Google Inc will launch its service to bring the Web to TV screens in the United States this autumn and worldwide next year, its chief executive said, as it extends its reach from the desktop to the living room. CEO Eric Schmidt said the service, which will allow full Internet browsing via the television, would be free, and Google would work with a variety of programme makers and electronics manufacturers to bring it to consumers. “We will work with content providers, but it is very unlikely that we will get into actual content production,” Schmidt told journalists after a keynote speech to the IFA consumer electronics trade fair in Berlin. Sony said last week it had agreed to have Google TV on its television sets, and Samsung has said it was looking into using the service. The announcement comes less than a week after rival Apple unveiled its latest Apple TV product and will intensify a battle for consumers’ attention and potentially for the USD 180 billion global TV advertising market.
Google is bowing to the demands of three European governments and says it will begin surrendering the data it improperly collected over unsecured wireless networks
Eric E. Schmidt, Google’s chief executive, told The Financial Times in an interview in London that within the next two days, the company would share the data with regulators in Germany, Spain and France. The data is thought to include fragments of personal information like e-mail and bank account numbers. Google had previously resisted requests from European officials and privacy advocates to hand over the data, saying it needed time to review legal issues. Last month, Google revealed it had been inadvertently collecting 600 gigabytes of personal data, saying that the roving, camera-mounted cars in its Street View program had collected not only photographs of neighborhoods but snippets of private information from people whose personal Wi-Fi networks were left unencrypted. In Thursday’s interview, Mr. Schmidt said that the software code responsible for the data collection was in “clear violation” of Google’s rules. Mr. Schmidt also said that Google would make public the results of internal and external audits of its Wi-Fi data collection practices.
Back at the dawn of microblogging time, when Twitter had only just started, there were only three users who mattered: Biz Stone, Evan Williams and Jack Dorsey – the three key people behind the service. Now there are more than a hundred million users – but the key influencers in this huge network can be quite easily identified.
Now the team at Information Architects have decided to come up with a neat Twitter visualisation akin to The Independent’s classic 1992 “How the universe began” graphic, of the top 140 Twitter influencers, “sorted by #name #handle #category #influence #activity” and by when they joined the service (which determines how close to the centre they are).
The size of the blob indicates how many followers; “influence” is measured by… actually, they don’t explain, though possibly it’s using something like the Twiinfluence algorithm.
Interesting to see who’s in there: Stone and Williams, of course, but also latecomer Marissa Mayer (VP of search product and user experience at Google), who only joined in July 2009, and Eric Schmidt, CEO of Google (December 2009) – and of course there’s always Bill Gates, who didn’t get on board until January 2010. And of course Stephen Fry and indeed Jonathan Ross.
You can get the PDF (1.1MB) or buy it from them for $99 because, as they remark, “we’re convinced that our print is way superior to what you can do with your plotter”. And you will need a plotter – the graphic is 84cm by 119cm.
Google Inc, the world’s biggest search engine, has been in a two-month standoff with Beijing over restrictions on the Internet and Google’s claims that it and other companies were hit by hacking from within China.
The company’s chief executive, Eric Schmidt, said last week he hoped to announce soon an outcome from talks with Chinese officials on offering an uncensored search engine in that country of 384 million Internet users.
Many experts have doubted China’s ruling Communist Party would compromise on censorship, and on the weekend the Financial Times reported the talks had reached an impasse and Google was “99.9 percent” certain to shut its Chinese search engine, Google.cn.
“Our forecast has always remained firm that once Google announced it would not accept censorship, then it was nearly impossible to imagine a scenario either where Google didn’t act on that or the government accepted their position,” Mark Natkin, managing director of Marbridge Consulting, told Reuters.
A critical commentary on the website of the official Xinhua news agency appeared to assume that Google’s pull-back was a certainty.
“The planet won’t stop spinning because Google leaves, and Chinese Internet users will still remain online without Google,” said the Chinese-language comment issued on Sunday.
“In the past, China’s Internet developed very well without Google, and we can be sure that in the future, it will also develop in the same healthy way without Google.”
The New York Times reported on Monday that Google’s online partners in China had received a government notice on what to do if censoring stops, warning them not to follow the U.S. company’s example.
China obliges Internet operators to block words and images the ruling Communist Party deems unacceptable.
