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<DIV style="MARGIN-RIGHT: 0px" dir=ltr align=left><FONT color=#0000ff size=2
face=Arial><SPAN class=933344717-15082010>I think this article is of more
general interest as it points to the range of <SPAN
class=376575217-15082010>Internet relad </SPAN>issues that are emerging at least
from Google's perspective--but of course, Google is, at least for the moment, at
the very centre of much of that world.</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff size=2 face=Arial><SPAN
class=933344717-15082010></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff size=2 face=Arial><SPAN
class=933344717-15082010>M</SPAN></FONT></DIV></DIV>
<DIV></DIV>
<DIV dir=ltr lang=en-us class=OutlookMessageHeader align=left><FONT size=2
face=Tahoma>-----Original Message-----<BR><B>From:</B>
oia-bounces@lists.bway.net [mailto:oia-bounces@lists.bway.net] <B>On Behalf Of
</B>Charles Brown<BR><B>Sent:</B> Sunday, August 15, 2010 10:32 AM<BR><B>To:</B>
OIA List<BR><B>Subject:</B> [OIA] Google and the Search for the
Future<BR><BR></FONT></DIV>
<DIV>Some thoughtful discussion for a change via a MSM conduit. </DIV>
<DIV><BR></DIV>
<DIV>Hat tip: Frank Collucio</DIV>
<DIV><BR></DIV>
<DIV>
<H2 class=subhead><SPAN style="FONT-WEIGHT: normal" class=Apple-style-span><FONT
class=Apple-style-span size=5><SPAN style="FONT-SIZE: 18px"
class=Apple-style-span>Google and the Search for the
Future </SPAN></FONT></SPAN></H2>
<H2 class=subhead><SPAN style="FONT-WEIGHT: normal" class=Apple-style-span><FONT
class=Apple-style-span size=5><SPAN style="FONT-SIZE: 18px"
class=Apple-style-span>The Web icon's CEO on the mobile computing revolution,
the future of newspapers, and privacy in the digital
age.</SPAN></FONT></SPAN></H2></DIV>
<DIV><A
href="http://online.wsj.com/article/SB10001424052748704901104575423294099527212.html?mod=WSJ_Opinion_LEADTop#articleTabs%3Darticle">http://online.wsj.com/article/SB10001424052748704901104575423294099527212.html?mod=WSJ_Opinion_LEADTop#articleTabs%3Darticle</A></DIV>
<DIV>
<H3 class=byline> By <A
href="http://online.wsj.com/search/term.html?KEYWORDS=HOLMAN+W.+JENKINS%2C+JR.&bylinesearch=true">HOLMAN
W. JENKINS, JR.</A> </H3>
<P>To some, Google has been looking a bit sallow lately. The stock is down.
Where once everything seemed to go the company's way, along came Apple's iPhone,
launching a new wave of Web growth on a platform that largely bypassed the
browser and Google's search box. The "app" revolution was going to spell an end
to Google's dominance of Web advertising.</P>
<P>But that's all so six-months-ago. When a group of Journal editors sat down
with Eric Schmidt on a recent Friday, Google's CEO sounded nothing like a man
whose company was facing a midlife crisis, let alone intimations of
mortality.</P>
<P>For one thing, just a couple days earlier, Google had publicly estimated that
200,000 Android smartphones were being activated daily by cell carriers on
behalf of customers. That's a doubling in just three months. Since the beginning
of the year, Android phones have been outselling iPhones by an increasing clip
and seem destined soon to outstrip Apple in global market share.</P>
<P>True, Apple sells its phones for luscious margins, while Google gives away
Android to handset makers for free. But not to worry, says Mr. Schmidt: "You get
a billion people doing something, there's lots of ways to make money.
Absolutely, trust me. We'll get lots of money for it."</P>
<P>"In general in technology," he says, "if you own a platform that's valuable,
you can monetize it." Example: Google is obliged to share with Apple search
revenue generated by iPhone users. On Android, Google gets to keep 100%. That
difference alone, says Mr. Schmidt, is more than enough to foot the bill for
Android's continued development.</P>
<P>And coming soon is Chrome OS, which Google hopes will do in tablets and
netbooks what Android is doing in smartphones, i.e., give Google a commanding
share of the future and leave, in this case, Microsoft in the dust.</P>
<P>Can it all be so easy? Google's stock price has fallen nearly $250 since the
beginning of the year. Financial pundits have started to ask skeptical
questions, wondering why it doesn't give more of its ample cash back to
shareholders in the form of buybacks and dividends. Some suspect that all that
temptation merely encourages Mr. Schmidt, along with founders Sergey Brin and
Larry Page—the triumvirate running the company—to splurge on gimmicky ideas that
never pay off. Fortune magazine recently called Google a "cash cow" and
suggested more attention be paid to milking it rather than running off in search
of the next big thing.</P>
<P>But to hear Mr. Schmidt tell it, the real challenge is one not yet on most
investors' minds: how to preserve Google's franchise in Web advertising, the
source of almost all its profits, when "search" is outmoded.</P>
<P>The day is coming when the Google search box—and the activity known as
Googling—no longer will be at the center of our online lives. Then what? "We're
trying to figure out what the future of search is," Mr. Schmidt acknowledges. "I
mean that in a positive way. We're still happy to be in search, believe me. But
one idea is that more and more searches are done on your behalf without you
needing to type."</P>
<P>"I actually think most people don't want Google to answer their questions,"
he elaborates. "They want Google to tell them what they should be doing
next."</P>
<P>Let's say you're walking down the street. Because of the info Google has
collected about you, "we know roughly who you are, roughly what you care about,
roughly who your friends are." Google also knows, to within a foot, where you
are. Mr. Schmidt leaves it to a listener to imagine the possibilities: If you
need milk and there's a place nearby to get milk, Google will remind you to get
milk. It will tell you a store ahead has a collection of horse-racing posters,
that a 19th-century murder you've been reading about took place on the next
block.</P>
<P>Says Mr. Schmidt, a generation of powerful handheld devices is just around
the corner that will be adept at surprising you with information that you didn't
know you wanted to know. "The thing that makes newspapers so fundamentally
