Schmidt reaffirmed his claim that Google wasn't out to just make money, but was
trying to promote a greater good. He states that concerning publisher's
problems with advertising, "It's a huge moral imperative to help
Google will certainly make a lot of money, though in the process if it
succeeds. After growing large business selling text ads, it now is upping
its graphical advertisements, thanks to its acquisition of DoubleClick, among
the internet's largest and most experienced advertisers. Schmidt said
this unified approach is the key to success, stating, "By combining
DoubleClick with that (search-ad) architecture, we can provide a single
platform for publishers that over time will begin to generate significant
revenue for publishers."
However, Google is fast finding that graphical ads, which command a price
premium are much more vulnerable to the economy. While Q1 2008 did see
significant 8.5 percent annual growth, up to about $2.9 billion total annual
revenue, this was significantly slower than the early growth rate of 16.7
Schmidt commented on Viacom's
suit against Google for its property YouTube which Viacom contends
intentionally allows or condones infringement of copyrighted materials.
He labels the claims as baseless and says that media companies like Viacom are
just insecure about Google's role as a leader in the online advertising and
media revolution. He states, “There is a sea change from one model to
another. Many of the criticisms I see seem to be merely about the change, and
Google happens to be the messenger. Those changes are going to occur
With YouTube, Google fills the shoes of both being a publisher, like Viacom,
and an advertiser. Thus it's in its best interest, it argues to make
graphical advertising work as well as possible.
Curiously Schmidt remarked that he found the fact that internet users were
getting more and more while paying less and less to be disturbing. He
states, "That's bad for Google. We are critically dependent on
Schmidt insists that despite this profit first mentality, Google is really only
using its profits as a vehicle to achieve great and noble things. He
dropped a number of statements such as, "The goal of the company isn't to
monetize everything. The goal is to change the world."
When challenged to provide more detail of what such a lofty and ambiguous goal
meant, he quipped, "For the better."
Schmidt says of his company "we don't have an evil meter we can
apply," but he says they do apply the line of thought in making their
most important decisions. He says that cofounders Larry Page and Sergey
Brin were responsible for the attitude and at first he was incredulous and
thought it was a joke. He states, "I thought when I joined the
company this was crap--companies don't have these things. I thought it was a
joke. It must be a Larry and Sergey thing. o I was sitting in a room six
months in, and an engineer said, 'That's evil.' It's like a bomb goes off in
the room. Everybody has a moral and ethical discussion that, by the way,
stopped the product."
Schmidt says Google doesn't have listen to what Wall Street says, rather,
"We respond to end-user satisfaction. We have enough leverage that
we have the luxury of time. Most businesses can't invest for scale. They
have to make money now. That short-term focus does make people sometimes make
the wrong trade-off."
While money is not usually the main objective, it is sometimes he admits.
He confirmed reports that Google held an important meeting with the YouTube
staff demanding they move the business into profitable, cashing in on its
success. His details on the plan were vague, but he stated, "We have
a revenue plan, a usage plan, a scale plan, a bandwidth plan."
YouTube accounts for most of Google's outbound traffic, so it must
start making money.
While Schmidt's comments, particularly the amount of service one, may strike
some users as a bit odd, it’s hard to deny Google's success and power.
With the internet ruled by Google for now, we can all only hope that it lives
up to its motto -- "Don't be evil" -- as Schmidt says it will.