, the growth is, that's where the--there's--it's a completely unwashed landscape. We have no
idea where folks are going to go. And it's interesting that mobile web adoption is growing.
We look at this, you know, you look at historical patterns for Internet adoption. The mobile
web is being adopted eight times faster than the equivalent point in the regular Internet,
so that would confirm, confirm my numbers. Half of all Internet, new Internet connections
are coming to mobile devices at one kind or another. One out of three people read news
on their mobiles--on their phones literally. And if you think about it, so Google is busy
making the Android phone, we have the Kindle, of course and we have the iPad. Each of these
form factors that the tablet represents sort of--in many ways your future--oops, that would
open together. And you said and you'll say, "Well I have a strong opinion about one or
the other." But there's another person who likes the other, and another person who likes
the other. So when you think about what has going to happen with newspapers, this is the
future. And the way which people build application, the way people use these facilities are really,
really quite subtle. If you look, the most recent, one of these of course is the iPad
and the iPad, there are number of very, very compelling iPad applications that were built
by organizations represented here in the room. Each of which represents a different experiment
and how you'll consume news and the way that it's targeted. So, why are these devices different?
I mean why are they not just more expensive version of a newspaper after all newsprints
has been around for a long time? They're personal and they're personal in a really, really fundamental
way. They know who you are. So imagine that the next version of the newsreader will not
only know who you are, but it'll know what you read and it won't repeat itself. The newspaper
that I get doesn't realize that I read it yesterday or not. And it will be more interactive,
and it'll have more video, and it'll be more real time because of this principle of now.
And furthermore it will integrate all of my sources together; the freedom to tweet which
is a wonderful headline by the way. It will integrate them on a way that it's only, only
imagined a little bit today. So it is the union of that, the personalization, the media,
and the ability to integrate that will drive so much together. Now, when you think about
the stories, in our case, we have gone a couple of things, we just go Google Fast Flip which
is another way of on the Web looking at pages very quickly. People love it; it's working
very, very well. But work with a number of publications to do things which are generally
known as living stories. We're not only do you have the information but you also have
the links, and the history, and the structure which again and can be, can be shown on any
of these devices and many, many others. So, when I go to a new site, I want that new site
to know me. To know about me, what I care about and so forth. I don't want to be treated
as a stranger which is what happens today. So remember me, show me what I like but also
I want you to challenge me. I want you to say here's something new; here something you
didn't know. Here's an opposing view error, in case you want to read it. We know from
studies that about two thirds of people will not choose that way, but we also know that
one third will. We want to get to that one third as well the two thirds and give them
a choice as well. One of the questions that you ask when you look at [INDISTINCT] today
is how do people consume news? How do they make decisions when a lot of it is social?
In the statistics about social consumption are really phenomenal. We're talking about
Facebook and Twitter already which was excellent. One out of every six minutes spent online,
it's been inside of the social network today. You wonder why are these things so important
if you don't use them yourself? The two girls who are trapped in a culvert in Australia,
ages 11 and 13, who updated their Facebook web status to say where they were and they
were rescued; they understand the power of a social network. Or the gentlemen who was
terribly trapped in a Haitian shopping center and was not able to get out who used his iPhone
application to study how to bandage his arm until he was ultimately rescued, that's a
person who understands the power of social networks. These are very, very real and very,
very powerful and the sum of mobile plus social means this union if you will has a lot of
implications or how news will be consumed and so forth and so on. What's interesting
by the way is that if you just take a simple example of tweets. The Twitter revolution
and the Iranian revolution seemed to go together. The re-tweeting of an initial tweet, roughly
20 times re-tweeted by a single person can create a revolution. It's no different by
the way than word of mouth. It's just faster because that principle of the now; the principle
that it all happens right now. It's interesting that this device has a one gigahertz processor
on it, the iPad similar. It's a thousand sun workstations. I remember 20 years ago here
coming to Washington D.C. to do one of the first in, you know, installations of that
for $15 to $20 million of government, government and partner expenses. Today I have it in my
hand, and it's very, very inexpensive. We obviously sell them so I have a bias. But
my point is, think about what's happening in that period of time? The same thing is
true about the Cloud. Remember I showed the severs? What's happening in the Cloud is just
enormous amount of information is getting in there. And the--we can use that Cloud.
