>> ARRINGTON: Thank you for coming Eric. >> SCHMIDT: Thanks Michael and congratulations.>> ARRINGTON: Thank you. >> SCHMIDT: You want me to just start?>> ARRINGTON: I was--Yeah, I was told... >> SCHMIDT: Okay. No problem.>> ARRINGTON: I'm sorry. I'm sorry. Actually I have some things on my mind this morningand... >> SCHMIDT: Okay. Okay. Yeah, you've beena little busy. >> ARRINGTON: The person on stage, next tome, is Eric Schmidt. He's a CEO of Google. Anyone who hasn't heard him please raise yourhand. >> SCHMIDT: No. No. That's fine.>> ARRINGTON: And, okay, I have no idea what he's going to say but every time he's spoken,and I found it fascinating. >> SCHMIDT: Thank you. Thank you.>> ARRINGTON: I hope you talk about mobile and social and that one other thing that weemailed about. If that could just--those three things will be good.>> SCHMIDT: Okay. Well, congratulations again Michael.>> ARRINGTON: The stage is yours. >> SCHMIDT: Thank you. What I--and thank youguys for having me. I know this is a very important conference. What I wanted to talkabout a little bit was what are things going to happen next. It seems to me that we'reat yet another one of those [INDISTINCT] points in technology where something interestingis about to happen. And if you think about it, the--this audience, what you're all doingand so forth, represents another transition in the way people will use information anduse computers to make amazing things happen. One of the--I'm trying to think about howto express this and I think one term I would suggest for you is--what we're really doingis building an augmented version of humanity. That fundamentally what we're doing is we'rebasically getting computers to help us do the things that we're not very good at andhumans are already helping computers do the things they're not very good at. So, in theory,the combination of the two could produce some really new experiences. So, if you think aboutit, the longer term goal is actually a little different from what we'd normally talk about.It's really about having people be happier. That in fact, that the use of computers, theuse of the information, the use of all the things that we're all building can make usall have better, more productive, more fun, more entertaining lives. And that to me isthe opportunity that is really before us. There are lots and lots and lost of data pointto suggest this. Forty percent of internet users around the world spend 13 hours or morearound online. It's interesting that the 2009 word of the year in--according to the NewOxford Dictionary was "unfriend", right? That we're all now using this technology in thisvery fundamental way. And what's happening is that there are these three trends thatare accelerating and that the sum of them is driving this enormous phenomena that wesee here today and that we've seen around the world. Everyone of you has a smartphone,sort of--it turns that it's the defining and iconic device of our time. What's interestingabout smartphones is that in--within two years, smartphones will surpass PC sales. We're alreadyseeing a very, very strong and accelerating growth there and mobile is a larger marketin a lot of way. I like to think of it as your strategy should be mobile first. Indeed,most of the companies that are previewing here, the 25 or so over the next two days,are fundamentally mobile centric in some very fundamental way. And in fact mobile web adoptionwhich is, when we were measuring this, is occurring eight times faster than the equivalentpoint with the personal computer 15 years ago. And so, it gives you a sense of the scale[INDISTINCT]. Why--it's why everybody's so tired, why everybody's so frazzled. It's becauseit's such a larger market. And we--we're in a situation where we have pervasive connectivity.It's no longer the case that your music player can avoid being connected to a WiFi network.A music player by itself, which has stored music on it, is not nearly as interestingas a music player that has stored music and has the ability to interact with the musicthat's available to it real time and around it. And we take this for granted but it'sworth saying that in the next year, in the United States and in some other countries,the rollout of LTE as it's called will occur across many cities from a number of vendors.And LTE, which stands for long term evolution, is a 50 megabits spec and indeed it's beentested of that and the expected average performance was between eight to ten megabits. Wow. Andwhat are you going to do with eight to ten megabits? Well, I'm sure, not only will wesoak it up but we'll come up with other ideas because that's what drives the innovationcycle. And I remember--I remember thinking if I could just get to one megabit, that itwould all be so different. In the case of other countries, South Korea for example,has just set a goal of having one gigabit per second to each and every inhabitant bythe year 2015. Finland established a national law that said that it was a right of everyFin to have 100 megabits by the year 2013. So, other countries are even farther aheadof us in this. This has a lot of, again, implications