Eric Schmidt, executive chairman, Google believes that the next revolution will be caused by cheap and high-power smartphones and laptops.
Schmidt spoke to CNBC-TV18 at an event in New Delhi where Indian and international experts came together to brainstorm about what the Internet has meant for India and the significant opportunities it offers.
Below is an edited transcript of the show on CNBC-TV18
Q: Over the last decade, you built Google from a start-up to one of the most admired companies of all time. What is your verdict on your last 10 years at Google?
A: I could not be happier with what Google has achieved. It is a source of pride for me personally and for people at Google in general. The power of information is so dramatic and you really do touch people’s lives when you give them the answers to the things they care about. I cannot think of a better way to spend a decade.
Q: What would you say your biggest failures have been?
A: We made money but we also had to make some trade-offs. Probably the biggest mistake that I made was not in seeing the social media revolution early on. I think we have realised it now but I would take responsibility for that mistake.
Q: Will that in the future affect search as well which is your biggest source of revenue? Will companies like Facebook and Amazon be able to map users better to offer enhanced services while you remain a passive search engine?
A: I would disagree that we are going to remain a passive search engine. We have a product called Google Plus which is doing extraordinarily well.
Q: But as compared to Facebook?
A: Facebook has been around longer than Google Plus. The Google Plus link graph which tracks the sort of people that you interact with is an important future signal on our search ranking. So I think we will be fine. I am not worried about it. I think it is just important that Google be a participant in all of the important Internet technologies.
Q: What and from where is the threat to the Gang of Four- Google, Facebook, Amazon and Apple- going to come from?
A: The Gang of Four is in reference to the presence of four network-scalable platforms in the industry that are driving huge shareholder value and impact on partners and the competition. The threats to each of them are many. In Apple’s case, the threat is from the Android.
Amazon faces the threat of increased forays into the e-commerce space. Facebook has a a competitor in Google Plus and Google faces competition from Microsoft. So it is key for each of these companies to maintain or increase the rate at which they can continue to innovate to solve problems that really matter to the end-user.
The industry that was largely driven by the Microsoft monopoly structure and PC hardware manufacturers has been completely broken down now by the emergence of tablets and smartphones offering many different choices.
Q: Who do you see as the Google of today? Where Google was when search started? Which companies do you give the best chance of coming in and knocking you off?
A: I certainly hope it is Google. A new competitor to Google is unlikely to be a direct rival to our core business, but rather likely to compete from the side such as solving a problem in a new way, a way that we missed. We worry about that because that’s typically how incumbents compete and all leading companies face that competition.
Q: In your new role as executive chairman, you have become an evangelist for freedom of the Internet. What is it about those discussions with government that concerns you the most and what is it that concerns governments the most?
A: I believe that the Internet can and will solve many of the problems in the world such as education, entertainment, bad dictators and corruption.
Q: That will typically worry leaders and politicians.
A: It depends on whether the politicians are working in a democracy or in a dictatorship. It also depends on whether the government is transparent. Governments that are transparent and based on rule of law with genuine commitment to freedom of speech see the Internet as a supergood because it enables the individuals and allows them to offer feedback.
Governments with weak control or not solving the people’s needs fear the Internet because they do not want to empower the people. If you examine the spread of the Arab Spring movement, especially in Tunisia, the revolution was largely started by bloggers. Every other aspect of the media in Tunisia was controlled, but the dictator forgot to censor the Internet.
Q: What about worries of censorship?
A: It is certainly technically possible for a government to censor the internet. And it is despicable that governments can.
Q: How do you view India in the context of Indian politicians' concerns?
A: The politicians that I have spoken to emphasised the commitment to a open and free Internet. India is a vibrant democracy with a high sense of rule of law country. In return we have to follow the law.
Q: There are 700 million mobile-phone users in India and just about 30 million smartphone Internet users. As that number goes up, do you think politicians could clamp down a bit harder?
A: It is natural for politician to want only good coverage and control human behaviour. But the Internet advocates an open and transparent government that trusts its people. Politicians that try to shutdown criticism will ultimately be booted out of office at least in a democracy.
Q: Why has India, which is a big participant in the outsourcing business, seem to have missed the Internet bus?
A: I am worried that India, which defined the last wave of computing, is well behind in the Web-services model that the rest of the world is adopting. It is crucial for India to invest and enable fast fiber-Internet connectivity within its borders and with other countries.
There are many talented Indian software programmers just waiting to tap that infrastructure. My guess is that with the great success of Indian IT, the Indian government and the leadership rested on their own laurels without an inkling about the rapid change in technology. The good news is that the leaders that I have met in my visit so far are all committed to change all this within the next year. So, very soon India will get fiber-optic and mobile networks.
Q: Was it because of policy or just lethargy?
A: I don't think anybody really knows. India's Internet connectivity has always been weak. The number of undersea cables to actually handle the bandwidth was insufficient. Many of the fiber-optic networks were proprietary as opposed to public. Indian infrastructure did not get enough attention and the regulators were probably slower to give out enough licences and the telecommunications industry did not have enough capitalisation. But all these problems are being addressed this year.
Q: You spoke about the great revolution kickstarted by smartphones and tablets. What is the future of technology? What is going to be the next big revolution?
A: The big future is still smartphones and the vast majority of Indians will encounter the Internet on a smartphone that will be low on cost and of great power. The smartphones will be used in health, medicine, education, entertainment and in building businesses.
Q: So it is the mobile-phone?
A: Absolutely. There are two reasons for that – one, mobile-technology is actually more convenient and two, it allows providers to leapfrog the stages in infrastructure that India has missed There will also be a revolution in low-cost laptops.
Q: So what is Google doing?
A: We of course have a product called Android which is very widely used. The Internet itself is free, so we are happy that it has got the right price. There are many Indian telecommunication manufacturers that are brining out very low-cost Android phones. Those low-cost Android phones will define smartphones in this country
Q: Is Google Glass the beginning of variable technology? How do you see variable technology going ahead?
A: Google Glass is an amazing achievement. It is a camera. You can talk to it and see what it projects into your eyes. Though we don’t quite know what people will use it for, we know it will unleash a whole new set of applications for human behaviour of one kind or another. The first version has come out this year to pioneers and beta testers and based on their feedback we will see how far we will go with it.
Q: What are your views on free and paid content on the Web?
A: Content is going to be both free and paid on the Web. A vast majority of content on the Web now is free because people are uploading news-generating content, which by definition is free. There are many professional organisations that are putting out free content that is anchored by advertising and so forth.
I also believe that they will be significant subscription and sponsorship revenue. Therefore, ultimately what will happen is that newspapers and magazines will get some response and make the information broadly available.