Abu Dhabi is gearing up for a gathering of old and new media leaders from east and west this week which it hopes will establish the emirate as the undisputed hub from which media companies can tap into the growth offered by Arabic-speaking markets. The inaugural Abu Dhabi Media Summit has drawn some of the industry’s biggest US names, ranging from Rupert Murdoch, chairman of News Corp, to Eric Schmidt, the Google chief executive with whom Mr Murdoch has clashed about online content. However, its backers note that they will appear alongside challengers from faster-growing markets, such as Sunil Bharti Mittal of India’s Bharti Enterprises, Mohammed Omran from Etisalat, the Emirates telecoms group, and Mehmet Ali Yalç*ndag of Turkey’s Dogan Media. The executives have been drawn by underdeveloped media markets with demographic and digital growth dynamics that their home countries may never offer again, according to Karim Sabbagh of Booz & Co, the consultancy. The Middle East and north Africa represents “one of the few markets where media [revenues are] still growing in double digits, even in traditional spaces”, he said. The region’s media and entertainment markets should expand from USD 14.1bn in 2009 to USD 26bn by 2013, Booz estimates, while broadband subscriber numbers should grow at 30 per cent a year for the next four years
The European giants that pioneered the mobile telecoms industry are now stumbling in the wake of American and Asian rivals
When Eric Schmidt, chief executive of Google, takes to the stage in Barcelona on Tuesday evening to deliver the keynote address to hundreds of mobile phone industry executives gathered for the Mobile World Congress the industry’s biggest trade show, the message will be clear: well done, Europe, for getting mobile communications this far. We’ll take it from here.
For two decades, Europe’s mobile telecoms sector has considered itself to be a world leader. It had the biggest names, the technological knowhow, the most customers. Over the past year, however, that hegemony has been smashed. At a time when Europe is mired in economic turmoil and facing a demographic timebomb, one of its great hopes for fuelling future growth is slipping away.
“Europe has become the ‘flyover states’ of the mobile industry,” says a senior European executive, referring to the disparaging term used to describe middle America by high-powered business travellers shuttling between California and New York.
“All the service innovation is being done on the west coast of the US, and all the manufacturing and technical innovation is being done in the Far East. All we’re doing is selling other people’s products.”
His customers now care only about access to services such as Google, Facebook and Twitter on their phones, and the devices they covet are the iPhone or the latest BlackBerry, which has proved a great hit with teenagers. This year’s hot handsets, the executive says, are being made by HTC, the Taiwanese manufacturer, which will use this week’s show to unveil its latest devices, featuring Google’s Android software. While Apple lords it over the high end of the market, China’s Huawei and ZTE are creating cut-price smartphones that will democratise the mobile internet in the coming years.
Sensing the change blowing in the wind, even Microsoft’s chief executive, Steve Ballmer, is turning up in Barcelona to front the software group’s latest attempt to break into a market that it was once shut out of by Europe’s gatekeepers, Nokia and Ericsson. As for Apple itself, the iPhone maker would never do anything so vulgar as actually appear publicly at the event, or have a stand in one of the eight exhibition halls; but its executives will be in town, holding meetings behind closed doors with suppliers and networks as it looks for more wireless partners to back its latest invention, the iPad, outside the US.
After a week in which the turmoil in Greece has shown the fragility of the eurozone and a new acronym, “Pigs”, has entered the economic lexicon as a harbinger of doom, the evidence the Mobile World Congress will provide of Europe’s loss of control over the mobile phone industry is a harsh blow.
It leaves European policymakers, many of whom have bought in to the idea that the future lies in the creation of innovative technologies, to pin their hopes on new areas such as green energy or fall back on old stalwarts such as biotechnology. But the green sector has yet to prove the breakout success that will give Europe its own version of Silicon Valley, while biotech has always been the saviour that never quite seems to arrive. After the dotcom crash at the start of this century, biotechnology was looked to expectantly, especially in the UK, as the next big thing. In America, meanwhile, graduates from Stanford and drop-outs from Harvard were quietly getting on with building Google, Facebook and Twitter.
The impressive lead in mobile communications that Europe once held over the rest of the world was created by the European Union. In the 1980s, when wireless communications went mass-market, America’s Motorola vied with Finland’s Nokia and Sweden’s Ericsson for dominance of the nascent global market. Europe’s players were handed the advantage when the EU officially adopted and set aside specific wireless spectrum for a digital mobile technology called GSM.
