Tuesday, December 13, 2016

blue suede heels


nikesh arora: well, thankyou very much, jamie, for hosting a wonderful panel. and to our panelists, andof course to [? roberta ?] for a wonderful performance. with the rising cost ofzeitgeist this year, we figured we'd try and findmulti-talented speakers who could fill in forentertainment. so, this was your entertainmentfor the evening, ladies and gentlemen.

it is hard to top off a daylike this, where we started with the prime minister andwe had [unintelligible] and a whole host ofwonderful people during the day, as speakers. i did say there was nobodyfrom google, but i guess i wasn't accurate. there will be somebodyfrom google. i'm going to invite ourchairman and ceo, dr. eric schmidt, to comeplease take the stage.

and he has a specialsurprise for us. eric schmidt: thank you. thank you. that panel, and the minister,reminds us why we're alive. it's so great that youwere here, and so great that we could do this. and so great for you all tospend your whole day and tomorrow with us, as well. as a quick summary of google:in the last year, since we

were here last year, wetalked about search. lots and lots of searchimprovements, lots of new products in the search. lots of interesting andunanswered questions about search that we're working on. advertising. many more advertisingtechnologies, many more advertising ideas. much deeper, much more powerfulnotions of how to get

advertising messagesto consumers. and, of course, theacquisition of doubleclick. the emergence of a new wholestrategy for google, involving applications called cloudcomputing, with tremendous implications of how people willstore information, and so forth. the sum of all of that iswhat we're doing now. and rather than having me talkabout it, i thought it'd be much better to bring my twocolleagues, who have shown up

in matching shirts,matching shoes. sergey and larry. one woke up in russia, onewoke up in london, and they dressed the same. [applause] we should take one minute tothank nikesh, lorraine, dj, all the people who put such atremendous amount of effort to make this all happen. and especially with theevening's activities

ahead of us. a phenomenal job,nikesh and team. so, rather than having usspeak, people have comments or questions-- we havemicrophones-- on any subject. anything you all careabout to discuss. we're happy toanswer questions. ok, we have a question. unfortunately, you don't have amicrophone because sergey-- ok, here-- we're working-- oh,here's a microphone over here.

ok, good. progress. audience: hi, i'm brianmcbride from amazon. i just wondered if you couldtalk about your thoughts and implications of yahoo! anda microsoft get-together. sergey brin: test. test, test. oh. yeah, what do you mean?

yahoo! microsoft? eric: sergey, youwere traveling. sergey brin: i was traveling. i actually did-- this on-goingsaga-- i did-- i was surprised to find out when i flew intoday that there was some new developments that i have yetto be fully briefed on. eric: by me. sergey brin: by you.

so, eric, why don't you? i can think of no better time. eric: ok. let's see. a couple of things. there's been rumors thatmicrosoft is going to do another approach at yahoo! we've taken a position that themarkets are more competitive, creativity is stronger, it'sbetter for consumers if

yahoo! remains independent. david drummond, who's here,wrote-- i thought-- a pretty persuasive blog, given thehistory of microsoft and its behavior, that that wasa pretty good outcome. and i think we stand bywhat david has to say. do you agree, larry, orhave you had a chance to look at it yet? larry page: yeah. no, i agree.

great. with us, you never quite know. let's see, you had a question? yes, sir. audience: hi. it's marco from [? dada. ?] a personal question,to each of you. what's the single technologicalthing that excites you the most today?

the one you like the most? sergey brin: i got this kind ofstrange thing at home recently. i bought this reallybig monitor. it's kind of quad-hd. so, it's like 4,000by 2,000 resolution. and it was very, very hard toget and actually make it work with a computer and whatnot. but i finally have gottenit working and it's kind of interesting.

it makes you-- it changes howyou can work if you actually have a really big highresolution display that size. so, that's one toy, if youwill, that i'm playing with. larry page: you can'treally see if you have windows at the top. you can't really see thembecause they're too far away. sergey brin: well, yeah. but then you dragthem to yourself. you do.

it's true. eric: larry, larry? larry page: oh, that'sa hard question. actually, one of the thingsi've been really excited about that we've been workinghard on is street view. which is now, you know, it'sbeen shown in europe a little bit, and so on. and driving in general, ithink, is a very, very interesting thingfor computers.