fascinating—that serendipity—can be calculated now. We can actually produce it
electronically," Mr. Schmidt says.</P>
<DIV>Mr. Schmidt obviously has an eye to his audience, which this day consists
of folks with an abiding devotion to the newspaper business. He speaks in
sorrowful tones about the "economic disaster that is the American newspaper." He
assures us that in the coming deluge trusted "brands" will be more important
than ever. Just as quickly, though, he adds that whether the winners will be new
brands or existing brands remains to be seen. On one thing, however, Google is
willing to bet: "The only way the problem [of insufficient revenue for news
gathering] is going to be solved is by increasing monetization, and the only way
I know of to increase monetization is through targeted ads. That's our
business."</DIV>
<P>Mr. Schmidt is a believer in targeted advertising because, simply, he's a
believer in targeted everything: "The power of individual targeting—the
technology will be so good it will be very hard for people to watch or consume
something that has not in some sense been tailored for them."</P>
<P>That's a bit scary when you think about it. But for investors and executives
the big question, of course, is which companies will control these
opportunities. Google may see itself as friend and helper to the media business,
but it also clearly sees itself in control of the targeting information. Says
Mr. Schmidt: "As you go from the search box [to the next phase of Google], you
really want to go from syntax to semantics, from what you typed to what you
meant. And that's basically the role of [Artificial Intelligence]. I think we
will be the world leader in that for a long time."</P>
<P>Between here and there, though, the company faces ever-growing legal,
political and regulatory obstacles. The net neutrality debate, which Google has
led, has taken a sudden turn that has many of its former allies in the "public
interest" sector shouting "treason."</P>
<P>What was most striking about the set of net neut "principles" Google produced
this week with former antagonist Verizon was that they didn't apply to wireless.
"The issues of wireless versus wireline gets very messy," Mr. Schmidt told one
news site. "And that's really an FCC issue, not a Google issue."</P>
<P>Wait. Isn't the future of the Internet wireless these days? Isn't wireless
the very basis of the new partnership between Google and Verizon, built on
promoting Google's Android software? But Google has now broken ranks with its
allies and dared to speak about the sheer impracticality of net neutrality on
mobile networks where demand is likely to outstrip capacity for the foreseeable
future. </P>
<P>If that weren't about to become a sticky political wicket for the company, it
also faces growing antitrust, privacy and patent scrutiny, fanned by a growing
phalanx of Beltway opponents, the latest being Larry Ellison and Oracle.
"There's a set of people who are intrinsic oppositionists to everything Google
does," Mr. Schmidt acknowledges resignedly. "The first opponent will be
Microsoft." </P>
<P>Mr. Schmidt is familiar with the game—as chief technology officer of Sun
Microsystems in the 1990s, he was a chief fomenter of the antitrust assault on
Bill Gates & Co. Now that the tables are turned, he says, Google will
persevere and prevail by doing what he says Microsoft failed to do—make sure its
every move is "good for consumers" and "fair" to competitors.</P>
<P>Uh huh. Google takes a similarly generous view of its own motives on the
politically vexed issue of privacy. Mr. Schmidt says regulation is unnecessary
because Google faces such strong incentives to treat its users right, since they
will walk away the minute Google does anything with their personal information
they find "creepy."</P>
<P>Really? Some might be skeptical that a user with, say, a thousand photos on
Picasa would find it so easy to walk away. Or a guy with 10 years of emails on
Gmail. Or a small business owner who has come to rely on Google Docs as an
alternative to Microsoft Office. Isn't stickiness—even slightly extortionate
stickiness—what these Google services aim for?</P>
<P>Mr. Schmidt is surely right, though, that the questions go far beyond Google.
"I don't believe society understands what happens when everything is available,
knowable and recorded by everyone all the time," he says. He predicts,
apparently seriously, that every young person one day will be entitled
automatically to change his or her name on reaching adulthood in order to disown
youthful hijinks stored on their friends' social media sites. </P>
<P>"I mean we really have to think about these things as a society," he adds.
"I'm not even talking about the really terrible stuff, terrorism and access to
evil things," he says.</P>
<P>Not that Google is a doubter of the value of social media. Mr. Schmidt awards
Facebook his highest accolade, calling it a "company of consequence." And though
"there is a lot of hot air, a lot of venture money" in the sector right now, he
predicts that one or two more "companies of consequence" will be born among the
horde of new players just coming to life now.</P>
<P>A skeptic might wonder whether, despite present glory, Google itself might
yet prove a flash in the pan. The company has enormous technological confidence.
Mr. Schmidt describes how YouTube, its video-serving site, almost "took down"
the company in its early days, thanks to the swelling outflow of video
dispatched from its servers to users around the globe. Salvation was the "proxy
cache"—lots of local servers around the world holding the most popular videos.
"The technology that Google invented allows us to put those things very close to
you," says Mr. Schmidt. "It was a tremendous technological achievement."</P>
<P>But with YouTube, as with lots of Google projects, there remains the question
of how to make money. Google captured the search wave and shows every sign of
positioning itself successfully for the mobile wave. As for the waves after
that, your guess may be as good as Mr. Schmidt's.</P>
<P><EM>Mr. Jenkins writes the Journal's weekly Business World column.</EM>
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