The first networks appeared in 1991 and overnight the European technology players that had helped create the standard had a huge market. Seeing its success, other countries soon adopted GSM, expanding the market for Ericsson, Nokia and others throughout the 1990s. Even America’s largest network, Verizon Wireless, is switching to the super-fast version of GSM later this year. So where did it all go wrong?
“As soon as the mobile business opened itself up in such a way that internet technology could become available on mobile networks, that was the end,” according to Mark Newman, chief research officer at Informa Telecoms & Media. “Maybe Europe had a chance but it blew it, in my view, because there are too many sets of interests, each so obsessed with their own sphere of influence that they could not co-operate.
“You had operators and device manufacturers never pulling in the same direction, and I cannot see any way in which Europe can regain the ascendancy. Essentially the future of communication services is that people want access to the cloud of services called the internet.”
The industry did see it coming. It tried several times to create a mobile internet that was not going to be beholden to the American giants. In the late 1990s, a pared-down wireless internet service called WAP was being pushed by several GSM operators. Customers, many of whom were used to dial-up internet access, were unconvinced and soon started summing up the service by replacing the “w” with “cr”.
A few years later, O2 tried to create its own mobile web by importing the i-mode standard from Japan. Again, it was a dire failure. When the “true” web started turning up on the next generation of 3G phones, the operators tried to keep their customers within “walled gardens” – as they were called – creating content portals that offered customers what the operator thought was the best of the web. Usage was paltry. Having spent billions buying licences to run 3G services, the operators had to prove to investors that there was consumer appetite for mobile internet services, so they demolished their garden walls.
Ironically, the operators’ initial intransigence over the mobile web brought both Apple and Google into the industry. The former saw a way of bringing the vertically integrated approach that had worked so well in music – where it controls both the device, the iPod, and the store, iTunes – into the mobile market. The latter made its move because it feared that the combined effect of Apple and market leader Nokia could shut it out of the mobile internet altogether.
In fact, Google needn’t have worried about Nokia because the runaway success of the iPhone changed the game. The arrival of the 3G version of Apple’s device a year and a half ago dramatically altered the mobile industry and proved that consumers, given the right device, will do much, much more than use their phone to make calls and send texts.
Nokia is still the largest mobile phone manufacturer in the world. But the Finnish giant, a former rubber boot manufacturer whose success created hundreds of millionaires and helped pull the country out of recession when the Soviet Union collapsed, has been sideswiped by the success of Apple and the encroachment of Google’s Android platform. It has been forced to make Symbian, its own software platform, free to developers and handset manufacturers, as Android is, and last month took the desperate decision to give users of its smartphones free access to its satnav services to make its devices as attractive as the iPhone. Only three years ago it spent €6.5bn on the map firm Navteq but it is now effectively giving that intellectual property away as it tries to protect its market share.
The crisis into which Nokia has been plunged by Apple has pushed it into bed with another American giant, Intel. The two companies will use Mobile World Congress to announce new microchips that Nokia hopes will help it to compete with HTC’s latest devices. Apple already has its own in-house chip design team, having bought fellow Californian company PA Semi two years ago.
Ericsson, meanwhile, spun its handset business into a joint venture with Sony. However, after initial success with ”featurephones” based on Sony’s Cybershot (camera) and Walkman (music)technologies, Sony Ericsson’s share of the billion-device-a-year market has collapsed under the onslaught of Apple and BlackBerry, halving from about 10% three years ago.
But it’s not all doom and gloom, says Olaf Swantee, who runs Orange’s mobile operations across Europe. He reckons that Europe’s big mobile phone operators, such as Orange, Vodafone and O2, have the opportunity to leverage their huge customer service bases to get themselves back into the game.
“Yes, the [US] west coast and Asia have really taken very strong positions,” he admits. “If you take equipment manufacturing, companies like Huawei have grown really strongly and we have seen traditional software manufacturers like Google and Apple enter the mobile market as it becomes a more software-driven environment. But, as the market moves to a more mature phase, what is becoming more and more important is the customer interface.”