so, one of the things i did,i visited this thing called the grand challenge. which was, basically, it was acontest for $5 million, for the car that can driveitself the best. with no peopleinside, by the way. and they're actuallyamazingly good. they basically simulated acity, and the cars just drove around all day. and the best cars actuallydrove all day with

basically no errors. in traffic. so, they had human driverswearing helmets and stuff, driving around with them,and hoping the cars wouldn't run into them. but i think the possibilitiesfor some of these technologies are just amazing. there's about 1 million peoplea year that die in auto-related accidents, and certainly we cando better than that now

that we have computers. so, for me it's just seeingthings that you didn't think were possible that computerscan do, and thinking about what the possibilities of those are. audience: thanks a lot. eric: a question over here. audience: yes, hi. i was just wondering if youwould like to comment about what you're doing onalternative energies.

larry page: oh, sure. so, we recently launchedthis initiative called re less than c. it's kind of a geeky way ofsaying that we want renewable energy to be cheaper than coal. and the reason behind this iskind of interesting for us. we had all these data centersthat were launching all the time in all parts of theworld to serve our users. and they basicallyuse a lot of energy.

and so we have people shoppingaround for electricity and buildings and space and so on. and what they notice is thatbasically all the electricity is generated by coal, ina wide variety of places. and that's the cheapestenergy that we have. and in places like china, ofcourse, that's what they're primarily building:coal-fired plants. and it has a lotof implications. it's really a dirty technology.

a lot of carbon emissionseven besides it being dirty. and we started and we wantedto make green data centers. so, we said, well, we shouldreally do better than this. and we started talking to allthe companies in the space, which-- there are many. there's a lot of investment. and it's actuallyvery promising. there are many, manytechnologies in solar and in wind and in geothermal, thatcan really make energy cheaper

than we get it now from coal. and do it at a scalethat's similar to all the energy we use today. so, we can imagine makingrenewable energy that's cheaper than we produce now. and doing it at a scale that'sas much energy or more energy than we produce today. and that's really about gettingpeople to work on that now rather than 5 years from now.

there's a lot of investment inproducing expensive green energy, but if you talk to thepeople who are doing that and say, well, can you makeit a lot cheaper? they say, yeah, we can probablydo that, but we're going to work on that five years fromnow, once we finish the expensive green energy. and what we've been doing ismaking some investments and hiring people, and tellingthem to start working on that now because the worldcan't wait for that.

so, that's-- i think-- is areally exciting area for us and one that couldreally be a big thing. go ahead. audience: kent nicholswith askaninja.com. could i get each of you to goon record as to if you're for ninjas or pirates? larry page: i'm for whateverthe opposite of sergey is. sergey brin: i guess ifi had to choose, i'd probably take the ninja.

eric: but this is aserious question. he seriously asked you. are you sure? sergey brin: ah, no,i'm not certain. what happens after ichoose one or the other? i'm imagining someone jumpsfrom behind the stage. audience: yeah, i mean, aninja could be anywhere, but, you know, piratesare about-- mr. schmidt? eric: i'm too old.

audience: i see. eric: more questions? audience: i have a question. [unintelligible] from [unintelligible] turkey. you're shown as the bestexample when it comes to an innovative company, and ihad the chance to visit headquarters last year.

i'm not sure about theinnovation part, but the environment, it's great. and my question is, we heara lot in the news about why google is innovative. and there are a lot of goodthings said about the company, but two examples are given themost, which is 20% of people's times are spent onpersonal projects. which might actually helpgoogle in the future. the second one is 10% of themoney is usually spent on what

you call the [unintelligible] projects, if iremember correctly. my question is, whoseidea were those two? the second question is, werethere any similar ideas which you weren't able to implement,which you're sorry about? and the third question is,again in the media, there's a lot of discussion going onabout now that you are becoming-- or you're growing--you are having problems with some of these implementations.

do you plan to change those ordo you think these are the core values of google, andyou want to keep those? sergey brin: ok. i'll do a little bitabout the history. i came up with the numbers buti think the concepts were all shared between all of us. i just decided toquantify them. eric: actually, what happenedwas i didn't believe sergey. so, he-- we were in amanagement off-site-- and

sergey actually stood up andproved, mathematically, the numbers. and since no one understoodthe math but sergey, it was obviously correct. larry page: that is anaccurate rendition. sergey brin: i think it's--so, there are two rules we have at google, kind of. one is called the 20% rule,that's for individuals to spend a portion of their time workingon-- not their main projects--

but other projects that areuseful to google, that they take the initiative on. and the other is similarsounding, but that's the 70/20/10 rule. and that's how we divideour overall resources of the company. not just financially, butalso headcount, and whatnot. and we want to spend 70% of ourresources working on our core, which we generally defined assearch and ads, but now

probably apps fit intothat category, as well. 20% of our effort goto adjacent areas. for example, maybe, androidis an example of that. and 10% is things that arecompletely unrelated. anything goes. and, like renewable energy. though obviously we use a lotof energy, but it's kind of in the 10% category. and the idea is tostrike a balance.

