>>Larry Page: Now, I've asked Eric to join
me, because he knows how to answer the really
hard questions. And --
>>Eric Schmidt: Why don't we have a seat.
>>Larry Page: We're going to take some questions.
>>Eric Schmidt: I thought -- first, I think
for everybody here, I really appreciate you
all spending two days with us. I was trying
to think of a quote or one of the sessions
-- there were so many that I enjoyed. And
I think feedback from you is consistent. I
know, Larry, you feel the same way. I thought
I would read while you're getting your thoughts
together and your voice back, a quote from
Cory Booker yesterday morning.
"But yet, we as Americans, who drink deeply
from the wells of freedom and liberty that
we did not dig, we lavishly eat from the banquet
tables that were prepared for us by our ancestors,
we are too often just sitting around and getting
drunk on the sacrifice and struggle of other
people's labors and forgetting that we're
part of a noble misinhumanity, the first nation
formed not as a monarchy, not as a theocracy,
but as an experiment, an idea that a diverse
group of people, that when we come together,
e pluribus unum, that we can make a greater
whole out of the sum of the parts."
And I think if that gives a sense of what
we, as Google, have been trying to achieve,
both with you in all the things we've talked
about, and if I may say, in the vision that
you've outlined for our company, that the
sum is more than the -- than the parts. I
think that gets a sense of what we're trying
to do here.
I think it might be better, rather than me
asking Larry questions, for you guys to ask
Larry questions and me, if you like --
>>Larry Page: The hard ones will go to Eric.
>>Eric Schmidt: That's right. But we've done
this together a long time. And it's been a
privilege for the two of us in these conferences
to meet at the end with everybody.
So we have some microphones there, or people
can raise their hands. Whatever you'd like
to do. We have a few minutes for this.
Don't be shy.
Yes, sir. Let's get us started.
>>> Hi. I was wondering if you're having more
fun in the last two years or in the first
two years in Google.
>>Eric Schmidt: Larry?
>>Larry Page: Well, yeah, we should ask Eric
for his first two years, too.
I think the first two years were really stressful.
>>Eric Schmidt: As opposed to now?
[ Laughter ]
>>Larry Page: Yeah, yeah. I think so.
>>Eric Schmidt: We had this debate. So -- so
the company didn't have any money. So Larry
comes up to me and says, well, we have all
this money. We're not doing anything with
it. I said, we're supposed to save the money,
Larry.
>>Larry Page: Yeah.
[ Laughter ]
>>Eric Schmidt: Don't you remember the near
bankruptcy and things like that?
>>Larry Page: Near bankruptcy?
>>Eric Schmidt: Yeah, yeah. Yes. We had this
conversation.
[ Laughter ]
>>Larry Page: We actually never used all that
much cash, I don't think.
But --
[ Laughter ]
>>Eric Schmidt: Don't you remember the cash
restriction program, the CRP program, where
we wouldn't pay our bills?
[ Laughter. ]
>>Eric Schmidt: Don't you remember the cash
restriction program, the CRAP program, where
we wouldn't pay our bills?
[ Laughter ]
>>Larry Page: No, not at all.
>>Eric Schmidt: Boy.
>>Larry Page: I think the first two years
were really stressful.
[ Laughter ]
>>Larry Page: I think any of you who have
started companies probably know this, But
it is really hard to start a company. It is
a lot of work. You don't really have anything.
You know, we couldn't figure out how to pay
ourselves. You know, there is just a lot of
things you have to do.
And I think we are lucky now to have a good
infrastructure as a company and lots of really
great people working. Definitely, I think
it's gotten easier as we've gone along.
>>Eric Schmidt: Next question? Yes, sir.
John. Didn't you just do a panel?
>>John Battelle: I'm sorry. I just couldn't
help myself with this question.
>>Eric Schmidt: You did actually write one
of the authoritative books on Google.
>>John Battelle: I think almost every author
on a Google book is here.
>>Eric Schmidt: Excellent.