The importance of direct customer contact, whether that be through shops or call centres, was proved this year when Google launched its Nexus One mobile phone. It sold it only through its website, and those customers who had problems with the phone had to email Google, rather than talk to its network partner, AT&T. Many found themselves waiting days for issues to be dealt with.
In the race to increase revenues – not least to pay for the network investment required to deal with the traffic generated by devices such as the iPhone – the mobile phone operators have the chance to claw back money from the likes of Apple and Google, which aggregate other people’s content through their iTunes and Android marketplace stores.
“Once the markets top out,” says Patrick Bossert, director of strategy at global billing services expert Convergys, “and growth slows and margins get tighter, then those aggregators will be looking to solutions for local-language customer care and marketing.
“They cannot afford to establish a base in every market in which they operate, but the service providers are already there. They may not have a lot of leverage now but, boy, do they have a lot of assets that are actually quite desirable.”
It’s a theme that the GSM Association, which represents all these networks, will be picking up this week as it tries to wrest some of the initiative back from Google and Apple.
“I don’t feel that we are being left behind, but there are areas that the mobile operators need to address,” says Michael O’Hara, the GSMA’s chief marketing officer. “And getting their assets into the developer world, finding a way to get into the value chain, is really key.”
Being great at customer service is hardly the white heat of technology, but for Europe it might just be the start of some sort of fightback. For now, though, the story is going to be – for home-grown talent, at least – depressingly familiar. As Informa’s Newman warns: “In 2010, Apple is going to make hay. I can’t see anyone catching them up this year.”
Hillary Clinton calls on Beijing to answer ‘serious concerns’ over internet security
The US government is investigating allegations of a Chinese hacking attack on Google amid what Washington called “serious concerns” over internet security.
The strike, which the company said was aimed at uncovering information linked to political dissidents in the country, led Google to announce last night that it would no longer censor its search engine in China.
The move could result in Google being forced to pull out of China four years after it controversially announced its intention to launch a censored version of google.cn, the local version of its search engine.
Faced with a conflict between one of America’s most powerful companies and the Chinese government, the US secretary of state, Hillary Clinton, called on Beijing to discuss the situation.
“We have been briefed by Google on these allegations, which raise very serious concerns and questions,” she said. “We look to the Chinese government for an explanation.”
Clinton, who is about to begin a tour of Asia and the Pacific, said it was important for businesses and governments around the world to be able to operate online without interference.
“The ability to operate with confidence in cyberspace is critical in a modern society and economy,” she said.
Barack Obama has called internet security a “national security priority”.
Clinton is expected to give a speech in Washington next week outlining new policies aimed at curbing online crime.
The White House has just appointed a new head of cybersecurity, charged with improving the country’s online defences, which have come under constant attack in recent years.
Hackers have attacked government computers in Washington, London, Berlin and elsewhere – in what some experts say is an orchestrated campaign that is sponsored, or at least permitted to take place, by officials in Beijing.
On a visit to Shanghai in November, Barack Obama said filtering information was not compatible with modern life.
“Unrestricted internet access is a source of strength and I think should be encouraged,” he said.
Google’s strongly worded statement – in which it said the conflict “goes to the heart of a much bigger global debate about freedom of speech” – may push the issue further.
Google’s senior figures have close relations with US government officials. Its chief executive, Eric Schmidt, was an adviser for Obama’s election campaign and last week he was among guests at a dinner with Clinton to discuss how technology could be used to promote democracy.
The state department said it had been briefed on Google’s plans but Google’s head of corporate communications, Matt Furman, told the Guardian that the state department had not had any direct involvement in Google’s decision to drop its censored search results.
It would not be unprecedented for the US government to intervene. In June, officials in Washington contacted the internet messaging service Twitter asking it to push back planned maintenance so that news from the Iranian protests could spread
It was in May 2008 that Eric Schmidt noticed something rather odd happening in the world of Google. His analysts could not quite pinpoint what it was, but the all-important “metrics” measuring advertising revenue from each click on a Google advert were travelling south.
“The sequence for us started in May — we started seeing some strange things in Britain,” the Google chief executive said. “In particular the way that our ad system auction was working was not quite right. It was as though we weren’t making the right amount of money on every one of our clicks. We measure the amount of revenue we get per click. What was happening was we were getting the same number of clicks and less revenue.