because it means that you're always connectedand you're always online. One of the estimates is that there are 35 billion devices and soforth. And they're, by the way, they're in cars and sensors and medical devices and soforth and so on; in everywhere you could possibly imagine. So, the combination of pervasive--pervasiveconnectivity and these mobile devices is backed up cloud computing. Many of you are workingon cloud computing; we've worked on it as an industry for a very long time. What doesit really mean to have cloud computing? I'll give you a simple example. We can now demonstrateand are in the process of getting ready to ship products which allow you to speak inEnglish and have it come out on the other end of the phone in another language, forexample German. Now how does that actually work? Does you phone do all that work? And,you know, your phone is so--so incredibly powerful that it knows how to go from oneto a hundred other languages? Of course not. All the phone is doing is it's taking yourvoice, digitizing it, and sending it through the network to a server. That server is doinga speech to text translation, which is relatively well done these days. We can then staticallytranslate the text to text from one language to another, and then we go through a voicesynthesizer, this again on the server, and come back and give it to the other phone,speaking the other language. Now, to me, this is the stuff of science fiction. You know,"Oh, my God," that we can actually do this. And the fact that this can be done in a halfa second, a quarter a second, which we think is too long by the way, by thousand of computersin a server room far, far away, is immaterial to the person who is just trying to communicatewith the person who doesn't speak their own language. So, to me cloud computing can beunderstood as the magic behind what the phones can actually do. The cloud computing in phoneshere means tablets and so forth and so on. And for me cloud computing will fundamentallybe expressed not in the way that we use to talk about it, which has to do with web servicesand so forth, but rather in these new services that make your life just work and work inreally interesting way. There are lots and lots of other examples of what cloud computingcan do but one way to think about it is you've got a mobile device and you've got a supercomputerand the two are connected by this pervasive network and that's what all of us are building.Now this concept, this concept of making humans better is not a new concept. It's one that'sbeen around for a long time. In 1990 in--at COMDEX, Bill Gates talked about informationat your fingertips, all the information that someone might be interested in, includinginformation they can't even get today. Now, what happened? Why did it take 20 years toget there? Well, we had to build all the infrastructure. We had to actually build the servers, buildthe cloud computing, build the standards, do all of the issues around collaborate filtering,all of the underlying AI research. That it was necessary to do this, so 20 years laterthat vision is very much a reality. And if you think about it, it's not just the hearingand the speaking that I was talking about, there's also understanding. And we can nowget, with modern AI techniques, to things which look awfully a lot like real understanding.And of course, they really aren't, and computers are not the same thing as people, and so forthand so on. So, what is driving Google to try to do this? Why is this important? This vision,I think, is now well accepted and exciting and so forth and so on. One way to think aboutit is that we want to give you your time back. That in an information centric world, youhave two problems, you have this over load of information and you have too much to do.So, in one sense, giving it to you quicker, right? Speed maters. Never underestimate theimportance of speed and fast really does pay back in terms of your life. It also meansthat you can use the services faster. You can learn more things and so forth and soon. But there's another, and rather current obstacle point, that although we talk aboutthe speed of computers and Moore's Law and so forth in these networks, there's anotherexplosion which is the explosion of information. And that this explosion of information isso profoundly large. It's so much larger than anybody every expected that you need somehelp navigating it and ultimately, search engines and the other knowledge engines thateverybody is building will morph over time into things which help you figure out whatyou should be consuming, what information you should care about right now. So, in ourcase with search, we do more than 2 billion searches a day. Think about the scale of that.And of course, we care about the time for this. We did--it's interesting, there's aquote from Linus Pauling "Satisfaction of one's curiosity is one of the greatest sourcesof happiness in life." And indeed, much of Google seems to be about that. And we makelots and lots of improvements of this. The most recent one was Google Instant which peopleknow about and you said--you go, "Why is it--Google Instant