>>John Battelle: I'm curious, over the past
13 years, for at least 11 1/2 of them, when
people thought "Google," they would think
"search." That was the Google brand. It was
very, very simple, Google equals search.
What does the Google brand equal in the next
phase of Google's life?
>>Larry Page: Yeah, that's an interesting
question. I think that for me what I would
like the brand to be -- represent is some
of the things I talked about. I think that
it would -- I think it is important that people
trust the brand. I think that's very important
to us, that people know that we're acting
in their interest and that we're trustworthy,
both stewards of information, information
access and their own personal data, which
we've worked really hard to do, you know,
with things like Gmail and security and other
things that we do.
And I think also it should stand for kind
of a beauty of technological purity of really
innovation and things that are important to
people but really driving technology forward.
>>Eric Schmidt: Go ahead.
>>> I don't think it is on. Oh, there it is.
So you just recently announced a substantial
acquisition of Motorola. And what I wanted
to know is: Does this represent a new era
for Google of greater risk taking?
And, also, can you talk a little bit about
how you will subsume this very large organization
and essentially double the size of Google
once this transaction is completed?
>>Larry Page: Yeah, doubling head counts.
I think, you know, obviously Motorola's significant
-- Motorola Mobility's significant size, acquisition,
it is not doubling our market cap as much
as we would like it to. It is relatively small
in that sense.
So I think as a company we've always strived
to make investments -- make significant investments
in the future. Remember, when we did the YouTube
acquisition, which was being debated, that
was a very large acquisition at the time and
I think end up being an amazing acquisition
for us.
But, relatively speaking, it was very large.
So I think we've always strived to take those
kinds of risks and identify those opportunities.
That's why we get paid, is to do that. So
I don't see it as particularly different.
But I think we're really excited about the
opportunities in mobile. And you can see that
with the tremendous growth of Android and
so on. And Motorola had that big -- being
an Android partner basically before anybody
else had done that. So they went all Android.
So there is a very natural partner for us
in doing that acquisition.
>>Eric Schmidt: Go ahead.
>>> So my question plays a bit off the last
one. There has been a lot of discussion this
afternoon about patent law and patent development.
And your company probably epitomizes what
-- the best of the best of what can happen
from technology transfer, from innovation
and patents, especially from within higher
education.
Can you just talk a bit about that process
of fostering and managing the transition and
the technology transfer from patent and creation,
especially within higher education to actually
business development and what more maybe we
can do to unlock what seems to be a tremendous
amount of hidden potential within university
walls especially.
>>Eric Schmidt: Well, Stanford actually benefited
a great deal from the invention of these two
young graduate students financially as well
as in many other ways.
>>Larry Page: We did give Stanford a little
bit of equity, which they appreciated, I think.
And return for the technology development
we did at Stanford, we are very grateful for
that.
And I think Stanford has been one of the greatest
environments to do that in, most successful
place.
And I think it is a culture of, you know,
they actually -- the computer science department
at Stanford would let its professors could
start companies and they would do a company
for a couple of years, make some money, and
then they would come back to school and be
a professor again.
And I don't know very many other places where
that has happened repeatedly and with a large
percentage of the faculty.
So actually when we went to start Google,
we asked our professors, Hey, what should
we do? Just talk to this guy. He funded me,
and this guy. And all of a sudden, we had
a check and we were able to get going.
And so I think that culture of innovation
and academia being linked is a really important
thing and doesn't happen very many places.
So I'd say that first -- I would say we did
have patents and so on.
We have never sued anyone over those things,
although we have been sued many, many times
ourselves; and, yet, somehow we have been
successful. So I do think that there is an
element in technology and software moving
really quickly and innovating and actually
doing new stuff rather than just trying to
use the legal system to prevent other people
from doing things.
>>Eric Schmidt: Okay. Go ahead.
>>> This is a question for both of you. How
have your management styles changed at each
size of the company as it scaled from small,
20, 30, 40 employees, up to today?