“We couldn’t figure out why. Was it that people weren’t buying? We initially thought it was our error. Was it possible to make a mistake? Through the summer it was obvious that something had changed. It started in Britain in late May and I remember sitting there thinking what the hell is going on? Is this a trend, is this something unique to Britain? We now understand that it was a shift in consumer behaviour that was an early indication of what was to happen in banking.”
That early warning system is one reason why Google has become a lodestar to the economic world and why Schmidt, one of the most powerful CEOs in the world, will be listened to more intently than most when he arrives at the World Economic Forum in Davos at the end of the month.
Schmidt is co-chairman of this year’s Forum — the meeting of the very, very great and very, very good that reads like a Who’s Who of global business. Among those meeting in the Alps will be Bill and Melinda Gates, Howard Stringer, CEO of Sony, Sir Martin Sorrell, chief executive of WPP, Larry Page and Sergey Brin, Google’s founders, Lloyd Blankfein, chairman of Goldman Sachs, a sprinkling of royalty, a whole cadre of economists and academics and a fair few politicians including David Cameron and Tony Blair.
As co-chairman, Schmidt, along with Peter Sands, the CEO of Standard Chartered, will be expected to lead on the key themes of 2010 — a world coming out of the deep freeze of the financial crisis and looking to see how robust the green shoots of recovery really are.
But, first things first, to understand the future you must first understand the past. Otherwise, the danger is you simply repeat it, not as farce but as further calamitous mess. And no-one can afford that. Schmidt says he knows who should be in the cross-hairs of those who seek to pinpoint blame — his own country.
“I want to be clear here that the blame, to the degree that there was, is largely in the United States, not in Europe, not in Britain,” Schmidt said. “And it was fundamentally because a low-interest policy created too much money. It was an easy-money policy and eventually an easy-money policy catches up with you.
“Remember what happened. Through a series of events in the mid-1990s, Congress increased the supply of credit for home mortgages, through the institutions Fannie Mae and Freddie Mac. They were essentially given too much money for political reasons.
“And then that was followed in New York by the repeal of Glass-Steagall which then allowed banks to use investment equity vehicles to create liquidity which creates very large amounts of money. So the banks are busy creating money and making a lot of money on that creation of money and the regulators were either, depending on your point of view, asleep at the wheel or did not have the tools to understand what was going on.”
Schmidt has little time for those who complain that we are now entering a dangerous period, a period in which market freedom is replaced by state and regulatory intervention. For every moan the bankers utter there are a million people who have lost jobs, or livelihoods or businesses, he argues. Bankers should stop shouting into the wind.
“The number of people who were hurt by the activities of the financial industry is so large, it is very hard to have a lot of sympathy with that industry given the high-flying nature of its behaviour,” he said.
“Remember, many of these institutions privatised the gains and socialised the losses. [You could say] that the banking industry should not be regulated but it should also be able to fail — that’s called capitalism. It is very easy to understand. You’re a banker, you make a loan, and if you screw up you lose your job and the firm is liquidated.
“But if you pick any one of the financial companies [involved in the crisis] that is not what happened. What happened was the regulators decided that the pounding of the financial industry would have paralysed the world because of the inter-linking. I think that argument is correct.
“If your assumption is that there is a greater and greater concentration of large financial institutions that are too big to fail, well, they need to be more regulated. You cannot have a situation where you only win and do not lose in capitalism. At Google, if I lost $10bn in one day I would like to lose my jacket.”
Gaining $10bn in one day is more likely for the American technology company which has admitted it is in “acquisitive mood” following robust third-quarter results. Google declared itself pretty happy with its performance last October, reporting 7pc year-over-year revenue growth. Schmidt told investors on a conference call after the results had been announced that he was “very optimistic about the future” and that the figures were “all good news”.
He then proceeded to run through the holy trinity of shareholder contentment — tight control over costs, plans for new “small and large” acquisitions and the development of new products and markets supporting growth in operating profit margins.
Last week, Google launched Nexus, its mobile competitor to the iPhone. France also announced it was considering a “Google tax” on tech companies such were the positive nature of their profit margins.
It all seems a long way from the gloomy prognosis a year ago, when, Schmidt admits, Google was suffering.
“From our perspective we didn’t know what was going to happen [after the financial crisis and government bail-outs]. So we battened down the hatches, we stopped hiring for a while, we cut down our spending and we waited.
