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Google’s Schmidt on the ‘Winners and Losers’ in Search Rankings

October 5, 2011 at 12:00 AM EST
Google is being investigated as to whether it may be violating anti-trust law in how it ranks websites when consumers do searches. Gwen Ifill talks to Google's Executive Chairman Eric Schmidt as part of the Atlantic and Aspen Ideas Forum.
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JUDY WOODRUFF: And to our conversation with one of the leaders in the tech world.

Eric Schmidt is the executive chairman of Google, a man very much in the spotlight, and a prominent supporter of President Obama, whose company remains on the hot seat in Washington from regulators and Congress. Google is being investigated by the Federal Trade Commission as to whether it may be violating anti-trust law in how it ranks websites when consumers do searches.

Gwen Ifill asked Eric Schmidt about all this at the Newseum in Washington this afternoon as part of the Atlantic and Aspen Ideas Forum.

Here’s a part of that conversation.

GWEN IFILL: Last week, you were here in Washington. You were testifying before a Senate Judiciary subcommittee.

How was it being hauled before Congress and basically being told that you had cooked your search results?

ERIC SCHMIDT, Executive Chairman, Google: Well, we, of course, said we had not. I assure you, we have not cooked anything, was my response.

I think in many ways it’s been good, at least so far, because it’s made the company clear — more clearly articulate how we make our decisions and in particular publicly describe that, which is to focus on consumers. So, so far, I think it’s overall been positive.

And I should say, by the way, that the government has a role here. This is their job to do, and so we have to respect that.

GWEN IFILL: Well, let’s talk about the government’s role, because a lot of the members of Congress who were grilling you last week made it clear to that on some level, this — Democrats and Republicans, that Google scares them. Why shouldn’t it?

ERIC SCHMIDT: We make decisions based on what our testing indicates consumers want in terms of a global search engine.

I do understand that Google ranks information, and there’s winners and losers. And those decisions have significant impact on people. So the word scares is their word, not mine. On the other hand, we provide a free and important service to an awful lot of people, and we take great pride in doing it right.

GWEN IFILL: Questions about search dominance, questions about copyright, questions about privacy, how do you begin to tackle all those when you’re now obviously the subject of a Federal Trade Commission investigation?

ERIC SCHMIDT: Well, so far, our answer has been that the principles that we founded the company on seem to be working, and brought in open access to information, try to be as transparent as possible, all the kinds of things that we have said over and over again.

On privacy, we have taken a pretty strong position that privacy is important, that you should have as much control over privacy as possible. And again we also understand that an awful lot of data is being connected about — collected about you. So in each of those cases, I think my personal reaction was that this is the right thing for an antitrust committee to be doing. They should be asking these questions.

But it’s also important to remember that there haven’t been accusations about Google from either the Europeans or the FTC yet. This is the beginning of listening, if you will. And so I think we should reserve judgment until we actually hear if there’s any alleged violations of any other rules.

GWEN IFILL: You know, there has been a discussion going on here for some time about whether tech industries get Washington or Washington gets the tech industry. It took Microsoft a while to realize it. Bill Gates was hauled before a commission here, a committee here not — maybe a dozen years ago.

Now Google was here. The word is that you resisted the idea of coming here to actually testify. How important is Washington to Google or to the tech industry and vice versa?

ERIC SCHMIDT: Well, Washington is the government and, therefore, they can screw us up. So, that’s the simple starting point. And, historically, the high-tech industry has largely ignored Washington.

And in the last 10 years, after Microsoft’s experience, I think everybody sort of figured out that it was important to have representatives here and so forth. Most of the tech companies, including — including Google, have tried to stay in the lobbying-for-ideas phase, as opposed to lobbying for specific sentences written in specific bills. And that seems more palatable to the way we all operate.

And most of the tech companies agree, for example, with the kinds of things that I’m talking about. Most tech companies agree with the importance of broadband, policies that accelerate broadband help America, things like accelerated R&D tax credit and those sorts of things. These are all export businesses. They’re all growing.

GWEN IFILL: You have said that business can create jobs if consumer demand comes back; that’s our basic problem here.

Does government have a role in that?

ERIC SCHMIDT: Well, government has a huge contribution to the economic situation in America. And everybody understands this. Government is both a standard-setter in terms of purchasing, as well as a regulator and so forth.

It’s very important to understand that we’re stuck at the moment. We’re growing at 1 percent to 2 percent in terms of economic growth. That growth is not enough to overcome the natural improvements in business productivity that are occurring without additional jobs.

In my view, it is sort of a national emergency, that we need to get the growth of the company as measured by GDP or something like that going faster. That’s something which we all participate in. The jobs are created by the private sector. The wealth is created by the private sector.