so important? Why do we spend so muchmoney and time on it?" Because it shaves a couple seconds off of the whole query cycleand a couple seconds off that many different people really makes a huge difference in termsof people productivity. We have one of the largest data bases of information in the worldwhich we've engineered and which is very, very difficult technologically in order tohouse all that information and ready for more. So, where do we go next with search? Well,you've got personal contacts, personal emails, personal network of people and your relationshipswith them, and with your permission--and I need to say that about 500 times--with yourpermission, we can actually search and index that information and make all of these answersso much better. The next step after that is obviously autonomous search. This is searchesthat you're--that are occurring while you're not even doing searching. For me, you know,I like history. Here I am in San Francisco, as I walk down the streets I want my mobiledevice in this case to tell me what happened, where it's going, so forth and so on. Tellme things that I don't know, tell me things that I'm--that I would be interested. Thinkof it as a serendipity engine. That--think of it as a new way of thinking about traditionaltext search where you don't even have to type. We're also trying to understand what you meanwhen you search. You know, when you say "What's the weather like?" What you really are askingis, "Well, should I wear a raincoat or should I water the plants?" And we can with improvementsin algorithms, more information with your permission and so forth, we can get closerto be able to answering the question that you really ask. And we're also thinking aboutother forms of specialized searches and so forth, as everybody knows. What's interestingabout mobile is that the mobile opportunity is so large, it's breath taking. Our mobilesearch traffic grew 50 percent in the first half of 2010. Our mobile business doubledover the last year. Android, I think everybody here knows how successful that is. The numbersare staggering, more than 200,000 phones per day, devices I guess technically but mostlyphones, now powering more than 60 devices from 21 OEM partners across 59 carriers and49 countries, with deals happening everyday. So, the momentum is only accelerating. It'sinteresting that the search traffic from Android phones more than tripled in the first halfof 2010. Chrome, our browser, is a good example of what it's going to take to build the kindof architecture and platforms that I'm talking about. If you want to build an open web whichGoogle is committed to, and I should say right up front that Google's core strategy is openness.Other companies, notably Apple, have a core strategy of closiveness. Ours is fundamentallyan open one, an open web, an open internet. It's sort of how we actually--how we actuallydrive everything. You're going to need a powerful browser, Chrome now has more than 70 millionusers and it's getting a lot faster. Remember that speed thing? Latest release is four timesfaster than the first release two years ago. And so if you think about a powerful browserthat's more of a platform which is what chrome is; secure, scalable, fast and with a lotof speed, Chrome allows you to run applications within the browser that you could do autonomously.So, autonomous action within the browser that enables this whole new platform that I'm talkingabout. And, of course there's lots to do about monetizing content. As everybody here knows,it's just as important to have the money side of the business and the monetization side,in particular, as well as the technological side. We have a lot of good news to reportthere. Twenty-four hours of video uploaded every minute into YouTube, just think aboutit. More than two billion views per day of YouTube. Again, think of all the time beingwasted, I suspect. A hundred and sixty million mobile views per day, more than doubled thanthe last year. The numbers here at scale are really something. And the business is doingwell, more than two billion monetized views per week in YouTube and the number of advertisersand the number of monetized views up more than 50% in the last year. Similarly, thedisplay business; many of you partner using Display Revenue and so forth is also takingoff. We have more than 300 million view--visitors a day in our display network. Three quarterof the--sort of a three quarter of the world's Internet users come through it in one wayor the other. And the double-click platforms serve more than 45 billion ads per day. So,the sum of those, not only give you a platform opportunity around Chrome and Android andthose technologies as well as this notion of core information search, but they alsogive you a way to monetize. So, again, returning, let's say right up front that it's a big betunopened. So, let me turn and comment on a couple of things and then take your questions.It seems to me, first and foremost that the Internet is one of the most disruptive technologiesin history. The Schumpeter quote, of course, people have heard perhaps, "Capitalism inevitablyleads to a