On Tuesday evening at the Web 2.0 Summit in San Francisco, John Battelle, Federated Media Publishing had a conversation with Eric Schmidt, CEO, Google. Keeping with the theme of the conference, “Disruption and Opportunity,” we heard a little about how Google disrupted the search engine industry, the advertising industry, and what its plans are with offering competitive software to Microsoft’s Office.
Here’s a little of what Battelle and Schmidt discussed:
John: Why’d you buy YouTube?
Eric: We liked them.
John: Wasn’t Google video doing well.
Eric: It was doing very well. Their business was growing even faster. This year video became important.
John: YouTube is the core. You say you’re keeping it a separate company.
Eric: At Google it’s hard to say what we’re doing next year. They are focused on community and social networking. There are viral components. It’s an important and new paradigm. A very large sum of money set aside to buy peace with media companies. We’ve visited with as many of the media companies as we can because we have to respect copyright. To get the correctly licensed content in all the right places. YouTube had been on this path. We had been on this path. Together we can move more quickly. None of the media companies have the rights management or the monetization. As part of our strategy with link and text ads, we have a part of the secret. When we did the MySpace deal, we had some ideas about how to monetize.
John: Google’s unfair advantage. You can price a deal btter than anyone else. You know how to monetize that better than anyone else.
Eric: You’re saying our advertising product is better. We built a very good targeting engine a lot of our business success comes from that.
John: A lot of companies become standard from having good product. People start trying to compete. Do you worry about that?
Eric: We run our company around the users. We respect rights of end users and don’t do anything that’s against their interest. We don’t look at the applications as an office replacement we look at it as managing parts of your life. The focus we have is not the focus they have. It’s for sharing.
John: It’s not for enterprising?
Eric: The benefit is that it’s free. It makes sense that mobile phones should be free. It should be easy to monetize.
John: About sales; I asked if you were a media company. You said no a technology company driven by media company revenue.
Eric: Now we’re still a tech driven company by lots of media rev.
John: Sales driven companies that have been successful often become a little slow.
Eric: We’ll work harder.
John: Powerful sales organizations. At the end of the day who wins an engineer or a sales guy?
Eric: Engineer. All of the interesting stuff has come out of that 10 percent. We encourage engineers to spend time.
John: Do you worry about going in so many directions at once.
Eric: It may appear like chaos, but it’s driven, The sales question is to work with partners to make money together. To extend our model. Extend our reach. Partnership message is important to transoformation of the company.