We have proven as a country that we can create enormous numbers of such companies and wealth and people and so forth. It’s been the mainstay of post-war — post-war in the United States. So we need to have that conversation. And instead the conversation is about an awful lot of other things. That’s the central issue. How do we get our growth rate to 3 percent to 4 percent to 5 percent? It should be possible.

GWEN IFILL: But when the administration says in its jobs bill that it would actually like to increase taxes on the wealthiest, is that a job-destroying proposition, as Republicans argue?

ERIC SCHMIDT: Looking at the math, that particular component doesn’t matter very much in my argument. And I’m not going to make a political argument. I will make a policy argument.

That number is a relatively small number compared to the overall tax policy issues across the other 98 percent and so forth. That’s more of a justice and political question than an incentive question.

GWEN IFILL: Would you like to see your taxes raised?

ERIC SCHMIDT: In my case, it’s not a particularly big issue.

GWEN IFILL: Because?

ERIC SCHMIDT: Because it wouldn’t change my behavior. But, for other people, it might. But on a personal — but my personal view of that is not very important.

What is important is, how do we get the productive parts of America working harder, with greater exports, with more investment, in the things that will grow the economy? That’s the only conversation that matters. Everything else solves itself with growth.

GWEN IFILL: If there is going to be growth, it seems that it is in social media. And Google is playing on that field as well. Is — does social media have the potential of completely transforming the way we communicate?

ERIC SCHMIDT: Well, in many ways, it already has. One of the questions is what are we going to do as a society with all those 16-year-olds’ posts when all those people are 36?

It’s pretty clear to me there’s going to be a law which says you can’t discriminate against people based on their pictures below age 18. There will be additional sort of civil rights sort of acts around teenagers.

GWEN IFILL: One can only hope.

ERIC SCHMIDT: Well, there’s going to have to be, based on my personal inspection.

(LAUGHTER)

ERIC SCHMIDT: So we already know it’s transforming it. And we know that if you look at Facebook, which I think is arguably now the most successful of the online sites in that regard, look at the level of activity, it’s really extraordinary how much time people are spending on those.

GWEN IFILL: Did you miss the boat as CEO at Google on the social media explosion?

ERIC SCHMIDT: We were late to this. We were focused on other things.

And you sit down as CEO and you say, like, why didn’t we focus more on that? Well, we were busy on this, this, this, this, which did really well. And so now we have a product called Google Plus, which is doing extremely well, which looks like a worthwhile competitor in a slightly different space, with more privacy controls, for example, than Facebook.

GWEN IFILL: So you can beat Facebook at its own game?

ERIC SCHMIDT: It’s very hard to beat a fast-moving incumbent in exactly same game in technology because it changes so quickly.

What you have to do is you have to find a new problem and do that much better than they are, and that’s what we’re trying to do. And if you do that, you can ultimately win very large.

GWEN IFILL: I’m on Twitter. I try to be up on all the stuff the kids are talking about. But I wonder the degree to which social media enhances what we already believe and even searches, rather than expanding the conversation.

ERIC SCHMIDT: Well, that question has been raised for the last hundred years about communications technology. And I have learned to not have an opinion on how people choose to spend their time. We just want to spend them — have them spend more time on Google doing it.

(LAUGHTER)

ERIC SCHMIDT: So it’s pretty simple. We are not going to make a decision as to whether this is a good use of people’s time or not.

It’s always alarming to me that people text message. They don’t talk on the phone anymore. And people actually have forgotten how to leave voice messages on phones. It’s sort of shocking, right?

GWEN IFILL: They have forgotten how to check them as well.  

ERIC SCHMIDT: That’s right.

(LAUGHTER)

ERIC SCHMIDT: So these are — this is sort of the norm of how society moves forward. What I will tell you…

GWEN IFILL: Is that a good — is that good?

ERIC SCHMIDT: I would say, overall, this is extraordinarily good. And I want to push back very hard on sort of the critics of this and say, look, you were worried about where your teenager is. Now we know where they are. They’re in their room online. It’s a much safer place than a lot of other places your teenager can be. Point one.

GWEN IFILL: Well, there are those who would argue that point, but OK.

ERIC SCHMIDT: Lock the door. Trust me. We at least know where they are.

The second point I would make about it is that communication is what humans do. And the sense of community, the sense of reach, the sense of wonder that you can build out of these online communities is really very nice. In terms of discovery and knowing things and so forth, we at Google can use that information with your permission on our opt-in basis, I might add, to give you much better recommendations.

So, for example, if you tell us who your friends are, we can give you better YouTube recommendations.

GWEN IFILL: But if we tell you who our friends are, you can give it away.

ERIC SCHMIDT: We choose not to, and we state that we won’t. And that’s in our privacy policy. And you should inform yourself when you give that sort of information to any company, what are they going to do with it?

GWEN IFILL: Eric Schmidt, thank you very much.

(APPLAUSE)