perennial gale of creative destruction." You are the creative destruction, right? Thisis it. This is ground zero right here, if you will. And what's happened is that theInternet has replaced the economics of scarcity with the economics of ubiquity. And the businessesthat rely on controlling content and limiting content are at risk to businesses that understandthat content should be broadly available at all forms and monetized in new ways--new formsof distribution, et cetera. And these businesses are both exciting and terrifying. They'reexciting because of the scale. You can reach a billion people literally overnight in anew way. They're terrifying because it has all to do with information. And informationis stuff that people care a lot about. And so, all of a sudden, when you're in that business,you find yourself--you're confronted with all sorts of criticism, regulation, investigationand so forth and so on. And from my perspective, and I think from our perspective at Google,these debates are healthy, because many of the questions are really unresolved, the debatesover privacy, the debates over encryption. These are fundamental questions that societyhas to face because of the disruptive nature of the Internet and the new kind of powerthat it gives to end users. We fundamentally are giving people an enormous amount of technologicalpower in their hands in this [INDISTINCT]. And that shape--shapes and changes the powerrelationship between citizens and governments, citizens and private companies, citizens andeach other, and the law, and so forth and so on. So if you put all of this togetherand you think about what does this really means, you can think of this as another GoldenEra. And in this case, I think it's a Golden Era of breakthroughs; breakthroughs like we'veseen in the last couple of years based on this platform. One way to think about this,is think about how can computer science, and science in general, help with these breakthroughs?Global warming, terrorism, financial transparency, these are all fundamentally information problems.So all of us, in one way or another, can help there. So imagine a future--imagine a futureinvolving all of us, it looks roughly like this. And by the way, this is the near future.It's a future where you don't forget anything because the computer sort of knows thingsand remembers things. And computers will clearly be good at doing the things that we're nogood at, making list or memory things, keeping memories of what we do. They're not very goodwith things like judgment. And although there are predictions in that area, I think it'sunlikely that they're going to do a very good job for a pretty long time. But one thingthey're very, very good at is dealing with billions of things and scanning them and datamining them and all those kinds of things. And people will develop new ways of doingthat. In this new future, you're never lost, all right? You don't get lost anymore. Itused to be fun to get lost. Now you look at your Google Maps or whatever--however younavigate, and you have exact images of where you are. And what's interesting is that wecan, and with new technology, we will know your position down to the foot or even tothe inch, over time. So all of a sudden, there's a lot of implications for how explorationoccurs and our sense of how small the world has really become. Your car should drive itself.It's amazing to me that we let humans drive cars. Computers should drive cars. It's obvious,right? If you think about it, it's a sort of an--it's a bug that cars were inventedbefore computers, right, in that sense. And all of a sudden, it will be much, much saferwhen we let the computers do the things that they're good at, and then humans can talkor eat or whatever they want to do in the car. You get the idea. What's interestingabout the Earth is people who love the Earth can love it more. You can learn much moreabout our planet because you can visualize it and you can see it. There are very, verylarge numbers of people who are now using Google Earth and other mapping platforms tostudy the impact of the--of the only world that we've all ever really known. You canreally have all the world's information at your fingertips, so--in any language withuniversal translation. We're basically at the point where we can do a hundred by a hundredmatrix of translation. That has a lot of implications again for global understanding, both the goodand the bad. And the fact that we can now do it dynamically and in real time is a hugebreakthrough for understanding how people and the world will evolve. You also can knownow what to pay attention to right now, right? Amidst the explosion of real time information,with your permission again, we can help you understand what you should focus on next,because we have the tools, we have the understanding, we known--we know what you care about, andwe know what's going on. And we can even suggest the things that you might be interested basedon various algorithms involving serendipity and so forth and so on. You're never lonely.You're fundamentally never lonely because it's always--your friends are always online.And if