Dec 052012

Eric Schmidt is Google’s potent quotable. Whenever he speaks on a topic, it’s guaranteed he’ll say at least one thing that makes the brass at Google wish they’d deployed a team of men with tranquilizer guns to follow him around to speaking venues. Schmidt’s latest brain-dump was foisted upon the Wall Street Journal yesterday. Let’s see what’s on his mind:

As Google Inc. battles rivals ranging from Apple Inc. to Internet companies that allege it fixes its search results, Eric Schmidt has become the search giant’s peacemaker and explainer-in-chief. Google’s former CEO and current executive chairman met with lawmakers in Washington last week as the Federal Trade Commission appeared closer to a decision on whether to file an antitrust suit against the company.

I can personally think of no one I’d rather see representing Google in these talks.

In September, Mr. Schmidt was in South Korea to launch a new Google tablet and meet with Android partner Samsung Electronics Co. That trip included a pit stop to dance with PSY, the South Korean rapper whose “Gangnam Style” is the most viewed YouTube video of all time.

Watching him dance is almost as painful as listening to him speak. He puts the “white man’s overbite” to shame.

As growth slows in its advertising business, Google has pushed further into hardware for its popular Android mobile operating system. Android represented 75% of smartphone shipments in the third quarter, according to IDC. Google’s acquisition of hardware giant Motorola MSI Mobility, which it bought for $12.5 billion in May, put the Mountain View, Calif., company at odds with its erstwhile partner Apple.

The company was put “at odds with” Apple with the release of Android 1.0, released 5 years ago.

The iPhone maker has pursued numerous lawsuits against hardware makers who use Android, claiming they rip off its own designs.

Mr. Schmidt, 57 years old, recently sat down to discuss a potential antitrust suit, the Google-Apple rivalry, and whether he would consider a government post. Edited excerpts:

WSJ: How big a threat is an antitrust lawsuit right now?

Mr. Schmidt: I don’t know. We have been in quite continuous communications with both the Europeans and the Federal Trade Commission. It’s time for them to sort of move to one resolution or another. It’s not like they don’t have a million documents and so forth. I remain optimistic.

If you’ve never seen a Schmidt interview transcript before, this is what you’re in for. Whereas I’m sure his in-person conversational style would make him someone easy to talk to, his on-the-record bytes make him sound like he doesn’t know what he’s talking about. “It’s time for them to sort of move to one resolution or another.”? Is Schmidt telling the government to “just get on with it”? Nothing comes off quite as well with regulators when your company spokesman taunts them via the Wall Street Journal. C’mon: it’s not like you don’t have a million documents and so forth!

WSJ: How has Google’s relationship with Apple changed in the past year?

Mr. Schmidt: It’s always been on and off. Obviously, we would have preferred them to use our maps. They threw YouTube off the home screen [of iPhones and iPads]. I’m not quite sure why they did that.

It hasn’t always “been on and off”. It was “on” when Schmidt was a member of Apple’s board and when Apple released the iPhone, using their BFF’s features such as YouTube and Maps as a major part of their offering. Then Google released Android. That’s pretty much when the switch turned to “off”.  Schmidt knows exactly why Apple dumped YouTube and Maps for that matter.  Apple’s overarching strategy is to integrate everything into their OS to better control the user experience. I’m sure the company hit the gas with Google because they ripped them off. Although you wouldn’t know it by reading the interview, Even Schmidt isn’t that clueless.

The press would like to write the sort of teenage model of competition, which is, ‘I have a gun, you have a gun, who shoots first?’

The adult way to run a business is to run it more like a country. They have disputes, yet they’ve actually been able to have huge trade with each other. They’re not sending bombs at each other.

Where by “trade” we mean “steal egregiously from”.

I think both Tim [Cook, Apple’s CEO] and Larry [Page, Google’s CEO], the sort of successors to Steve [Jobs] and me if you will, have an understanding of this state model. When they and their teams meet, they have just a long list of things to talk about.

Tim: How about you assholes stop ripping us off?
Larry: No
Tim: Thanks for coming in.

WSJ: Are Apple and Google discussing a patent-related settlement?

Mr. Schmidt: Apple and Google are well aware of the legal strategies of each other. Part of the conversations that are going on all the time is to talk about them.

When your OEM’s have been bent over in court as often as ours have, it breeds an intimate level of familiarity.

It’s extremely curious that Apple has chosen to sue Google’s partners and not Google itself.

There seems to be a lot that Eric doesn’t know. Let me give him one brief explanation, lest he not be familiar with his own business model: Google gives Android away for free (we’re not counting the money OEM’s have to pay Microsoft in licensing). It’d be much more difficult to sue for damages against Google than it would be to go after their OEM’s. Besides, although Android is the most laughably insulting example of grand theft OS, their partners were found guilty of ripping off hardware design elements too. Of course Schmidt knows this; he’s just being faux coy and disingenuous, which if there’s an MO for him, that’s it.

WSJ: What’s the endgame of all of this patent litigation?

Mr. Schmidt: It’ll continue for a while. Google is doing fine. Apple is doing fine. Let me tell you the loser here.