How does? A typical example, Google translates over a 160 million web pages everyday, okay?
No big deal, right? People use it all the time. Most of us most love it in English no
big deal for us. While we launched on April 1st, always the best date of launching new
product by the way, April Fool's Day; a translation feature in our browser which automatically
translates every page you go to. On the slide, so now all of a sudden, I mean, they're obvious
examples you've been read the leading Hebrew newspaper next to the leading Arab newspaper
in Cairo and compare it to further more everyone else in the world who can as well. All of
a sudden, one percent of the web services, web's content is in Arabic with five percent
of the population speaks Arabic. Right, there's another example where we can help balance
and help people understand each other. If you think of it that way then all of a sudden
every Internet viewer in the world is your reader including people who do not speak English
and that's a pretty profound accomplishment. What are some other things you can do with
the Cloud? Well, we have on our Android phone as true with some of the other phones as well,
you could take a picture of something and we will use the parallelism of the net. We'll
go to a set of servers and they'll vote as to what it is. Is it a menu? Is it the Eiffel
Tower? This is a picture of a person? Is it something we don't know? They vote and they
figure it out what it is most likely. Try it, it's called Google Goggles; it's another
example. You can take a picture and have a large set of computers do something that is
just amazing. You can't do it–-you just can't do it yourself anymore. Another example
would be Google Voice. Most people do a voice search by having a taxonomy essentially on
the phone where, you know, you speak and it does a little calculation and it says, "Oh,
here's what he said." We don't do it that way. Instead, we take the strings of voice
and we send it to a thousand computers operating parallel. They all think at the same time
and they send back. In parallel they vote and then they send back the answer. It remarks
remarkably well. Another example of the power of the Cloud. Now, the Internet is about scale
and the same phenomena occurs. I was studying this because I tried to figure out how big
this thing is. Between the dawn of humanity in 2003 roughly 5 exabytes of information
was created. An exabyte is roughly a million gigabytes, so think about it. We generate
that amount in every two days now. So you understand why it's so painful to get up in
the morning? It's because in one day, we, at that rate, we have calculated or generated
half of the entire human consumption of information that occurred in the entire history in half
of that time. It's amazing. If you scale that, the current forecasts are on the order of
667 exabytes a year in 2013. So there is a data explosion and the data explosion is overwhelming
all of us. Of course, this is good business for people like Google and others who try
to sort of sort all this out. It's interesting that the Internet pretty much connects every
device to every other device in the planet now. They're on the order of 600 million servers,
right. God knows how many devices in it but it's in the many, many billions. So, all of
a sudden, you have as your source literally everything. So one way to think about the
model is it's possible to instrument the entire world exactly the way it is. So, you as a--if
you're a political leader, you want to know something, well, everyone has a phone. You
could answer their phones with their permission, of course. You can actually measure things
in real time that you couldn't before. You just-–it used to be you'd write some report,
ask three people, make something up and off you go. Now you can actually figure it out
and figure out whether what people are saying is really what they're doing which is always
an interesting question, again, with their permission. So if you think of it in this
context, you have this explosion of mobile devices, you have this connection and so forth,
what does this do for the business world? Well, it's obvious that advertising which
is the Google--the business that Google was in is going to do very well in the space because
advertising works well when it's very target. Well, these devices are very targeted, okay,
so we can give a personalized ad. Furthermore, Google and others are busy building what are
called display ads that look an awful lot like the ads that are in traditional newspapers.
And in fact, there's a lot of reasons to believe that the display ad business will start to
grow fairly quickly with some new technology that we and others have been invented, inventing.
So you have a situation where not only were you have text ads which is where, we've got
Google to where it is today, which you have the leaders in display ads business Google
with a challenger today but, hopefully doing very well on that in the next few years that
you should be able to do very, very successful display advertising against this kind of content.