you're awake, you're probably online. And if your children are awake, they're certainlyonline. That's a huge shift, even in the last 10 years. There's always somebody to speakwith, text to, talk to and so forth. You're never bored. You're really never bored. Insteadof wasting time watching television, you can waste time watching the Internet, right? Wheneveryou're sitting there and you're bored, there are so many choices now. This is another change.It's a change that's occurred in, like, the last 10 or 15 years, and one which is notgoing to come back. Games, movies, videos, and we can suggest again what you watch orwhat you not. You're never out of ideas. We can suggest where you go next, what to do,who to read, who to meet. Imagine a world's calendar of events and things that you wouldlike. Now, this is a future. What is particularly interesting about this future is that thisis a future for the average person, not just the elite. Historically, information marketsfocused on the elites. It was the elites who had access to information, they ran around,they we're all very pompous in the way that elites are. But what's neatest about thisall is that because of technology and because of the information access, this is a futurefor a billion people now, two billion and a few, and certainly in our lifetimes, fiveor five--five out of the six billion or six out of the seven billion of people that willbe alive today. So not only are you playing for a space that's important, you're playingfor something which really touches almost everyone. So this, in my view, and this is,I think, a shared goal with all of us, is a future that's committed to doing good. It'sa future that gives people time to do more of the things that they matter, thoughts,ideas, intuition, solutions, things that they want to do. It's a future that's sort of stuffof poetry, if you will. There's a quote which I'll finish with from William Gibson in theNew York Times two weeks ago, "Google is made of us; a sort of corral reef of human mindsand their products." I think this opportunity is right before us. I want to thank TechCrunch,Michael and the whole team, for letting me come by and talk about this. And thank youvery much, and I look forward to your questions. Okay.>> Thank you. So, there are mics... >> SCHMIDT: [INDISTINCT]>> Thank you very much. There are mics in back and there are people with mics goingaround, so I encourage you to either line up or raise your hand. And let me start offwith one question. I mean... >> SCHMIDT: Sure.>> ...some people are claiming that Silicon Valley doesn't solve hard problems. Yet everythingjust described seems to counter that. But it raises a bigger question about the roleof Search in the way that we discover information. Up 'till now, it seems like the Search Enginehas been the central place you start, and then you go and you find information. Yetincreasingly, we're starting to see new technologies, many of them social, where the informationgets pushed to you or filtered to you, and you're not really searching for it.>> SCHMIDT: Okay. >> You set up your filters, whether that'syour friends or whatever it may be, and it comes to you. So what role does Search playin that world? >> SCHMIDT: Oh, that--the model that you'redescribing is exactly what happens with technologies in Silicon Valley. It started off as a real--verysimple idea, Tech Search, and then they become pervasive and they become ubiquitous. It'sstill Search, but it's Search done in a different way. And I think that's wonderful. The factof the matter is that in order to do the kind of searches that you're describing, you stillneed a very large database of information, you still need the underlying search engine,but it's initiated from a different point. It's initiated from a friend's list or someautonomous thing or a location. We have a product, Google Goggles which will--you takea picture of something and it actually does 16 different searches and it [INDISTINCT]as to what it is. Is it an animal? [INDISTINCT] mineral? Is it a landmark? Is it a menu? Anddoes it work with OCR? So, to me, what you're--the story you're referring is a time-honored storyof the Valley. And I would argue that the Valley did a lot of very disruptive things.If you take a look at Silicon Valley, in general, and information technology and in green energy,it's a bit--two of the most important things affecting our planet today. In information,what I have learned in my career, is in information that so many people care an enormous amountabout. And so, to think that what we're doing here will not be controversial is to be naīve.Of course, when you're dealing with information in the forms that you describe, or I describe,you will have critics, there will be interesting issues and there'll be lots and lots of challengesfor all of us. >> Okay. I think we have some questions atthe back. Can you start right there? Say your name and make your questions briefly.>> CASS: Hi, my name is Abee Cass. And I was wondering how you plan on making Search moreserendipitous. Don't you need, like, additional information about an individual's taste graft,to borrow a term from Chris Dixon? >> How you make Search more serendipitous.