there are two wayscompanies can go. they can get so fragmented theygo from doing one thing to 25 different things, and thenthey're not focused. at the same time, they couldbecome myopic and not try new areas at all, where you mightdo well and you might have great resources andideas for them. so, the idea behind our rulewas to kind of set the balance. and i didn't prove the exactnumbers, but the fact that we should always maintain aroughly constant ratio i did

have a mathematicalargument for. and that you shouldn't have the10%, the out-there things, dwindle, say, down to 1%, asyou become a very large company-- as i think doeshappen to large companies often-- i think thatwas pretty important. eric: and the other part of thequestion was the issues that have been written about today,about the scale of the company, and are those--are those in discussion? larry page: i think, you know,as we get bigger-- every time

we double in size, kind of,everything changes-- most of the things we're doingdon't work anymore. and that's happened to us anumber of times already. things like we're muchmore global now, so time zones are a huge issue. like eric's been yellingthat you can't meet with europeans after noon or so. and those are actually realissues for us, like we have to--

eric: he means afternoon in california. larry page: u.s. yeah, sorry. eric: that was not areference to siesta. [laughter] larry page: europeans arevery cranky after noon. eric: after lunch. larry page: but we've had, imean, those are real issues. like, we've had to rearrangehow we do our meetings and with what people and what times,and things like that.

and there's just-- it soundskind of trite-- but there's 100 issues like that that you needto address as the scale changes. and it's, i think, it'salways a challenge to keep up with those. you're always-- in asense-- you're behind. what you need to be doingat any given time around communications andorganization and all that. i think we've had a lot ofcomputer systems that have

really helped usdo that, though. we have something called theproject database, which basically contains whateverybody's doing. so, anybody can look at aproject and you can see who's working on it and what theirmilestones are and so on, and that's been really helpful. we also have an automatedsystem that makes sure people's reviews get done, theirperformance reviews and so-- they're peer reviews-- sothey're based on your peers.

and your managers and everybodymakes written feedback, and the system collects all thattogether and there's a process by which it gets reviewed. but i think having a little bitof automation around some of the basic tasks of the companyhave really helped us scale, but it's always a challenge. eric: question? audience: my name ismark [? menesse ?] from paris.

you've been part of a hugerevolution, as we did, but in a micro proportion. i wanted to know followingto you, what is the next revolution? sergey brin: oh, boy. ok. i'll throw out one idea. but, you know, my guessis as good as anyone's. nanotechnology?

that might be a good one. i don't know, maybe youshould ask the ninja. eric: larry? the next revolution? larry page: oh, it's probably-- eric: after you get finishedwith all those cars with no drivers in it? are people going to besitting in the back? larry page: actually, i mean, ithink any of the things that

are speculated on being thenext revolution, you know, biotechnology, nanotechnology--many, many, many different areas-- any of those couldbe the next revolution. but generally nobody'sworking on it. so, one of the things i've beentrying to do is to get more people working on thingsthat could really matter. so, the question i like to askpeople is, is the project you're working on goingto change the world? and, you know, you sort of askpeople that question, and i

think you end up with some verysmall percentage of the population, like .00001%,that's really working on those things. so, the rate at which weaccomplish those changes is very, very slowbecause of that. and this is sergey'spoint in the large. so, how do you get the worldallocating 10% of its resources to the sort of wacky thingsthat we're clear if they would work they wouldchange the world.

