Three minutes with Google's Eric Schmidt
By Tom Spring
(IDG) -- For millions of people, Dr. Eric Schmidt holds a map to the Internet. As chief executive officer of the Redwood City, California, search company Google, he has led the firm to its position as a search engine well regarded for its clean interface and speedy, highly relevant results.
Schmidt, 46, became Google's CEO last summer when co-founder Larry Page, 28, stepped down. He previously was chief executive and chairman of software maker Novell, and before that was chief technology officer at Sun Microsystems.
Today, his challenge at Google is to guide the fast-growing dot-com company into adulthood, including likely prepping it to go public at a time when being an Internet company garners skepticism. PCWorld.com caught up with Schmidt at a recent appearance at the Massachusetts Software and Internet Council.
PC World: Google states that it eschews pop-up advertising and traditional banner ads. Google doesn't accept paid placement in its search index, and the interface seems free of commercial ties. How do you make money?
Schmidt: Half of Google's revenue comes from selling text-based ads that are placed near search results and are related to the topic of the search. Another half of its revenues come from licensing its search technology to companies like Yahoo!.
PC World: You've said Google gets 10,000 e-mail messages a week from companies asking how they can rank higher in Google search results. How do you balance keeping search results commercial-free and still working with advertisers to make money?
Schmidt: In Google's case, our model seems to work where advertising doesn't affect the ranking you get. And you can be sure our advertising computer is separate from the search computers. They are kept separate for a good reason. No human can get confused on this issue.
PC World: Google has added 20 years worth of searchable archived Usenet postings and is now beta-testing a Google Catalog search. What other new features will we see?
Schmidt: The catalog search is a good example of a new service, because it was done in six months by two people. Because Google already has the infrastructure, it's relatively easy to add new services.
As a rule, we don't preannounce new features. But the most important one coming up is more recency added to the search index. When I started at Google, the company was out of date, on average, every two weeks because the crawl was a monthly cycle. We want to get to the point where Google is updated on a daily basis.
We are working on algorithms to detect which sites are having high traffic or high page rank or high change rates. We want to make sure those pages are as current as possible.
Another service that takes advantage of recency is something we just added called Overview of Today's Headlines. Google reads all the newspapers on the Web every hour and constructs a newspaper for the world by computer--no humans are involved.
PC World: What have you learned from the mistakes of other search engines?
Schmidt: One was not to go public too soon. In other words, build a real business. Another was to stay very focused on search. Search companies, which I won't mention by name, tried to do so many things at the same time, they forgot all about search. They either missed the next revolution of search or they created an opening for a Google to enter.
PC World: Do you see Google as a network or some other type of destination site?
Schmidt: Perhaps in the future. Today, Google is first and foremost a technology company that builds great products that hopefully people will want to use it.
But frankly right now we are just too overloaded with our current search product growth to worry about anything else. We want to make sure the thing you're looking for is on Google 100 percent of the time.
PC World: So you don't want to be the next Yahoo!?
Schmidt: What we do is search. Yahoo! is a portal with a myriad of specialized services. What Google does is sufficiently limited. It's not really targeted at what Yahoo! or AOL is trying to do. Our business strategy is not to compete, because we want them as customers. (AOL Time Warner is the parent company of CNN.com.)
PC World: What's next for search technology, and how can it get better?
Schmidt: Technology is always evolving, and companies -- not just search companies -- can't be afraid to take advantage of change.
When was the last time a computer or network was built to take advantage of cheap bandwidth, cheap DRAM, and plentiful PCs? Most companies are still building mainframes based on old computer architectures.
At Google, for example, we found it costs less money and it is more efficient to use DRAM as storage as opposed to hard disks -- which is kind of amazing. It turns out that DRAM is 200,000 times more efficient when it comes to storing seekable data. In a disk architecture, you have to wait for a disk arm to retrieve information off of a hard-disk platter. DRAM is not only cheaper, but queries are lightning fast.
Search technology has a lot of room for improvement, be it algorithms or computer architecture.
PC World: What are Google's biggest challenges?
Schmidt: Managing the growth. Our servers are overloaded. There is a DRAM shortage. We're building more computers. We are adding more-sophisticated products to the advertising side of Google. Our problems at the moment are growth problems.
PC World: How big can Google get, and how do you sustain that growth?
Schmidt: It's a mistake to predict the size of markets that are so new. This model has shown no signs of slowing down. So we are going to get as much of it as we possibly can, and when we get close to that we'll figure out other problems.
PC World: What do you bring to Google?
Schmidt: I see myself primarily as a technologist. And what's funny is that I am not primarily used as a technologist here at Google. I'm primarily used as an executive who has run companies.
This generation of technologists is a better group of technologists than I am. They are quicker and they understand it better. I'm able to bring business expertise but, more importantly, operating experience. The people here at Google are young. Every day there are lots of new challenges. I keep things focused. The speech I give everyday is: "This is what we do. Is what you are doing consistent with that, and does it change the world?"
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