>>Eric Schmidt: I'd say we're a lot smarter
in how we manage -- One of the things about
Google that's always sort of bothered me is
Google has always had this reputation of sort
of the craziness. But, in fact, the internals
of the company are just remarkably tightly
managed. And it is always a surprise to people.
If you look at the quality, the way our sales
force is run, the analytical nature of the
decisions, we are very much at the state-of-the-art,
probably the best in the world, in my humble
opinion.
So I think we as a management team developed
systematic ways of managing innovation at
scale using data analytics that are the envy
of the world.
Once everybody kind of buys into that, the
environment becomes much less political. People
can't throw random facts around without proof.
And we encourage all of this. I think Larry
-- while you are thinking about how you want
to answer this, I would say Larry's contribution
which has not been told is Larry has a particularly
good judgment around sort of the ability of
somebody to enter such a highly intense environment.
It is a particularly good skill for recruiting.
And I think when you try to think about assembling
corporations and obviously this is an ad for
ourselves of the kind of people who can do
this, you need the kind of person who is quick
and smart but also able to change their views
based on new facts.
>>Larry Page: Yeah, I was just going to say
recently I reorganized a bit to focus on product
areas. I think any company as it grows, if
the company is not static -- which it shouldn't
be -- as it grows and it changes, you need
to reorganize it.
The question is: Are you keeping ahead of
it? And looking at the -- our business, it
is pretty complicated. We have all these different
products. And we have advertising, we have
search. We have Chrome. We have Android. We
have YouTube and so on.
And those things are actually relatively different
and have different -- different things going
on.
So I think I kind of moved that up a level
in the company and made sure we are super
focused in each of those areas on what our
user experience was. And I think that's helped.
Just generally, as you switch to a company
-- as we got more offices, as we got time
zone differences, we had to change how we
did our meetings, change how we do our employee
communications and so on. So I just think
in a technology business growing rapidly,
you just need to make sure you are changing
everything. You are being responsive to that
change and changing everything every year
or else you are just not keeping up with it.
>>Eric Schmidt: The other final comment is
when you are growing as fast as we did, most
of your executives in our case were probably
in their 30s. So I tend to think of them as
when we hired them at that age. But five years
later, they are battled scared veterans of
our industry. So building that knowledge base
and keeping those employees and particularly
those executives who can move so quickly is
a real art and fundamental, I think, to the
success of fast growing high tech companies.
Why don't we go over here.
>>> I was just thinking when you are saying
the company is 13 years old, that means you're
in your corporate adolescence, which is shocking
considering the size. And then if you think
of Ray Kurzweil, that technology evolves exponentially,
where are you going to be in another 13 years
or 20 years? I mean, can you even envision
that?
>>Eric Schmidt: Well, one way to do the math
is to simply assume that Moore's Law will
continue. Moore's Law is roughly doubling
every two years, which turns out to be roughly
a thousand times in 20 years. So pretty, pretty
amazing numbers.
>>Larry Page: You will have a google in your
pocket.
>>Eric Schmidt: Yeah, and so the ability to
ask questions when you have that amount of
computing power with all the telemetry and
knowing everything going on in the world realtime
is tantalizing, absolutely tantalizing what
will be possible.
>>Larry Page: And some speakers have talked
about it but the automated car stuff is a
good example of the possibility. And this
is a scenario where I just had some interest
since I was a grad student. It seemed pretty
practical actually.
I mean, you think that driving a car is hard,
but it is not actually that hard for a computer
and if the computer actually has good data,
like about what's around it.
>>Eric Schmidt: Our computers drive your car
better than you do when you are drunk.
>>Larry Page: I hope so.
>>Eric Schmidt: Right?
>>Larry Page: I hope so.
[ Laughter ]
>>Eric Schmidt: That's our starting point.
[ Laughter ]
>>Larry Page: Or when you are 16 or when you
are really old.
[ Laughter ]
But they actually work better -- I think they
will work substantially better than an average
person and get better from there and continue
improving, as was mentioned. You get a software
update and your car will be safer, right,
which is great.