You may not be able to do it against murders, right, this is very difficult so we get the
right targeted ad in that case where you got to advertise a knife, you know, it's obviously
terrible, and I'm not trying to make to make a joke about it, but it's a real business
problem. But the sum of what you do and clearly, you clearly can do is the same as what you've
seen before. But the other thing that's happening is you have the ability to get subscriptions
and we and others are working on [INDISTINCT] ways in which subscriptions can be bundled,
packaged, and just deliver. You can see this today with the two examples, the Kindle and
the iPad, both of which have essentially a subscription model which you can test. You
can actually find out what would people pay for this and eventually that model should
have higher profitability because there's lower cost to goods, right? Because you don't
have the newspaper, the printing cost, and distribution cost. So there's every reason
to believe that eventually we'll solve this and ultimately, ultimately it brings some
significant money into this thing. What I like though is that those are two specific
examples of, of really thinking much bigger. What could you do--go back to the Cloud, what
could you do this really interesting? I found some examples. The St. Petersburg Times won
a Pulitzer Prize for a website that they built. The fact check, the 2008 Presidential Campaigns,
it's the first time a website's ever won a Pulitzer Prize, pretty phenomenal, so an example
of a scale that they could do. They're over 20 organizations that are cooling primary
source materials in somewhat called document Cloud. Many people here remember using this?
And again, people are helping each other using the collaborative tools of the web to do their
job better. Now, this is wonderful. It's another example of using the Cloud, using the power
of social networks. So I would tell you that the right thing to do is to figure out not
to do things statically but rather to continue these experiments and do them with even greater
industriousness. A Ralph Waldo Emerson quote is that, "Don't be too timid and squeamish
about your actions; all life is an experiment". On the Internet, there is never a single solution.
Everyone wants a simple answer. It's like, you know, you watch television in the cable.
There's always a simple answer to every question, right. We all understand what--why that isn't
true. Life is in fact the series of complex judgment decisions. Shades of gray, if you
will, based on your point of reference, your belief system, things you care about in a
legal system. The fact of the matter is they are not simple answers to any of these questions,
and in order to really find them, you're going to have to run some experiments. You can do
lots and lots of different things. I would tell you that, that the attitude should be
similar to what we have able to do, to prototype early and often, to gather and analyze data,
and then iterate because you can instrument everything. If you don't have readers in one
area, we can figure out why because we can actually watch and see they went to this site
and they didn't go to that site. It's possible now to figure these things out in a way that
you could never before. So if that is an attitude, you can actually try to figure what people
really care about, and figure out a way to get the product to be better in what they
really want. And in this, to me, allows new forms of story telling to emerge which is
I think ultimately what we're all about. We're all about an area of a narrative of ideas,
a narrative of excitement, a narrative of fun. And there are lots and lots of examples
to this which I won't go through. So, when you, when you think about it, think of it
as experimentation not just at the product sense, but also sort of the consumption sense
because ultimately, it's about the reader. And the good news is you have lots of readers,
and they're spending more and more time looking at your content. We know this because your
markets are global now. They've been translated in every language that we can reach almost
everybody. Now why is this so hard, right? Why is has been so difficult for, for all
of us and I say it together, I think it's because the will to find borders that defined--everyone
square pass, including mine by the way--are essentially gone because of the invention
of the Internet. That there's sort of pre-Internet world had its structure, you know. There was
this room, and this, so forth and so on. Everyone is now your reader, as we've discussed. You
can reach anyone anytime, anywhere, on any device. But everyone is also your competitor,
and that's where the hard part comes. The various to entry, as we all understand, are
basically zero, and there's an awful lot of low quality stuff that's happening as a result.
We have to solve that problem over time. But also, everybody is your partner because you
can collaborate in the way that you could never before. Figuring out when to compete,
when to collaborate, when to go solo, when to work in a group strikes me as one of the
sort of key questions for all of you to think about; I don't know the answer by the way,
but I know that you'll a combination answer to make it right. I am convinced the high
quality journalism will triumph because I am convinced that it is essential to the functioning
of modern democracies and I've also believe that the only proper way to run a country
is some form of modern democracy. You see lots of examples of why--of why that's true.
We need you guys to, to triumph. We need what you do to, to count and to be a larger share
not a smaller share of the voice. To me, technology--and I'll finish up by saying, technology allows
you all to talk directly to your users in a way you couldn't before. They're busy relaxing;
they're busy consuming; they're busy learning; they're busy having fun. It's the new now.
