Google on Google

At the Aspen Ideas Festival, I got up to a mic to ask Eric Schmidt a question. No, it wasn’t, “what would Google do?” I wanted his reaction to a notion I’ve talked about here that has crystallized since I wrote the book: that we are going through something more than a financial crisis and more profound and permanent than a recession. We are shifting from the industrial era – and the age of mass production, distribution, marketing, and media – to what follows, a society built on knowledge and abundance. We are seeing the collapse of the auto, banking, and newspaper industries and large swaths of the the rest of media, retail, real estate, and others to follow. We’re not going to go back; the change is bigger and more fundamental than that. “Did I go too far?” I asked.

“Yes,” Schmidt said. “But you’re good at that.” He had been asked earlier how he felt about people constantly asking what Google could and would do about this problem or that. At that moment, he pointed to me and said that What Would Google Do? did that; it took the Google model and extended it. If Google is a metaphor for thinking differently, I am happy to be it,” he said and then demurred, “Google is a simple company.”

Then Schmidt reacted to my question and this is what’s fascinating to me: He said he wished I were right. He said that too much of our resource, people, government help and attention, measurement go to the legacy players, the big, old companies. He wishes that weren’t the case. He wants that change but fears we will return to old reflex. Innovation, he said, happens at small start-ups but they don’t get the resource and attention.

I asked whether Google could be Google only because it was new. He said it was because it worked in the open internet.

He told about being an engineer before Google and seeing whole businesses start because of a regulatory porthole in telecom called the T-1, the 1.5 meg line that wasn’t regulated like the rest of communication. If that ceiling hadn’t been there, he argued, our development of digital would have sped ahead by five years.

So I’m thinking about that: My view of the coming world order may be more a manifesto than a prediction. Hmmmm.

* * *

Here are some of my tweets and notes from Schmidt’s Q&A:

* Asked how he reacted on THAT day in September, Schmidt says, “I was scared.” Google took its cash out of banks to sovereign nations’ currencies
* He says he still doesn’t understand how we got into the financial mess: “the failure of information that got us to this point.”
* On recovery: “We’re on schedule. Because the people who got us into this told us that.”
* He reminds US that Google was not part of finance. “Had we been doing it we might have been measuring where all the money was.”
* “We already had our bubble… We had a great time. Next time, I’m going to sell at the peak.” He’s doing great stand-up.
* Asked whether we can innovate out of a recession, Schmidt said “recessions end on their own & politicians love to take credit.”
* Schmidt says the ups and downs will be amplified because there is more information.
* “You do not want the government to own your company… In many cases, they will turn out to be jobs programs.”
* He says simply that he hopes people will more likely say this (house inflation, Iceland’s economy) just “doesn’t make sense”
* Q: You guys are everywhere. Schmidt: “That is our goal.”
* “I learned awhile ago that the right way to run human systems is transparency.” Problems came from information hiding.
* Brian Lehrer asks schmidt where Google is so bit it needs to be regulated as a public utility. A: “no”
* I don’t know how to solve newspapers generic problem. He says they are working on products in this arena. (No more details.)
* “The internet is a great friend to small businesses.” He says Google does not favor big businesses and big businesses don’t like that. [I say: See news.]
* Asked abot Froogle, he says, “Why did you remind me.” Why didn’t it work? “It didin’t work because it just didn’t work. We celebrate our failure in the company because we want people to take risks.” [Me: There’s the beta corporation.]
* “We love advertising.” 97 percent of Google’s revenue is advertising. “No, we love advertising revenue.” He said his board is looking for more legs to the stool and Schmidt says they do have other streams coming.

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  • If you haven’t, you should read some of Richard Florida’s writing about the shifting economic epochs and the impact of geography on the future economy. Bottom line: in order to innovate, people need to be together, and the expansion of the housing market and the economy at large over the past decades have thrust people further apart. The answer is to reconstitute social centers of innovation, Florida say.

    we are moving into a different economic cycle, inasmuch as the use of credit expansion to fund growth at a higher rate than population growth is over. We’ll need new economies to supplement our natural growth, and those aren’t likely to be industrial economies. The country needs to build exportable intellectual capital, most likely around society building areas like health care, infrastructure, water purification. And entertainment, of course!

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  • Cooler Heads

    Umm, the idea that the industrial economy is changing is hardly new. Lots of people have been writing/thinking about it for a couple of decades. They just don’t Twitter about it because you have to discuss it in more than 140 characters.

    Off-topic: I had the worst experience with Apple’s customer service yesterday. I have a three-month old Ipod that suddenly stopped working. I spent twenty minutes on hold on the company’s service line, and then went to a nearby Apple store. I was told I needed an APPOINTMENT to get service. WTF???

    If I had been ready to BUY an Apple product, well then no waiting. But if I am already a customer they treat me poorly.

    Jeff, I think Apple is the new Dell. Apple has no corner on virtue here. They’ve become big and uncaring.

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  • Perhaps you can ask Mr. Schmidt why his firm thought it was okay to put entire copyrighted books online?

  • I’m definitely of the view that this is a time of frame-breaking and of the world being remade. And I don’t come at that from an apocalyptic point of view…I think this happens every couple generations. The world was certainly remade after WWII, and I think it’s happening again. Not to say that EVERYTHING will be different, but the basic parameters of the game will be. Apples will still be delicious; California will still have great weather; everyone will still care about their family and friends, but the template for life and life paths will change. Probably a lot.

    I wrote about this with regard to the live entertainment business a few weeks back:

    and then more moodily, even more recently:

    And by the way, I think we’re in for about a decade of fairly unimpressive economic growth that’s absolutely necessary for this process to work.

  • i don’t think journalism will die but newpapers as gate keepers of information annd the future will die – but new vehicles like twitter and facebook and things not yet born will be more responsible then top down managed news which will still be somebodies views but will also be more diverse then managed news by big biz – we live in an idiotcracy where big biz is king, gov is queen and media and religion is the mistresss –

    some quotes from thomas jefferson – food for thought

    Freedom of the Press=

    “The basis of our governments being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate a moment to prefer the latter.” –Thomas Jefferson to Edward Carrington, 1787.

    “ We are to guard against ourselves; not against ourselves as we are, but as we may be; for who can imagine what we may become under circumstances not now imaginable” – Thomas Jefferson to Jedidiah Morse 1822

    “We are now vibrating between too much and too little government, and the pendulum will rest finally in the middle.” –Thomas Jefferson to Samuel Smith, 1788

  • wonkette

    Schmidt said that (as quoted by Jarvis): He said that too much of our resource, people, government help and attention, measurement go to the legacy players, the big, old companies. Innovation, he said, happens at small start-ups but they don’t get the resource and attention.

    Jeff Jarvis: I asked whether Google could be Google only because it was new. He said it was because it worked in the open internet.

    Decades from now, what happens when Google is becomes one of those legacy players, when Google becomes a big, old company and no longer a small start-up?

    • That is precisely their challenge and Schmidt said it: to keep changing and changing enough.

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