>> SCHMIDT: So today, a simple explanation for how our Search ranking work is we usea set of hundreds of signals. The signals are scored and ranked. So, the answer thatyou get in traditional text search is a reflection of that scoring. The more information thatwe have about you, the better the search results. So if, for example, you are logged in andwe know your search history, we can give you a more targeted answer. It'll be a slightlybetter result. So we preserve anonymous search, [INDISTINCT] we think that's important forend users, but we prefer that we know more about you. We know, at least, your IP address,and then--that kind of information. We can do serendipity with the kinds of information--atypical example would be if we know who your friends are or information about your otherpatterns, we can sort of suggest that other people like you found this interesting. Thetechnology is generally known as collaborative filtering, and it technically works prettywell. That's a simple preview of much more complex things that we can also do. All right.>> Next question right there. >> ATACHA: Hi. Jack Atacha from The Next Web.First of all, that was a great speech. >> SCHMIDT: Oh, thank you.>> ATACHA: You're welcome. So my question is, Google does a lot of things, but as CEO,moving forward, if you can only do one thing, focus on one thing, what would it be?>> SCHMIDT: Well, the answer at Google continues to be Search. And the most important thingis the transformation of traditional text search, which is syntactic in nature, to thesemantic version of search that we were discussing earlier, where we understand the context andthe meaning of what you're looking for. So the sum of that is really the semantic aspects,the probabilistic aspects, the deeper index, and the personal information along with informationsuch as your friends list. >> Okay. Next question?>> ZO: Kevin Zo from Xerox. Google do lots of things. I know you focused on search. Iknow you also help in the country, like the clean energy and healthcare all those reallytough, you know, issues. Can you share me a bit about, you know, what are you doingon the healthcare side? >> Healthcare? What do we do in health care?>> SCHMIDT: We've done some analysis of how Google is used and the internal analyses indicatethat somewhere between 3% and 5% of the queries that we get are health related. So we went,"Oh, my God, people might actually be using this for real health--for diagnosing realproblems." And so, we hired a set of doctors and a set of people who understand the medicalarea much better than we did to help us categorize and score our results. That's probably themost important thing that we've done. We are also building an infrastructure for healthquestions that--where you log in and you give us health information. That area is complicatedbecause it's governed by both HIPAA, the healthcare regulations as well as the need to integratewith the health IT systems, which are just torturous. You cannot imagine how painfulit is to deal with 20 years' worth of pre-XML based databases and try to get all these databaserecords together. So that's been relatively slow growing--going, but eventually, we thinkwe'll produce even better health information for people and obviously, with their permissionunder appropriate HIPAA guidance and appropriate security.>> Next question. Right there. >> Thank you.>> NADAL: Hi my name, Francois. I'm the CEO of myERP.com. I would like to know what wouldtrigger 500 million small businesses to totally move into the Cloud with Google?>> SCHMIDT: Well, that's a very kind question because we have a product to offer you.>> NADAL: Thank you. >> SCHMIDT: The way to set the question upis to say 20 years ago when you were setting up a small business, you had to go and buya personal computer or a small server--I was in that business of selling them at that time--andyou had to have IT professional and you had to run it in-house. The right thing for asmall business to do now is to not have any computers except the things which are on people'sdesktops and on their smartphones, anything like that, and do everything in the Cloud.So the components would be an e-mail system, a calendar system, a sales force automationsystem, various--and then the stuff that's vertical for whatever their business is. Googleis one of the companies that offers products that--we decided to price it low, $50 a yearper user. We have infinite demand for that at that price, so we know that's a good price.And what we're doing is we're signing them up, literally, millions of small businessesat a time. What will it take to get 500 million I think is additional features, additionallanguage support, additional integration with existing database systems that people have,because people do have existing systems; they're not pure plays. And my guess is that an obviousthing to do would be to have a Cloud-based workflow system that works pretty generically.So if I could ask for one thing, I think that calendar, Gmail, the word processing, thatstuff is pretty well under