and that number is.00001%, instead of 10%. and, from my standpoint, ithink we've got to get more people into engineeringand into technology. because that's where we'veseen really big changes. you know, we don't all haveto farm now, because we have technology to do farming. and that's true formany different areas. i mentioned driving already. there's a lot of labor usedin driving that doesn't

need to be used that way. so, you can kind of look at thedifferent areas and say, where can we really makea big impact? and how do we getpeople to do that? so, i think the quick answer isyou can decide which area is going to be the breakthroughby actually working on it. eric: the other debate that wehave all the time, where i'm always the loser, is that larryand sergey say, we have all this money and cash now, what--we should be taking more risks

than we did when wewere a start-up. because when we were astart-up, we were like, about to go bankrupt all the time. sergey brin: 10% of a bigcompany is a lot more risk than 10% of a small company. eric: anyway, i alwayslose this battle. audience: my name ismohammed [? al-jassan ?] from jordan and google launchesso many different applications and features, and i was justwondering what sort of criteria

do you look at before launchinga new application or a feature on google's many sites? sergey brin: ok, good question. yeah, how do we launch newproducts and features? typically, the initial ideasare kind of born out of a brainstorm, or somebody putstogether a demo and eventually they'll get a go-aheadto start to build it. once we've developed it enough,we will typically test it by putting it out to, say, a smallpercentage of our user base.

certainly for existing productslike search, we'll just put it through a series of tests, andwe'll measure, you know, how many-- how much more quicklywere people able to find information using this thing? do they come back more or lessoften as a result of that? things like that. and once we're confident thatwhat we've built has a good benefit, then we'll goahead and launch it. eric: go ahead.

audience: just to continue withyour theme of innovation. you've recently had a fewhigh-profile departures from google. do you worry that maybe as youbecome a bigger company, the people who want to do that 10%,who want to make a real impact in the world, feel like they'llhave a better chance of doing it outside google, ratherthan inside google? sergey brin: i think we've haddepartures recently that have been more highly-profiled, butwe actually-- you know, in

overall attrition, when i thinkabout it-- we're actually roughly just as we'vebeen all along. we've had very high levelpeople leave in the past, i just think-- don't think itgot noticed quite as much in the press. but the important part of thequestion is can people really feel free to innovate? and we've recently started tohave-- we have a group of about 5 initiatives that we let runsomewhat more independently.

kind of just to experiment withother models and also allow people who have a solid trackrecord within google, once they've demonstrated a success,we say, you know, ok, you're going to do this a littledifferent than we normally do it, but we're going tolet you have a go at it. like i said, we have probablyabout 5 such things going right now. and i think, as a result, thesepeople are able to better invent than they wouldat a separate start-up.

because here they get a gooddegree of autonomy, plus all the resources that googlecan bring to bear. now, you know, those things arefairly recent, so we have yet to really know theirtrue success, but i'm fairly optimistic. larry page: let me say, too,i think that this is a work in progress aroundcorporate structure. so, i do think that there's anissue that we have a start-up model and we have the companymodel where there isn't

much innovation. we don't have anythingin between that's been really successful. and actually we've tried anumber of different things. sergey mentioned we haveabout 5 things going. actually they all kind of havea slightly different structure. and there's several incontemplation that are starting to have even slightly differentstructures than the ones we're running.

so, i think it's a balance:how do you get the compensation right? how do you-- howmilestones based is it? you know, what is the realstructure of how you do these things within companies? we don't really know exactlyhow to do it yet, but we know we'll keep tryinguntil we get it. and i think it's pretty much anunsolved problem for companies. i think it's a very importantone to solve, so that

big companies can get astructure that works. or bigger companies can get astructure that works, and really produce a lot ofinnovation and a lot of things that will make a bigdifference in the world. audience: what's the one thingeach of you worry about most? eric: in my case,larry and sergey. no, just kidding. sergey brin: eric and larry. larry page: sergey and eric.

eric: that question wasfor the two of you. what do you worrythe most about? sergey brin: the thing i worrymost about is opportunity cost. i think that we have somefairly unique opportunities that not all companieshave in terms of some of the resources we have. kind of, we have the brand,the financial resources, the technical expertise. and i worry that we mightbecome a little too myopic and

not use that to maximum effect. you know, the fact that we dohave the ability to say, scan all the world's books andmake them searchable for everyone in the world. you know, things like that,those are exciting to me. and i worry that we may notbe making other similar bets that we could be making. and i think there are manythings that other companies can do that i'd like to make surewe leave it for those third

party companies to do. because if there are plenty ofother people capable of doing certain things there's noreason that we have to do them. larry page: i think the mainthing i worry about is the open internet, basically. actually, i remember in theearly days of google, we worried that all theinformation would got locked up in kind of a proprietary way. and it would be hardto index, and so on.

