d9: Google's Eric Schmidt Dodged Questions About U.S. Antitrust Investigations

Google's Eric Schmidt kicked off the first session of the D9 conference, which opened today in Rancho Palos Verdes, Calif. That put him at the pleasure of grilling by cohosts Kara Swisher and Walt Mossberg. Swisher started with the antitrust question. Mossberg followed asking about four companies, collectively worth half a trillion dollars."Four companies are […]

Google's Eric Schmidt kicked off the first session of the D9 conference, which opened today in Rancho Palos Verdes, Calif. That put him at the pleasure of grilling by cohosts Kara Swisher and Walt Mossberg. Swisher started with the antitrust question. Mossberg followed asking about four companies, collectively worth half a trillion dollars.

"Four companies are exploiting platform strategies very well" -- Amazon, Apple, Facebook and Google, Schmidt said. "We can debate who's fifth or sixth" -- and he mentioned eBay and Twitter.

Schmidt observed that in the past single, large platform companies dominated -- IBM through the early 1980s, followed by Microsoft. The "gang of four" changes platform dynamics and product development. "These're global companies with reach and economics," he said.

Mossberg, who believes that we've entered the "post-PC era," wondered why Microsoft isn't on the list. "Microsoft isn't driving the revolution in the mind of consumers," Schmidt answered. He observed, as others have, that Microsoft is focused on its Office and Windows platforms, which cater to businesses.

Schmidt described Page as a "product genius."

"Don't you know too much about us?" Mossberg asked. Schmidt described privacy as a "compromise" between the needs of government and citizens. He carefully insisted that Google doesn't abuse the data he collects. Swisher asked about the Android phone as the "probe in your pocket" -- a term take from Apple CEO Steve Jobs, who wanted her to write a story about it. Schmidt insisted that Google isn't sucking information out of people's pockets an into search.

Mossberg and Swisher pressed Schmidt about the future of mobile platforms, with Android and iOS being the presumed leading choices. Who else? "Many people don't have a third choice," Schmidt said. "It would take too many resources to be a third."

Mossberg, Schmidt and Swisher participated in a demo for a new mobile payments system. The search and information giant introduced Google Wallet on May 26. Google's partnering with Cit, Mastercard and Sprint to bring mobile payments to Android-powered smartphones, using NFC (near-field communications) technology. "It looks like the NFC chip will be the global standard," Schmidt said.

Simply stated, Google Wallet is an offers and payments system available at the point of sale. In its simplest form, Google Wallet requires a tap of the screen to pay the merchant and charge the buyer's credit card.

Mobile payments are a hot topic, but more international than in the United States. If anything, Americans are deprived compared to Europeans, Asians and Africans. Mobile payments have found surprising traction in Kenya and parts of North Africa pushing out into the Middle East.

For Google, the payment system is as much about advertising. Google won't charge merchants for transactions or software/cloud service. "We make our money through the advertising and the offers," Schmidt said.

Loyalties and offers will be crucial for Google and merchants. Some passing a billboard for a sale on jeans could scan a barcode and then walk over to the store, where the item would be ready to purchase using Google Wallet. Initially, Google Wallet will only be available for Android phones.

The system requires purchase of new point of sale terminals, which hasn't been a problem because theft is much lower when using NFC payments. "The whole system pays for itself so quickly," Schmidt said.

In response to Mossberg asking why people would use Google Wallet instead of credit cards, Schmidt answered: "Your phone is your alternate personality in the digital world."

When asked how consumers could be more secure, he mentioned use the Chrome Browser (natch), use two factor Gmail authentication and [most importantly] dump your Windows PC and get a Mac. He also reiterated that he was a proud former Apple board member.

Schmidt and Google are probably still stinging from getting hacked by China through their Windows-based PCs a few years ago.

Still, interesting he didn't say "Get a ChromeBook!", no?

Schmidt also said that Google just renewed their Maps relationship with Apple. In the next sentence, he said there is a search relationship in place, but wasn't as certain with his words.

According to sources, Apple is working to improve the iOS Maps application, iOS 5 will not bring an Apple developed maps service and Google Maps is still in. Besides Apple's purchase of both Placebase and Poly9, some speculated that Apple is building their own maps service to either compete with Google or step away from their input into iOS.

Bing Beats Google At Direct Answers:

When Mossberg, said he find his Google results "more and more polluted" despite the algorithm reset (the Panda update at the end of February).

Schmidt came back with how the update impacted 12% of search results (which doesn't mean it improved that many results, but I've seen that stat be taken in that way). He said Google makes "hundreds" of improvements each quarter that aren't seen. And that it's working more to come up with direct answers, rather than links to information.

"If we can come up with the right answers, we'll just give it to you," Schmidt said.

That can sound great on the consumer front, but since Google (not to mention Bing) extracts those "direct answers" sometimes from web sites, it opens another can of worms that it is potentially depriving sites of traffic.

For Google, that'll play out as further signs of evil in some hands. For Bing, no one will care to attack them on that front, as they're still too small.

Continuing on, Mossberg said that Bing seems to have more direct answers in some cases.

"There's that in some narrow cases," Schmidt said.

Asked about whether personalization is causing a "Balkanized" world where everyone just sees what they want -- a theme that's been popularized recently by Eli Pariser’s book, The Filter Bubble, Schmidt pushed back.

"The differences are pretty small, he said, saying the personalization aspects are a small component of the rankings. "I think that's a little bit of an overstatement to make a point," he said.

I still need to get through Pariser's book (hey, I'm quoted on the first page of it!), but that's tended to be my view as well.

Personalization is a big deal, a big change, but we're still not at the point where all your results are so massively personalized that a Republican sees a completely different world view of search results than a Democrat.

Google has facial recognition technology, but it's uncomfortable with how it might be used, so it has withheld it. That's apparently pretty unique for Google.

"As far as I know, it's the only technology that Google built and stopped," Schmidt said.

Schmidt said repeatedly that it would be "useful" to get social data from Facebook or elsewhere to improve its own products: "From Google’s perspective, it would be useful to have the information; it would make our products better."

Later, when asked if Google might need to buy Twitter or some other company, he said: "Our social strategy doesn't acquire the acquisition of any company, because we can get people to give us that information."