control. Turns out all the vendors, including Google, arenow offering things there. The next thing to do is do Cloud-based workflow to actuallyintegrate the business processes of the business and I think you're done. That's all you got.That's all you need. >> When did mobile search become materialfor Google? I know it's growing very fast, but what percentage of total searches aremobile today? When does it become a material? >> SCHMIDT: Since you asked the material--youused the word material, I have to give you the financially correct answer which is notnow and not soon, simply because the number--the revenue for mobile is so dwarfed by the othersources of revenue. And we wouldn't give a prediction of how. It is growing much fasterthan web stuff. It's still not quite at the same level of monetization for various reasonswhich we're working on. So I think the best answer I can give you is eventually we thinkmobile will be the majority of the searches and majority of the revenue, but it's a longtime. >> But is it less than 1% now? Less than 5%?>> SCHMIDT: Again, I can't give you a specific number.>> What about Google Me? When is that going to launch?>> SCHMIDT: Google Me is a rumored product which I won't comment on.>> Go ahead. >> COLDEWEY: Hi there, this is Devin Coldeweyfrom TechCrunch. And I think that most people have a pretty good idea of what Google istalking about when they say "Don't be evil." But I think that when you say that you wantto be open, that's just as subtle of a concept and something that's just as difficult topin down. So I was wondering if you could help us understand what Google really meanswhen you say that you want to be open? >> SCHMIDT: Well, it's easier to understandif by opposition, so the easiest--the easiest comparison to do today with a broad audienceis to talk about Apple--the Apple model and the Web model. The Apple model, which worksextremely well, speaking as a proud former board member, you have to use their developmenttools, their platform, their hardware, their software. If you submit an application, theyhave to approve it. They have to use their monetization and their distribution. Thatwould not be open, right? So the inverse would be open. It's just that simple.>> COLDEWEY: so, not Apple then? >> SCHMIDT: That would be in it.>> COLDEWEY: Fair enough. >> SCHMIDT: Yeah. So in our case, for example,we had fun--Flash was allegedly a problem, so we love Flash, we want Flash, we demonstratedFlash doing extremely well on Android. That's an example of openness. Let the user decide.The user can decide whether HTML5 or Flash will ultimately dominate our own opinion,just probably both will do pretty well for a while. Let the user decide that, that'swhat openness is. >> Yet you have some carriers that when youhave an Android phone, they put some apps on the phone that are hard to remove.>> SCHMIDT: Well, the good news about the carriers is that they can add, but they don'tdelete. So, again, openness is having choices. And if you don't like those apps, you couldbuy a vendor that does not have those apps on it.>> Okay. >> SCHMIDT: And with the level of competitionon Android, we suspect that if you feel--that you and the majority of people here feel verystrongly about those apps that you don't like, those vendors will get a very clear messagethat those apps need to be deleted. That's how markets work.>> All right. >> Next question we have about time for oneor two more. >> METZ: Cade Metz with the Register. There--anytrust investigations of Google underway in Texas and in the EU, and part of the complaintis that Google's universal search allows the company to kind of push their own servicessuch as Google Product Search, such as Google Maps, at the expense of competitors. Do yousee it that way? And does universal search use different algorithms, separate algorithmsfrom primary search? >> SCHMIDT: We don't see it that way. And,indeed, it appears to us that those investigations, that's your term not mine, are simulated bycompetitors who have a very, very clear invested interest in the outcome. Our answer on universalsearch, which we spend a lot of time on, is that we have chosen the vendor of informationthat produces the best end user outcome. And sometimes that's a Google source, sometimesit's not a Google source. And it's not okay to say you shouldn't use any Google sourcesand it's also not okay to say that you should only use Google sources. We, in fact, usea mixture and we believe and we think that if there are, in fact, investigations, theirinvestigations will show that that's, in fact, how we operate.>> METZ: Thank you. >> How has Google Instant affected your queryvolume? And how do you measure query volume now?>> SCHMIDT: That's a very good technical question. The simplest answer is it's--at the end ofthe day it's pretty much neutral to positive. There's a lot of dynamics to change, you know,people--it's all--remember it's faster. So, you actually, on a margin, you're done fasterbut you also get more queries. But at the end of the day it's neutral to positive. [INDISTINCT]>> But the--so, when I type in a search and I get literally five or 10 different results,that doesn't count as five or 10 different queries? Because I--because I keep typingor it counts it as the one final query? >> SCHMIDT: Again, in the measurements systemthat we use, right, it works out that we get the same behavioral [INDISTINCT]--same eventualpages that people go to, and so forth and so on. It does happen more quickly which isgood. So, neutral to positive. >> Right. Question right there.