So I think just looking at the potential there,
there's -- the issues we have in a lot of
these areas are that people aren't working
on them. And, you know, in fact, before the
DARPA Grand Challenge that happened, there
was very few people working in the area.
The grand challenge gave it a big contest,
got more people working in it. Then when we
asked the people who were working in the area,
why don't we have an automated car? Why can't
I buy one? It should be a great thing to be
able to do. There is something like 3 million
people killed worldwide a year in auto accidents.
I mean, there is a lot of people that die
and a lot more that are injured.
And there is a lot of other benefits you get
from the automation, too, that people spend
two hours a day in the U.S. commuting, which
is a huge amount of time that they don't need
to be spending. They could be doing useful
things during that time or watching TV or
looking at ads or whatever.
[ Laughter ]
>>Larry Page: So -- but, anyway, we asked
people why aren't you doing it? They said
we can't actually figure out how to do it.
There are regulatory issues and all these
other kind of things.
So I think part of our roles as a catalyst
is to make sure that some of these things
actually start up and happen, and make sure
we push through the difficult issues to make
it real.
>>Eric Schmidt: I think it is a privilege
to be at Google in the sense that one of the
privileges is that the gross margins are high
enough that we can afford some of these things
to a reasonable scale. And other companies
are not so fortunate.
Yes, sir?
>>> With that said, I mean, obviously there
is a lot of ideas and opportunities here.
How does Google set boundaries and focus for
their businesses so they don't get lost like
so many companies have before you?
>>Larry Page: Yeah, I mean, I have done a
lot of thinking about other companies and
how they have succeeded or failed and tried
to really be a student of that.
I think most companies, as they add people,
they don't do more things. So just as a first
approximation, if a company doubles in headcount
over time, typically it has much the same
business as it had before. And so I think
that's somewhat frustrating both for the company
to grow and for the people inside and all
that.
So, you know, we've tried to actually maintain
kind of a linear number there, as we are adding
people, we're adding businesses.
And I think that's challenging at our scale.
But I think it is a really good goal to have.
But these things that we're adding need to
be significant, right? They can't just be,
"We're going to do horoscopes or something."
[ Laughter ]
>>Eric Schmidt: Go ahead.
>>> Back in the '90s, the big giants, the
gorillas, the sort of secretive companies
were IBM and Motorola way back when. And when
they did things, everybody in the industry
would jump. Somehow that mental shifted over
in the oughts to Microsoft and AT&T which
are still kind of wearing that mental.
We have had a little bit of light joking here
about "Google is becoming a little Microsoft-like
and so forth."
>>Eric Schmidt: I have an opinion on that
question.
>>> Exactly.
[ Laughter ]
>>> There has been a little bit of kerfuffle
about the real names policy on Google+, which
turned into the nim wars, if you look that
up.
In this new world, if you do really want to
be trustworthy, a piece of that is openness
and transparency. And there is some openness
and transparency here. But another piece of
it seems to be about intent and authenticity
and maybe even vulnerability in different
ways.
What are you doing to communicate better than
you do now? Because when I see the nim wars
transaction happening out there, I see you
not being heard or not communicating well.
I see communities not really engaged there
properly so this can simply be resolved in
a really great way for both parties, or for
all parties. I don't think there is one answer
that makes everybody happy. But I think there
is a way to conduct the conversation that
might be a lot better.
>>Larry Page: I actually see this as our responsibility
to some extent. We had a panel on media and
so on this morning. I think that we as important
people are trying to improve the Internet
and how it works.
I think it is important for the Internet and
that whole ecosystem, information, how it's
shared, how it's analyzed and so on to work
better. And I think there is a lot of -- if
you ask anyone about how that information
is getting propagated, how people are deciding
what to focus on and all those kind of things,
I think it could work a lot better than it
does now.
And so I see the issues we have with communication
as being a special case, kind of the world
as a whole. If you ask any company that question,
they will have similar issues. Or if you ask
any politician or anybody who's dealing -- who
is in that public eye. So I think we as an
Internet community, we have a responsibility
to make those things work a lot better and
to get people focused on what are the real
issues, what should you be thinking about.