and that hasn'thappened, obviously. there's still very manyways that it could happen. for example, when we startedgoogle, it worked pretty well everywhere in the world. i mean, we were just acouple of grad students. and then we were 10 people or20 people, and we had several million users, and theywere actually many users all around the world. if we were required to pay forgood transit, in order to make

our service fast, there's noway we could have done that. we didn't even really, couldn'teven answer our phone. we didn't have enough people. so, some of the proposals i seearound-- you know, where isps and so on want to extract moneyfor good transmission-- i think really could really harmthat innovation and new companies coming about. the fact that you can plug onecomputer in somewhere and just magically it can talk toeveryone in the world pretty

well-- that's somethingwe take for granted now. but it's a tremendouslyimportant thing for the world. and it's not necessarily goingto continue to be that way. so, that was one thing. i also think we justreally want to preserve open standards, too. the reason why the internetworks is because it was invented in universities. the standards we have for emailand things like that work

openly because they wereinvented in universities. and that's why you have spamalso, because they could never imagine there'd be badpeople on the internet. so, they didn't reallythink about those issues. but the standards that cameabout more in companies, like instant messaging, havebeen very, very closed. we've announced for a long timethat we'll interoperate with anyone who'll interoperatewith us on instant messaging. you know, amazing!

you should be able to instantmessage anybody, not just people who happen to beon the same network. just like with email. and, you know, we haven'tgotten takers from the big companies. and so i think there's still alot of risk around communications being closed andthat's a great way to make sure those productsnever get better. so, those are the kinds ofthings that i worry about.

audience: my name'sjim [? brickton. ?] i'm from an agency calledthe search works. we spent a lot of money withgoogle last year, about $200 million worth of revenuefor google last year-- eric: thank you very much. audience: --on behalfof our clients. and, you know, there's a lotof agencies in this room. we got a rebate last year, ofabout $14 million from google, which we reinvested in ourpeople, and our technology,

and our clients. and that's being takenaway-- all the rebates-- as of next year. and i know there's a lot ofpain at my agency-- i'm sure there are other agencies herethat are hurting because of that. so, i just wanted to ask, areyou aware of that change in pricing structure? and can you talk me through thereasons behind it, because my

clients are a bit confused. eric: this has been acontroversial decision within the company. we looked at it from thestandpoint of where we thought the value added was, and whatthe total cost structure was, and we compared all thevarious different groups. i'm aware of some of theeconomic changes and i understand that it's painful. the theory here is that themarket's growing quickly

enough, that although thepercentages are smaller, the aggregate-- it's growingquickly enough that there's enough money to cover expensesand have a good profitability. and we can talk offline aboutsome of the-- [laughter] audience: i'd reallylike that, please. eric: but the basic argumentwas we couldn't-- the economic structure had gottenskewed again. and it wasn't a fair playingfield, and that's why we had to make the change.

again, a very, verycomplicated argument. let's see, we had aquestion over here. audience: you spent quite alot of money on the youtube acquisition, and alsoon the myspace deal. what is your planfor monetizing that kind of traffic? on the one side, onlinevideo, and on the other hand, user-generatedcontent in general. eric: one of the most importantunder-- and in my view, not as

well-covered-- stories in thelast year, has been the tremendous growth of youtube. it's shocking to me howmuch is going on in video around the world. the growth and so forth, atvarious points, has almost put google in harm's way, in termsof our ability to actually run all of google. the traffic explosionhas been so great. and as larry put it earlier,we've managed to actually

re-engineer our systems and soforth to handle this traffic. so, what's new this year? and the answer is youtube. out of that we have a number ofinitiatives around advertising, that are not what you think. they're not pre-role orpost-role, which we're beginning to try. so, the outlook thereis very good, but the tests have to proceed.