“We had a reasonably good quarter in December and we took our salesforce and we told them: ‘Go out and talk to the CEOs of your customers and say the way to get more revenue is to advertise on Google’. It was very self-serving.
“The low point for us, psychologically, was in fact in February and March 2009 because of the slowdown, and the money stimulation had not really happened yet and economic activity was continuing to slow, and then somewhere in March and April things began to pick up.”
2009 has been the year when the consumer has confounded the economic gloom. We have carried on spending, as last week’s record retail figures from Waitrose and Sainsbury’s, particularly online, revealed.
“What was interesting about the recovery was that I figured Britain and Europe would lag our recovery by at last six to nine months, historically that has been true,” Schmidt said. “However, that has not been true this time. We saw pretty good results out of Europe.
“There are a couple of explanations. One is that the euro is strong relative to the dollar. Another is that the Europeans are smarter and moving to more online — in other words, the pie is not getting bigger but there is a shift in the pie. And then the third reason is that there is a consumer recovery happening in Europe.”
Schmidt sees a global recovery in 2010 that will be patchy and will affect different sectors in different ways — with technology leading the pack. He believes President Obama (Schmidt is a close ally) took the only option available, pumping billions of taxpayer dollars into the economy to shore up the financial sector.
“I am a supporter of President Obama, so I am biased,” Schmidt said. “But I think he has done very well given the challenges he was handed in his first year as President.
“Think about the problems he inherited — Afghanistan, Iraq and the financial crisis, the worst since the Second World War. He manoeuvred through that about as well as you can, he did a stimulus package which I supported.
“So the question is — with the patient out of the emergency room — now what happens? And what happens when the stimulus money is withdrawn? I would assert to you that no-one knows. There is no precedent for the amount of capital that has been put into these markets. That doesn’t mean it is going to be bad by the way, it just means we don’t have any metrics.”
He says there are still great swathes of America “severely injured” and they will take a long while to recover.
“The next stage depends on where you are. Hi-tech has been doing reasonably well, so in California and the places I work and live, the mood is reasonably good. But much of America, if you will the heartland, was severely injured by this with very high unemployment and no short-term recovery, it is going to be a while [getting to recovery].”
Schmidt says it is a complex picture (“America is a big place”). He pauses for thought. And although he says that Europe has picked up more quickly initially, he has a stark warning for the UK and continental Europe. At its most basic they lack one key component in the battle to contain the huge public deficits being run in many Western economies.
That one missing component is called the dollar.
“I do think the situation in Britain is worse than in the States and the reason is that the US can inflate its currency and Britain can’t. It is easier for America to adopt permanent immense spending — the deficit that you can see — because of the role of the dollar as the world’s reserve currency.
“This is the benefit in the post-war world that America has — we get to play by different rules. In Britain, you don’t have the ability to run enormous deficits for the next 10 years so whatever government comes in, they have a much more severe spending problem, they just can’t do it [run a deficit] at the level that America can.”
Of course for Schmidt his business is the technology business. One of the big themes for Davos will be the role the digital world plays in boosting recovery and how politics and business are now intertwined like never before. Both camps, often twitchy about the other’s motives, are warily picking their way to a new consensus in the relationship with the citizen — the consumers that all markets ultimately rely on for growth.
“If you are a politician and you are able and honest and trying to do the best you can, and I think the majority are, you will have better [technological] tools to understand what is going on than you did five years ago or 10 years ago.
“But you will also have people trying to use those tools to misinform you. So, you have better access and because it is public you also have people who are trying to create dissent. And it will be in the interests of businesses to create waves of falsehoods — the term we use is spin.
“It is very easy — let’s say for example you and I believe that the following special thing should occur, with some work you can probably convince a politician that there are a lot of people like you and I. And the easiest way for us to do this is we just pay them. In case you’re wondering if this is true there is evidence that these types of campaigns are being fought in a number of industries in the United States. Lobbyists and so forth are trying to create social movements to mislead and misinform politicians.”
Politicians and business have to grab this new era of transparency and protect themselves from the downsides, he says.
“It will be possible for citizens to understand what their governments are doing much better. Here’s an example — I feel very strongly that the British Government should publish what it’s doing. Where’s the money going? There is no reason why the British government shouldn’t say every day, ‘this is what we did, this is where the money went’, it’s your government.