>> WRIGHT: Hi. Maurice Wright, Pay4Tweet. Pay number four Tweet. Google has a prettydominant position as an advertiser. I'm wondering what's your opinion on Twitter as an advertisingplatform and does Google plan on buying them at some point?>> SCHMIDT: Well, I can't answer the latter. I just can't talk about any of--any activity.Twitter strikes me as being a very, very important platform in general, simply because of thescale that they operate. If you look at the reach they have. And so Twitter should andagain these are people we know well and we have a partnership with them on some--on showingsome search results, Twitter should be able to come up with advertising and monetizationproducts, at least in our opinion, that are highly lucrative. So, we think that they'regoing to do very, very well. >> So, let me take a question from Twitterwhich is, are you worried about talent leaving Google and creating innovation outside ofGoogle? That maybe Google should have captured--Foursquare is the primary example, but there's endlessexamples of Google alums starting companies, and someone launching on, you know, on stage.As you get to the size that you are, you know, you can't, obviously, you can't capture allthe innovation. But how do you handle that? >> SCHMIDT: I would say it's one of many worries.That when you have a large company, you know, the executive [INDISTINCT] development, dealingwith a larger organization, decision making, and so forth and so on. It's not a huge crisisif put that way. But it's an important sort of criticism of the company. From our perspective,we do--we do what we can. Foursquare is a good example where these are two people whoare very, very clever, who were at Google too early, if you will. And when the opportunityto do Foursquare, which is hugely successful, came along, it was just better for them todo it outside. They'd already left Google. And we wish them the best of luck. Obviously,we would prefer those things to occur within Google but the fact of the matter is thatthere--that part of the robustness of the market is that there have to be multiple successfulcompanies, IPOs, wealth creation opportunities, it's how the system works.>> How often do you take that 20% project that was too early and revive it when it'stime for it? >> SCHMIDT: It's done bottoms up not topsdown. So, there's no way to estimate that, but usually everyone of our engineers is encouragedto do a 20% project and they believe in them. So, they come out. Or if they leave the company,they do it as a start up. So, we understand that if their passion is there we need toface--do we want to do this? do we care about it?--is important.>> One final question, right there. >> PARIKH: Yes, I'm Chintu Parikh, CEO andco-founder of SACHManya. Makers of award winning Yapper, your app maker [INDISTINCT].>> Yeah. Your question please. >> PARIKH: So, we would like to tightly integratewith Android on marketplace API. And are you going to open that up any time soon?>> SCHMIDT: So, the Android marketplace API? >> PARIKH: Yes. So, we can even make, youknow, the app development much faster. Right now, it takes half an hour. It can go livein half an hour with Android marketplace. >> SCHMIDT: And so you want it to be lessthan a half an hour? >> PARIKH: Less than--right now we have tosubmit the binary to the Android market place. >> SCHMIDT: I see.>> PARIKH: And then, you know, that's a manual process. Instead of that, we would like toautomate the whole thing. >> SCHMIDT: That sounds like a great proposal.Let me work on it. I'm sure the answer will be yes.>> Do you think that the--one hot topic obviously right now is, these places databases thatyou're creating and everyone's creating,2 and there seems to be a lot of replicationthat a lot of different businesses from AOL to Google to Startups are basically creatingtheir own places database. Do you think that--would you support an open places database?>> SCHMIDT: Well, first when I said that we would argue that you can use our databasesas open APIs already. >> Okay.>> SCHMIDT: I thought the question you were going to ask had to do with the copyrightquestions. So, the problem with the places databases is it they're very, very seriousissues of copyright and ownership of that information, and we're working through allof those. But usually what happens is these databases, there end up being a couple andusually the one that's most successful is open. So, the simple rule and the Google ruleis we're going do open things, make these things exposed, make them accessible.>> Terrific. Well, please give... >> SCHMIDT: Thank you all.>> ...Eric a warm round of applause. >> SCHMIDT: Take care.>> Thank you very much. >> SCHMIDT: Thank you.