do you guys want to talk alittle bit about myspace? larry page: i was just goingto say about youtube-- eric: we're already inthat business, go ahead. larry page: i was going to sayon youtube, too, i think the-- you know, google actually ranfor a while before we started running advertisements. and then we tried a couple ofdifferent things and then one of them kind ofworked out well. i think we're in that samephase with youtube, and i'm

very confident that we'llget revenue from that. but i'm not in a hurry to doit, i want to do it right. and i think that's the attitudewe've taken enough, so you know, we told those guyswe want to build traffic. you guys are building tonsand tons of traffic. that's the mostimportant thing. and we're sure we canmonetize it over time. so, i think we've been prettyhappy with that progress. sergey brin: if i can just takea moment to step back to the

agency fees question, just toadd a little more color there. so, we sell our advertisingprincipally by auction. and essentially, we havecustomers-- we've done it historically slightlydifferently, depending on the country-- but this effort waspart of unifying that. we have some customers that useagencies that then will bid on keywords on google, and somecustomers will represent themselves directly. ultimately, to make an auctionfair, we need to make--

or compare the actualmoney that we make. i mean, just because-- if wesend money back to the agency, then maybe we should besending money back to the direct customer, also acomparable percentage. ultimately, we decided weneeded to compare it, kind of apples to apples. because we didn't want todisadvantage the customer coming to us directly versusthe one coming in through the agency, in terms of how theirbids got set in the auction.

now, this new system, it's notthat the agency doesn't get paid at all, but we leave thatpayment portion to the relationship between theagency and the customer. and that way it'smore transparent. that was the thinking behindit, i mean, there certainly is-- as eric mentioned-- we'rehappy to discuss it further. but this wasn't just some kindof scheme for google to get more money, this was reallyabout how we fairly deal between different customers.

eric: let's make sure weanswer the myspace question. so, we're in the myspaceadvertising business. it's gone well. and again, as we are learningthe tech-- as we're learning how to monetize socialnetworking traffic, it will ultimately be much,much better. it's taken us a while. we said that before. is that a fair summary?

sergey? larry? oh, let's see. audience: my name is ramuyalamanchi from hi5. and i have two questions. eric: from? you're from? audience: ramuyalamanchi from hi5. eric: yes, hi.

audience: i have acouple of questions. the first one is for larry. and in thinking about, ingetting people to think about problems that matter, andworking on problems that matter, how do you actuallydo that for people that are outside of google? and my second questionis for the whole group. and that's what's the singleaccomplishment that makes you most proud, in, kind of,all the things that have

happened over the years? larry page: i don't reallyhave a great answer for the outside of google. it's actually hard eveninside of google. i find pushing people a lothelps, you know you just really need to tell people, like, whyaren't you working on this? why don't you work onsomething bigger? why don't you-- and it'sjust a constant effort. outside, you know, i've startedtalking about it more.

so, i've done an interviewin fortune this last month. i've been working with the xprize to try to define some big challenges for the world. there's also agovernment-funded group called grand challenges forengineering, which is part of the national academy ofengineering, where they're just trying to find the 10 areasthat'd be really great if they were solved. one of them is reverseengineering the brain.

and things like that. and we went through with awhole bunch of really smart people and tried to define someinteresting things for people to work on that wouldreally matter. so, i think it's just,you know, just trying to work on it. eric: sergey? sergey brin: let's see, maybe ishould talk about what kinds of things we're most proud of.

i think that being able todeliver what i hope you think are excellent products-- idon't want to judge them myself-- but things like searchto everyone in the world. well, everyone with an internetconnection anyhow, and we're working on broadening thenumber of people who have internet connections,and that's free. so, the most-- you know,whatever the president of whichever country, or theprime minister, they all probably use google.

i don't know for sure. all of the, no matter howwealthy you are-- you know, i use the same search engine assomebody, an orphan in nigeria, might use ifthey're at the internet. everyone is able to afford thisincredible kind of resource. and the same thing, by theway, is true of gmail. everybody's able to affordthat kind of great communications tool. so, i'm pretty proud that we'vebeen able to not only create

great tools but also deploythem widely to everyone in the world. eric: i think for me i'm mostproud of just being involved with the internet as a whole. i think everybody hereunderstands the power of the internet. try to remember when you didn'tuse the internet and you couldn't rely on it in any way. it's a pretty harsh vision.

audience: guy phillipson,the chief executive of the internet advertising bureau. i just want your views on, iguess, keyword search versus display within your company. and keywords has beenphenomenal growth, it's huge in the uk. we know that. but broadband, you know, makesonline a proper entertainment system and we can see richmedia, video, hence

the acquisition ofyoutube, and so on. and you've got doubleclick,as well, and an ad exchange. and so, where does it all fit? and, you know, how do you seethe ratios working in the future, say, for the next5 years, within google? eric: we agree withyour premise. right? that it's going to bethis amazing platform for advertisers.