They want to know it right now, and you have an opportunity to go and really drive that
and make that happen. So thank you very much. We're done.
>> Mr. Schmidt has agreed to take questions. As our usual practice, we like to reserve
the questions. For ASNE members, please identify yourself and your organization.
>> SCHMIDT: I am happy to take, take, any questions. Yes, sir.
>> PIMENTEL: There was this, a Ricardo Pimentel, Milwaukee Journal Sentinel. There was a Supreme
Court ruling this last week, Comcast versus FCC and there's a phrase banded about net
neutrality. Can you tell us what that phrase means to you and what it should mean to us?
>> SCHMIDT: Thank you. First was this--the phrase net neutrality is being used by lots
of different people to mean different things. Sir, I appreciate the way you the question.
We have said, and indeed I and our friends at Verizon where I have written some joint
App ads on precisely, precise to this issue to try to define it. We have a problem on
the Internet that it's possible to overwhelm the Internet by, you know, one or two actors,
and so there's a legitimate need to--if you will manage the data type. In other words,
no, we don't want to have video overwhelming everything else. It's the typical way this
was expressed. What we are concerned about is that the people who run the Internet might
use that excuse as an opportunity to then promote, for example, one video over another.
And this could roughly be the same argument that if you own a media company, you would
only allow that media company to be available over your television stations, right. Just
a bad model, you know. Imagine if Sony that, and they don't do this. If Sony's televisions
could only receive one kind of program, it would be bad for everybody. So we think it's
important that whatever regulations ultimately get, put in place, and I'm sure there will
some, guaranteed that within the same class of service, we, operators, do not favor, we
are okay if they want to discriminate against one category against another. So video, they
want to say, video used to be prioritized lower than voice for example. But within video,
a typical example, we don't want them to censor one by charging for one and not the other,
that kind of thing and that's what we've been arguing for a long time. I think our view
is with the--everything we've--to be able to figure out is our view is pretty much where
the American people are. People want choices. They understand that there are some issues
around our capacity and so forth, so they want some, some thoughtful way of doing that.
On the specific--I'm not a lawyer, I don't understand the specific reasoning behind the
decision, but I'm sure that they're--ultimately the Internet will have some kind of rule like
I'm describing either enforced on it or done by agreement among the key players. It's just
too fundamental. You can't have the operators picking the voices. It's just the bad decision.
Yes, sir? >> GLASS: Good evening. I'm Andy Glass, I'm
an editor of Political Here. >> SCHMIDT: Exciting.
>> GLASS: There's a lot of concern in our business and in the public at large that the
government is broken. It's not functioning well, and a piece of that is the role of money
in politics. So, my question is with regard to the Internet and particularly social networks
which you've cited, do you see the possibility that social networks will reach out to some
extent the role of money in politics and empower people to participate in politics in a way
that does not require the huge sums that television consumes and frankly, newspaper ads as well.
>> SCHMIDT: It's, it's, obviously, a very good and important question. We have some
data that would--well, the first question I was asked is, what's different now from
50 years ago because the government was broken 50 years ago and 100 years ago too. Our democracy
is designed to be kind of broken. I don't know if you sort of study it. The whole notion
is that the States have all the power, the Congress is deliberative, the Presidency is
limited, you know, there all sort of reasons why it was designed that way 200 years ago.
We--it was forget that it was designed to actually have this pros--property. I think
if you look at the Obama campaign as opposed to the Obama presidency, you see a very good
example of how the social world could be used to affect political chain, and roughly it
went like this, and I was a supporter of Obama in the camp--as a matter of disclosure; the
people know that. Before, when he was a challenger to Secretary Clinton, now Secretary Clinton,
he had no money, he used the Internet to raise his profile, and this is so very cleverly
and got himself organized. Once, he was a significant campaigner, he had to have field
operations so he built that too. He knew how to do that from his previous experience. He
did that again very, very well. What was interesting was that that was not sufficient, that eventually,
in the latter part of the campaign, he also, in order to win the presidency, spent hundreds
of millions of dollars on traditional advertising. So the answer to your question is that the
social media and the Internet are probably, they're very helpful with people who are poorly,
poorly funded. But, money really does matter and although it does give an opposing view
if you will a platform, it does give them a way of being heard that ultimately the power
of money and politics remain very, very important. So I would argue that, that the social media,
that the Internet really did make a difference, because it ultimately created a choice, but
ultimately it was the traditional mechanism that deliver it. I think that's a rough, a
rough reading. A couple more, yes, go ahead. Very good.
