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From: tech10110/28/2007 6:03:48 PM
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blogs.barrons.com

October 24, 2007, 5:07 pm

Google Analyst Day: CEO Eric Schmidt

Posted by Eric Savitz

The last speaker at the Google (GOOG) analyst meeting today is CEO Eric Schmidt.

Schmidt says it has become clear we are at the beginning of a massive transition to cloud computing. A global transition from one form of information sharing to another, of one form of computing to another. We can now actually see an integrated strategy for the company.

Schmidt says the strategy is search, ads, apps. Search is not a solved problem. We have no way of capturing your expert insights immediately back into search. How could we take the knowledge from the enormous number of people who use Google every day and put it into search. Makes sense for us to get higher quality content; the kind of insightful thing we are seeing all over the Web, thinking of Wikipedia and other examples.

In a company where search is the view we have of the world, he says, easy to say everything is a search problem. People with Google Docs, just leave everything there and just search. Can’t do it with any other system. Same with Gmail. People leave all there email, and leave it there. Whether desktop or enterprise or global search, or specialized content search, problem of search is powerful, fundamental and not completely solved.

On advertising: There is a different model that has been successful for us, that ads have valuable in and of themselves. Use information we glean to provide extremely targeted ads. Everything we know tells us that model should work in every market; we believe value to end user is in a targeted ad. You say, you don’t want any ads at all, he says, but actually you do.

Principle of targeting is the underlying principle, and we are not done with that by far.

In applications side, here is the story of Calendar. They were exciting about 500 years ago. Wrong. Turns out, calendars are a simple metaphor. You compare them with friends, families. Fundamental, the first example of why the new paradigm is fundamentally different than what we grew up. Makes it viral, powerful.

Google Docs: trying to solve different problem from market leader. (Wouldn’t want to mention MSFT Office specifically, would he?) Most people I know would fundamentally prefer to throw out infrastructure and use our enterprise product. Actually possible for small business to outsource everything to GOOG for $50 a year. Looks like it can get pretty big. Very significant organizations trying it. Users want sharing, accessibility.

We’re just at the beginning, he says. A coherent strategy that solves real problems that end users have. We used to just talk about it. We have customers, teams, products; web service paradigm makes the world a quicker game. Sum of all that is instead of static release cycle, it is experience that is constantly changing. Sets up tremendous innovation.

Schmidt (suit, tie) is now asking Sergey Brin (wearing a white t-shirt, black sweats and Crocs) and George Reyes (suit, no tie) to join him on stage for a Q&A session. They are sitting on tall bar stools. Brin is in the middle; he looks like a guy in custody, sitting between his two lawyers.

Q: On Google maps, are costs higher with Nokia/Nateq and TomTom/TeleAtlas deals?

Brin: Neither deal closed, but it is pretty small component to what our maps to. And we have other vendors for road data. We have satellite, street level, 3D model data. Our geographic products encompass a whole range of things.

Q: On Google apps, can you reach 5%-7% in small/medium sized business segment? Is adoption coming at expenses of Office? What attach rate for premium subscription? Challenges in accelerating adoption?

Schmidt: Very dangerous for us to predict penetration rate. Many companies still not Internet savvy. We have best tools for them to publish and advertising their products. Really about penetration rate of Internet as a whole. We know our presence in market has affected pricing, but not about market share. We’re moving very quickly; people have to learn about it, and convert way their infrastructure works.

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