we don't necessarily knowexactly what the products are going to look like ontop of that substrate. we know that advertisers wantto use more than text, more than video, more than display. they want to be able to do--think of it as a package, and they want to get itin the right way. we also know that people aredoing creatives, and so there are now agencies-- many of whomare here in the room-- who are doing very interesting thingswith, for example, gadgets,

and gadget ads, andthings like that. click to play video ads. so, we're part ofthose experiments. how will it come together? it's pretty obvious to me thatdisplay advertising will be a very large business. and again, google todayis not the leader there. it's going to be a very largebusiness globally, for a number of players, simply becausepeople care about images, and

video, and so forth and so on. and the company that can figureout all the combinations to produce a valuable targetingsolution that will target that media is probably going toend up being the winner. do you guys agree? audience: and ultimately do yousee keyword search maxing out? you know, way in the future? and, hence-- eric: there's noevidence of that.

there may be some limits, butwe benefit from the fact that the internet is growing very,very quickly, especially outside the united states. broadband adoption is growingagain very, very quickly. and pcs, macintoshs, cellphones, all of that. if you think about it, if youassume that the internet only has about 1.3 billion users,and there's on the order of 6.5 billion people on theplanet, you're only a quarter penetrated.

so, what happens whenanother billion or two people come online? audience: so, raising theaudience is actually just going to-- eric: absolutely. and the pie really doesget a lot bigger. and we take it forgranted here. everybody here uses it,everybody here has a mobile phone, and so forth.

that's not true for a lotof humanity, and it's time to get that fixed. larry page: you should say,too, i mean, if you do a search for something you're trying tobuy-- i mean, i only get ads maybe 80% of the time-- i don'tknow, 60% of the time-- something like that. that's in the u.s., which is areally highly developed market. the uk obviously is similar. but there's a lot of thingsthat i buy and i search for

that i don't get any ads for. and so there's a lot ofopportunity there still. and i think our ad systems arereally probably optimal for medium-sized advertisers. and for really smalladvertisers and really big advertisers, there's just a lotof things that need to be done to really create the coveragethat can generate conversions and clicks and so on. eric: you'll have the honorof the last question.

audience: my nameis [? arnt, ?] from germany. and the last question'sgoing to be a pretty personal question. the incredible success ofgoogle has made you wealthy beyond imagination in avery short amount of time. has that changed your lifeto the better or the worse? larry page: sergey has to spendmore time with his monitor. he's the first one who hasone, so it takes a long time.

sergey brin: yeah, it actually,it cuts both ways to be fair. it probably balancesout somewhat neutral. you know, certainly,yeah, i've got somewhat bigger and better toys. but they come with mehaving to do more of the testing and debugging. eric: you could hire someoneto do that for you. sergey brin: i don't know. that's-- i'd feelawkward about that.

i think, yeah, there area few lifestyle changes. i've tried to limit some ofmy lifestyle changes and not change too much. i've certainly seen a lot ofpeople who have great wealth who seem relatively unhappy. and, in fact, you know, it'skind of as you drive through different neighborhoods, youcan kind of see where people are more secluded because theyhave bigger houses, bigger lots, and they're wealthier.

they have less socialactivities than a lot of the more populated, more urbanareas, that are typically poorer in the u.s. so, i thinkit requires great care for people who come into suddenwealth, if you will, to avoid those kinds of traps. larry page: i was going to say,i think what i mostly feel is just a great sense ofresponsibility-- i mean, you have all this resource-- touse it well, and to think about that.

and that's been, that's beenreally-- i mean, i like challenges, so it's beena great challenge. but also not something thati expected to have to do. we've been spending a lotof time on things like our google.org efforts. some of the energy things,and other things. i've been spending a lot oftime in africa, because i feel like i really needto understand that. so, you know, i've beentaking some vacations there,

and things like that. which has been interesting. but not what i would havethought i was doing, if you had asked me 10 years ago. so, i think having thatresponsibility is a really exciting thing. it causes you to do a lot ofthings that you might not otherwise do that are good. there's also a tremendouschallenge and responsibility

that you feel about it. eric: i want to thank larryand sergey and nikesh, and i both want to thank larryand sergey who made this special trip, just literally tocome here for this meeting. so thank you both. sergey brin: and, if i may,just very quickly, i hope you've all been enjoyingthe conference. i hope you appreciate that aspayment you have to sit here and listen to us torture youwith this q&a for about an

hour, but it's freefrom here on out. eric: nikesh, do you want to sort of--thanks, everybody.

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