And I think we as a whole are not doing a
good job of that at all.
>>Eric Schmidt: Go ahead.
>>> Since this conference is so much about
innovation -- and we all appreciate how important
competition is to all of that -- let's say
you had just made a new acquisition of a greeting
card company and you were sitting down with
the management team and they gave you an assignment
of writing a get-well card to Yahoo! What
would that say?
[ Laughter ]
>>Eric Schmidt: I think that -- I appreciate
your question.
[ Laughter ]
>>Eric Schmidt: I think as a good policy Google,
Google should talk about Google. And aside
from my snide comments about one of our former
competitors, we should keep our mouths shut.
With respect to Yahoo!, Yahoo! has both been
a partner and a competitor for Google for
a very long time. And I think that they need
to sort out their leadership issues, which
I know they are working very hard on. And
I think that's probably all we should really
say.
Go ahead.
>>> So my question is with regards to on the
scale Google is going to be growing at. We
are all aware of how it's grown, thinking
about the Moore's Law and it is just going
to go exponentially higher.
In this process, you would require very, very
high-quality talent and students coming out
of great universities.
Now, I know this is an incredibly challenging
thing that's confronting you guys because
it is not like Stanford is also admitting
an exponentially higher number of students
or the best universities.
What's your plan? What are you guys thinking?
Is this something that's bothering you at
this stage?
>>Eric Schmidt: Always.
>>Larry Page: Yeah. I have been hassling universities
that they should be growing more. And they
are working on that in various ways. I do
think it is a fundamental issue with the higher
education, although we did see numberses this
morning that the numbers are increasing a
lot over time.
We do have a very serious issue about people
being excited about going into technology
and computer science specifically.
Will.i.am and I were talking about that at
lunch. We were saying, how do make being a
computer scientist sexy? How do we get people
to actually want to do that?
I actually made the point that I think some
of the base technologies are very kludgey.
It is kind of a hazing thing. You have to
learn these special command line things with
weird names and so on. I guess it is Eric's
fault actually.
But I think we could do a lot to make the
actual core technology more accessible, combined
more with art and the beautiful aspects of
it and get that all going and more accessible
to people. That would have a huge impact.
>>Eric Schmidt: There is a lot of diversion
away from what we need, and we need to stop
that. I think the other thing is the mindless
and stupid policy that we have with respect
to immigration of smart people into America
needs to get fixed. And it is a national crisis.
Why don't we finish up with the questions
-- folks who are standing right here. You
can -- You can be the last one, too. And that
will be -- We are going to run over time.
I want to make sure we accommodate everybody's
questions.
Steve, go ahead.
>>> So when I talk about Google, which was
generous enough to cooperate with me when
I wrote a book, I got asked two questions.
John Battelle sort of took over the first
one. The second one is that people asked me
is, What is the biggest threat to Google's
continued success? So to help me get it from
the horse's mouth, how should I answer that?
>>Larry Page: Google.
>>Eric Schmidt: The problems -- the problems
in a company of Google's scale are always
internal at some level.
>>Larry Page: That's why I said Google.
[ Laughter ]
>>> Actually, I have been saying something
like that. So thank you.
>>Eric Schmidt: Larry, actually, you didn't
sort of talk about your management memo.
But one of the things that he did after he
became CEO and correcting all the messes that
I handed to him, were -- he wrote a very,
very defined memo about innovation, how decisions
are made and so forth.
And it's a -- it's large companies are their
own worst enemy, because, internally, they
know what they should do, but they don't do
it. And, if I may say, my business partner
and close friend, Larry, what does he do all
day? He's doing that. He's in there forcing
the discussion, forcing the choice, and forcing
the resolution, sort of with his unique talents.
And I think that's -- that will, ultimately,
determine how hugely successful Google is
or not.
>>Larry Page: One of the interesting things
we noticed is companies correlate on decision
making and speed of decision making. There
are, basically, no companies that have good
slow decisions. There are only companies that
have good fast decisions. And so I think that's
also a natural thing. As companies get bigger,
they tend to slow down decision making. And
that's pretty tragic.