“It is possible that level of oversight will help transparency, which will make the Government more responsive.
“On the financial crisis, why didn’t we realise how bad it had become? Well, the answer was a lot of information was not publicly available. So, what I would hope as part of the changes in regulation is that it won’t be a closing off of information, it will be an opening up of information about what the financial industry is doing, in aggregate form, while protecting privacy.”
What about the newspaper industry, which has been struggling to find a new economic model? Rupert Murdoch has launched a very public war with Google, describing its approach to news as parasitical — distributing for free newspaper content that media companies have to pay to produce.
Schmidt doesn’t want to get into a slanging match with the boss of News Corporation, but to him the revenue model the newspaper industry will have to use comes after a pretty simple, and essentially binary, decision.
“The simplest model to think about is that your readers are eventually going to consume the majority of your products in online devices. The fact of the matter is that is what the reader is choosing.
“The problem is how do you monetise that reader? There are two choices. One is that you can do a subscription and the other is to use advertising.
“We are in the process of trying to develop very powerful display advertising solutions that will work in those categories. That is the way it is going to happen.”
Schmidt ends on the usual issue for Google — is its “Do No Evil” just so much PR now, that it is just too big with too many fingers in too many pies to be a truly “good” company? Does the detractors’ image of ‘Google the Ugly Giant’ worry him? Or that Google is now just big and boring?
“I do and I have felt that since the day I started at Google,” Schmidt said. “Basically Google has always had that narrative — amazing and creative, and [then] middle-aged, boring and predictable.
“To fight that you have to actively manage the company. You have to take an aggressive position on investment, invention and innovation. And there are companies that have done this very well, for example Apple, which had a near-death experience and has come back with a tremendous performance, so it is possible to do it.
“We suffer [because] we are global, we touch a lot of things, we are disruptive, and we operate in information and people have a lot of opinions on that. I don’t think that will change. I think we have adapted to the role that we now play in the information industry that the role is one of innovation, disruption and still making the world a better place.”
Google CEO Eric Schmidt envisions a radically changed internet five years from now: dominated by Chinese-language and social media content, delivered over super-fast bandwidth in real time. Figuring out how to rank real-time social content is “the great challenge of the age,” Schmidt said in an interview in front of thousands of CIOs and IT Directors at last week’s Gartner Symposium/ITxpo Orlando 2009.
Highlighted comments include:
- Five years from now the internet will be dominated by Chinese-language content.
- Today’s teenagers are the model of how the web will work in five years – they jump from app to app to app seamlessly.
- Five years is a factor of ten in Moore’s Law, meaning that computers will be capable of far more by that time than they are today.
- Within five years there will be broadband well above 100MB in performance – and distribution distinctions between TV, radio and the web will go away.
- “We’re starting to make significant money off of Youtube”, content will move towards more video
- “Real time information is just as valuable as all the other information, we want it included in our search results.”
- There are many companies beyond Twitter and Facebook doing real time.
- “We can index real-time info now – but how do we rank it?”
- It’s because of this fundamental shift towards user-generated information that people will listen more to other people than to traditional sources. Learning how to rank that “is the great challenge of the age.” Schmidt believes Google can solve that problem.
Adapted from Brand Republic story: 18/09/09
Eric Schmidt, the chief executive of Google, has claimed that online news publishers would find it difficult to charge for anything other than niche content.
Speaking via videolink to the Royal Television Society convention in Cambridge yesterday, Schmidt touched on moves by news organisations to reverse their long-term strategy of giving away content free in order to build big audiences attractive to advertisers.
News Corporation chief Rupert Murdoch has become one of the biggest proponents of the change and has openly discussed plans for all his online properties, which include The Sun and Times Online, to charge for access from the middle of next year.
But Schmidt questioned the wisdom of doing so by pointing towards the plethora of free sources of news available online. Schmidt, in comments reported by Reuters, said: “In general, these models have not worked for general public consumption because there are enough free sources that the marginal value of paying is not justified based on the incremental value of quantity. So my guess is for niche and specialist markets…it will be possible to do it but I think that it is unlikely that you will be able to do it for all news.”
Schmidt was speaking on the same day that political magazine The Spectator introduced a partial paywall.