>> PAULSON: First of all, I'm Ken Paulson and I want to gradually understand you're
taking in China. I am, I am curious though because everything you read is that every
other corporations want to look the other way. And, is this a matter of you'll be the
only one out there standing on principle, or that it's only a matter time before China
overplays its hand with other corporations? Are you a little surprised you have not more
support from others on this? >> SCHMIDT: It has going as, as we expected.
Google is an unusual company. As I think it's well written by, by your reporters. And, we
have the sort of principles of the company were set out pretty early when we went public.
We have the ability to make decisions without a lot of short term financial focus if we
decide to do that. So all of the usual reasons why you would, you would be concerned about
not operating in China are not so important for us. We were able to make a decision based
on principle and I would expect it most other companies either don't agree with our principles
were more likely they agree with our principles, but mechanically they can't do it. And so,
I suspect that you won't see a lot of others but there's always, there's always possibility.
Yes, sir? >> STERNBERG: Bill Sternberg with USA Today.
Let me follow up on Ken's question. How long do you think the so-called great firewall
of China can last and who ultimately wins the army of sensors or an army of smart Internet
users trying to get around those sensors? >> SCHMIDT: I like the way you phrased it,
because it is a battle and in China the battles are large because lots of people on both sides.
We know that there is a reasonably large group of people within China who are seeking non-sensitive
information. We also know that the great firewall as you call it not only exist but there's
an awful lot of ways in which the various people who run it are trying to make it stronger.
I think it's too early to say. I don't think we know you know, and I think that if I were
to make my own prediction, I would be accused of having my own global bias. I've learned
from my Chinese friends that they have their own biases on this. And I would encourage
you all to view this not so much as through our first amendment issue, but rather in a
how does a society wish to grow and how well the Chinese citizens ultimately decide how
they want to run their country because ultimately, ultimately the Chinese citizen will win. It's
important to know that there's a lot of evidence of public support for some of their policies
which would not be true in the United States. So that's again where, where you can't give
a simple, hey you know it's obvious, kind of an answer. Go ahead, yes, sir.
>> MITCHELL: Thomas Mitchell, Las Vegas Review Journal. I was curious on one thing you indicated,
you said there's a way now that you can give someone who has an opposite point of view.
I've been concerned for a long time about the polarization of the country, I guess,
like the Amazon concept. Do you like this book? Here's 500 books just like it. Do you
think that that's... >> SCHMIDT: Yeah.
>> MITCHELL: There's a way for them to more--can you, can you develop on that concept a little
bit please? >> SCHMIDT: Yeah. The simplest answer is that
we--there's something called collaborative. In computer science, there's something called
collaborative filtering, and roughly what happens is that we want to give you a set
of choices and so we look at who your friends or people who like you are and we look at
what they're doing, not you. We rank what they're doing, we sum all the things that
they're doing together and we show you the things that are most likely. To the Amazon
book recommendation which is a fund service by the way is a classic example, people like
you. What it turns our that mathematically you can also do the inverse of what I've just
described. So people who were very much not like you, like this because it's mathematically,
it's just the other, it's the other, other set. And so it's easy to do and it will be
harder to surface the really cogent arguments, the ones that changed their view because it's
hard as, you know, as you know as editors just always, it's always hard to see that
incredibly crisp argument that really changes people's minds but that would be our goal.
Yes, ma'am. >> CHAN: Hi, I'm Sharon Chan. What do you
say to publishers like Rupert Murdoch who feel that companies like Google should be
paying the producers of the content for the content?