>>> Thanks a lot.
>>> The acquisition of Motorola has given
you access to an important trove. But Motorola
is also the largest manufacturer of set top
boxes in America, which also gives you an
interesting springboard into digital television.
Was that part of the strategy?
>>Larry Page: It's certainly something we
considered, yes.
[ Laughter ]
>>Eric Schmidt: We have to be careful. Because,
under the rules, we can't really talk about
Motorola. But I will tell you, when we both
looked at Motorola, the quality of their feature
products, but also what's coming in the future
is amazing stuff. So hold that question until
we see that coming out. Go ahead.
>>> Looking back at these 13 years, which
ones do you consider the biggest mistakes?
>>Eric Schmidt: Year 7? No, just kidding.
Prime numbers. no.
>>Larry Page: I remember we, initially, did
not get a Yahoo! deal actually for ads way
back when. And we, actually, were kind of
debating what to do. And we didn't have that
much money, and we were going to have to spend
more money than we had. So I, actually, think
we made a big mistake in not having enough
capital available in order to do that. And
that caused a whole series of other things.
>>Eric Schmidt: I think, when companies grow
as fast as Google does, you -- it's hard to
sort of look back and say what was the best
year or the worst year. They're all good,
right? And whatever mistakes you made, you
made because you were winning somewhere else.
So you can't really sort of look at it in
isolation. I can think about, in my contribution
to the company, obviously, I worked hard.
And I should have done 10 things. But what
was I doing? Oh, I was busy working on these
other things, which worked out really well.
So I think you have to judge in total. And
the total story is a good one, as we're all
right here.
>>Larry Page: That's the frustrating thing
about businesses is you don't get to run them
the other way. There's no control experiments
you can run.
>>Eric Schmidt: By the way, Larry, you're
the only person in the world who would ever
say that.
[ Laughter ]
>>Eric Schmidt: Sir, you're going to have
the honor of the last question.
>>> This one will be a good one. It won't
be a question. Just a great bravo. I was talking
to Arianna. Is she here by any chance?
>>> She was just here.
>>> We were having lunch. And I was fortunate
to have lunch with her. And everyone heard
the conversation between Ted and Arianna.
So I'll throw something out to you we talked
about.
If that conversation happened back in time
with Rosa Parks, kind of stealing from the
mayor, and the argument was the news the way
it's being produced today -- we'll go back
in time. If you had a camera crew and you
followed Rosa Parks and you entered the bus,
you captured the story, put it on the network,
phenomenal story, 1-hour documentary.
The advantage you have is that story -- I
live in New York. We have 168 different languages,
five different boroughs. Can you imagine how
that story would be translated being sent
to mobile and social and the ramifications
of how that would impact society?
So, when news people talk about journalism,
they really mean societal change. So I think
that before connected TV, before the 80% world
gets connected, where you'll play with media
-- I represent local TV -- is a story will
start. And through the Android and through
-- not just saying this to be nice. But through
Google+, because Facebook won't let us embed
content and make money -- I'll say that again
-- Facebook won't let us embed content and
make money, you will. You have the chance
to have the droids talk to the community,
the community give us information back, and
Google+ to be facilitator.
>>Eric Schmidt: Thank you. I like to think
about in my lifetime how much information
is now current.
I grew up during the Vietnam War. The negotiation
that ended up ending the Vietnam War consisted
of letters going through the Pakistani embassy
that took a week and a half to go back and
forth. Just think about it. Think about the
'60s and the red phone and Russia and so forth.
So over a 50-year period, the impact of communications
and knowledge is so much more profound than
any of us can possibly imagine. I think, if
you take the vision that Larry laid out, which
we all fully support and are running with
him to make happen, the changes in society
in the next 50 years will be equally as dramatic.
Larry?
>>Larry Page: Yeah. Maybe we should get people
to their planes and all.
>>Eric Schmidt: Thank you, all. Thank you
Nikesh