There’s a young [Android co-founder] Andy Rubin trying to form a new version of Danger [the smartphone company Mr. Rubin co-founded before Android]. How is he or she going to be able to get the patent coverage necessary to offer version one of their product? That’s the real consequence of this.

That’s rich. How is the next Andy Rubin, who is working at Apple right now, going to leech ideas from the company so he can use them to compete against it in the future? With all this messy “defending intellectual property” nonsense, how’s he going to invent the next Apple knock-off? Kudos to the Wall Street Journal for letting Schmidt off the hook on the klaxon-sounding SEP follow-up question, by the way. Let me serve it up for them:

Mr. Schmidt: …How is he or she going to be able to get the patent coverage necessary to offer version one of their product? That’s the real consequence of this.

WSJ: But isn’t your company currently deploying standards-essential patents – ones that were designed to promote fair and reasonable licensing terms in exchange for wider adoption – to stifle competitors exactly the same way?

It isn’t like the Wall Street Journal is the Topeka Plain Dealer – companies like Google are always going to need major press outlets like the Wall Street Journal to spout off whatever it is they want people to think about them. You really can ask tough questions, guys. It’s OK to take the kid gloves off in the interest of real journalism, if you’re at all interested in that sort of thing anymore.

WSJ: Is Google looking at owning a wireless network?

Mr. Schmidt: I’m sure we will discuss this, but at the moment we’re busy working on wireline [Internet]. This Kansas City stuff [where Google is rolling out a high-speed fiber network] is extraordinarily exciting, and we’re focusing on that.

The current spectrum shortage [currently facing the mobile industry] is real, but it’s an artifact of a licensing and regulatory error. New technology allows there to be lots of spectrum, far more than you could use.

When interviewers need [to bracket you] as much as they quote [you], that’s a sign that you need [to explain what the fuck you’re talking about a little more thoroughly.] That’s kind of part of the “Explainer-in-Chief” job description.

WSJ: Despite’s Android’s growth, app developers complain that they have to build different versions for different Android devices.

Mr. Schmidt: Because some of the phones are down the road. But if everybody’s at [version] 4.0 or 4.1, it is in fact compatible.

Down the road from where? Is this really a senior executive of one of the most identifiable brands on the planet talking to the Wall Street Journal? The problem is, Eric, that 6 months after your OEM “partners” shit out the Supernova Xtreme Ultra 2 HD, no one – including you – has any interest in kicking the ass required to ensure that compatibility. That’s why 75% of your handsets aren’t “at 4.0 or 4.1”. And this doesn’t even broach the question of developing for the bazillion different Android handsets, which is probably what the interviewer meant by “build different versions for different Android devices.” No biggie – just answer however you want.

WSJ: Developers currently earn more from building Apple apps than Android apps.

Mr. Schmidt: Google Play [Google’s app store] and the monetization just started working well in the last year, maybe the last six months. The volume is indisputable, and with the volume comes the opportunity and the luxury of time.

Which does nothing to invalidate your statement at all. I’d tend to think Schmidt’s “luxury of time” is an Android developer’s “waste of time”.

WSJ: Do you see Apple’s Siri virtual assistant as a competitor to Google search?

Mr. Schmidt: Well, it’s competition. I mean, in the antitrust filings, we actually use Siri as an example of future “non-conforming to the Web” competition , which we do worry about.

Not worried enough about it to throw it up as a laughable example of competition in a sad attempt to save you from the anti-trust scimitar. And how is Siri “‘non-conforming to the Web'”? Maybe the WSJ could have employed some of those helpful brackets to make sense of what Schmidt was going on about.

WSJ: How does Google respond to hardware partners wondering whether you are now competing with them?

Mr. Schmidt: We are and we’re not. When we bought Motorola, I personally flew to Samsung, who’s the number-one partner of Android by volume.

I told them that the [Android] ecosystem has to be favored at all costs…the Motorola products can’t be unduly favored, unless you’re also unduly favoring Samsung. If it looks unfair, and then the ecosystem unravels, then it’s a terrible mistake.

It does look unfair, and I’m sure Samsung was as impressed with Schmidt’s appearance as they were with his dancing. I will hand it to Schmidt, though: Google is taking great pains to treat Motorola as poorly as they do other OEM’s not named Samsung. They’re even willing to write off billions in Moto losses to do it! That’s how much Google cares about its partners.

WSJ: What do you think of Microsoft’s new operating system Windows 8 and Windows Phone 8?

Mr. Schmidt: I have not used it, but I think that Microsoft has not emerged as a trendsetter in this new model yet.

Just like Android set a trend – of shamelessly copying off its competition’s innovative offerings.

WSJ: There is regular speculation that you might be tapped for a government post. Are you interested?

Mr. Schmidt: I said last time and I’ve said again that Google is my home. I have no interest in working for the federal government.

That’s a shame, because I can think of no one in the tech sector who could blossom in the political arena like Schmidt could. Who else could conduct a 1,000-word interview and not say anything at all?

 Posted by at 10:25 am

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