>> SCHMIDT: I think it's best to look at Rupert's comments as in the context of a business negotiation
because he's a very good businessman. A couple things to know, all the people who complained
about that have the option of putting a file called a robust text file in their website
which will absolutely prevent Google from getting access to that information. And it's
absolutely their right, it's absolutely their content. We don't want it if they don't want
us to have it, that kind of thing. We're not trying to take it without it. So, in most
cases people have decided to give us that information and even people who are operating
behind pay walls have decided to give us some of information, because we send a lot of traffic
to their sites. So, on the one hand, we're evil because--according to this people because
we are a sort of causing a modernization on the way. On the other hand, we send enormous
amounts of traffic to their websites. People come to Google first. We send them right to
there. We don't try to keep them. And so my view is that what we want to do is we want
to monetize those users. And there was--we're going to send a lot of people to the sites
that are representing here in the room. We want you to have tools and technologies which
will allow you to make a lot of money from those users, because ultimately we need more
money going into the system. Sitting here and dividing up the money where the strips
in revenues are going down, the circulations going down, it's a bad business. Much, much
better to get people so excited about this new form of content, that they're willing
to shell out, you know, a significant amount of money. And that's probably given that Rupert's
context were in the context of a business negotiation. That's probably all I should
say. Okay. >> Yes my name is Robert Lavigne and about
a month ago, the motions came out in the YouTube suit against Viacom.
>> SCHMIDT: Yes. >> And in the--in Viacom's motion, what you
see is emails and instant messages that look at a pattern of YouTube, doing the least it
possibly could under the digital millennium copyright act, to get copyright and content
off the site. In Google's motion which it tried not to release, it says that, you know,
how can we know what Viacom only Viacom put some stuff up there? That's obviously not
true of a lot of other organizations such as the Premier League and most notably for
this audience Roberts Warren, Independent Los Angeles Journalist. When YouTube executives
were asked about their memories of stuff, they did not find their emails. And Larry
Page did not remember, according to the motion, whether he had favored buying YouTube. How
does that square with Goggles motto of "don't be evil"?
>> SCHMIDT: Wow, well. First place, you're asking me about something which is actively
being litigated. So I want to be careful to give you an answer that's not a direct response
to the legal challenges that you made. Our response to what you just said is in the filing
that we gave, which sounds like you've actually read. It doesn't sound like you believe it.
And as you understand, these lawyers basically argue against each other with large billing
fees to both firms. So part of the strategy--part of the strategy here is to let that go on
for a while I guess. But the fundamental principle that we're trying to establish--let me answer
you question without so specifically on YouTube, because I really don't want to answer something
which is so actively being litigated. What is the role of copyright? What is the role
of a fair use? Sometimes I feel like we have lawyers and I can't figure out there's even
one school that teaches people fair use and the other school forgot to teach them that,
right? And there are disagreements at a fairly fundamental level of what we think is a very
fundamental principle. In the case of user generated content, the problem that we have
is understanding who the real owner is? Now you cited a couple of examples of specific
people that you know to be legitimate in real and I'm sure that's correct. Our computers
don't know that and furthermore, they don't know that you're real. Now I know that you're
real but our computers don't because you could be a computer impersonating yourself and you
could be lying to us. There's all sorts of reasons why we don't really know. To them--so
for many, many reasons we need the copyright holder to validate that the copyright is real.
And one of the issues in the Viacom case if whether that principle occurs earlier. By
your question, your bias if I could stay in your question. You may not understand that
all user itinerary consent is, if Google fails, losses the Viacom case, it puts in question
all of the user itinerary content which is the majority of the content today. Because
if humans have to validate who the owner of the content is before it goes up, it will
change the entire way in which the internet works. Furthermore, if those humans work for
me, how will I know how to them who the copyright holder is or not. And there are the challenge--let
me just finish. I see your question about Larry Page, I don't know what he's testimony
was and I did not read it. But I can tell you that at Google, we work collectively,
so I want to give you a precise answer. At the end of the day we all agree. Okay, you
want to answer that clarifying question? That's fine. Go ahead.
>> Humans bet different things which I obviously understand. I'm just curious, isn't that what
Google video did for a while before you had purchased YouTube?
>> SCHMIDT: Again, a very precise legal question, and the answer is no. Do we have other questions?
It's like we're pretty much--it's like we've run out of time anyway, thanks very much.
>> Thank you. >> SCHMIDT: Thank you very much.