LIVE from Google's Annual Meeting
Posted by: Rob Hof on May 07, 2009
Wireless gods willing (and they’re a little recalcitrant right now), I’m going to blog the highlights of Google’s annual meeting at the Googleplex, starting at 2 p.m. Pacific, as well as a press briefing beforehand. At the briefing will be CEO Eric Schmidt; David Drummond, chief legal officer and senior VP of corporate development; Susan Wojcicki, VP of product management; and Marissa Mayer, VP of search products and user experience. So stay tuned…
Annual meeting liveblog is after the jump.
The press questions begin:
Q: How viewing potential competition issues with Schmidt on Apple board?
Schmidt: I don’t think Google sees Apple as a primary competitor (with a smile). If there are issues that are competitive, I will recuse myself. So far, done so only on iPhone discussions.
Q: Will you consider resigning from Apple’s board? (To see what you would say, answers the questioner, Maggie Shiels of the BBC.) It hasn’t crossed my mind.
Kent Walker, corporate counsel, says the law clearly gives a safe harbor to companies with little overlapping revenues.
Q: Any signs of a bottom in business?
Schmidt: Won’t say except haven’t seen a change.
Q: On the federal probes lately, and the impact on partnerships:
Schmidt: We should expect governments around the world to pay attention to what we do and hold us to the principles we have articulated.
We are more careful about when and how we do things that could raise concerns with any party, but that care doesn’t stop us from doing those things.
Q: Question on Google Book Search agreement that feds are looking into. Didn’t hear anything new from Google on this.
Q: Prospects for long-term monetization of social networks?
Wojcicki: We’ve been learning a lot about how to monetize this inventory. We believe there are ways to monetize it over time. But the nature of it is different from search. Has to be more compatible with the social network.
Q: Why did you sell your stake in AOL?
Schmidt: We love AOL. We also like money. We sent our best guy over there to run it! (Laughs; he’s referring to former Google sales exec Tim Armstrong’s recent move to be CEO at the Time Warner unit.)
Q: Plans for Google News? Not much new here.
Q: YouTube’s losing a lot of money.
Schmidt: YouTube will eventually be a successful and profitable business. Not sure when. Wojcicki: Serving ads on hundreds of millions of videos. New formats that are promising are pre-roll and in-stream ads. We’re just at the beginning of doing new ad formats. Introduced a sponsored video on the right-hand side if you do a search. Video owner can do this promotion. Also click-to-buy ads.
Q: About Google’s cost-cutting
Schmidt: We were very careful with the cutbacks. Took out a lot of future costs with them. We don’t want to be wasting money at a time when the global recession is going on.
Q: Expect any particular bright spots AFTER the recession?
Schmidt: It’s early to speculate on post-recession. Pretty much same opportunity as before—Internet use not slowing down much.
Q: Any details on the decline in cost-per-click on search ads in the first quarter?
Schmidt: Nothing beyond the first-quarter report. “The system reacted to economic changes we all saw correctly,” that is, the drop was a reaction to people buying less or lower-priced products, so it made sense ad prices fell. This proves Google’s auction process is competitive, Schmidt adds.
Q: Status of China business, in terms of human rights issues and censorship as well:
Drummond: It’s an ongoing challenge to operate there. We think that on balance, we’re doing good in China. It’s a difficult road.
Schmidt: We’ll be in China (not leaving as some companies like eBay have).
A few other questions I’ll fill in when I get better connectivity…
Q: What do you think of people saying Google is the new Microsoft?
Schmidt: They obviously don’t remember the old Microsoft. To me, there’s no comparison.
Q: Any change in acquisition strategy (Schmidt said recently prices were still too high on many potential acquisitions)?
Eric: No change. We’re waiting for the right opportunities at the right price.
And the meeting comes to order... the usual intros of the board and boilerplate stuff... A couple of shareholder proposals on stopping Internet censorship and on universal health care, proposals which Google opposed, get their airing. An apparent China activist interrupts the meeting by trying to ask further questions on that proposal but is more or less shouted down. Later he walks out of the meeting.
Now Eric Schmidt talks about Google's business:
It's very easy to get conservative as a large company. Now is the time to be even more innovative. Recessions can be a very good time for innovation.
Internet revolution happening around the world.
Search is still the killer app. We still don't know quite how to give you every answer you want. ... Doing it right and doing the world's perfect search engine remains very very difficult.
We want to do the same thing with advertising. This is a local business. Launching new front end for AdWords, its ad system.
Display advertising has the same property but it's earlier in the cycle. We really want to bring the science of search to the art of display. YouTube doing similar things with respect to advertising choices. The two together ultimately will provide a significant new business for Google.
Mobile searches have risen five times (didn't catch since when). Mentions Google Latitude, the location service for mobile devices. So as you walk around, can get history of buildings, etc. (He doesn't mention ads, for some reason.)
Applications: Looking to bring same capabilities to home and work with Google Apps.
The economic situation is still tough. But we're going to run Google for the long term. We know that the model that we follow... will give us a very good shot at being innovators in a new and exciting future.
Now the same folks as in the press call come up for Q&A. But where are Sergey Brin and Larry Page, the cofounders and presidents?
Q from one self-described small shareholder wants to talk about the first shareholder proposal criticizes public-pension-fund proposals unlikely to pass.
Q: Thanks them for being Google. Three suggestions on proxies, shareholder proposals, and a Google sports site. Mayer says there are a lot of Google "Gadgets" on its iGoogle personalized home page. Also adding scores to search results.
Q: Speaker has a concern about online publishers and how one of his sites went from $2,000 a day in December (peak season for this site), then dropped to $100, then back up again. Can't tell what happened and no mechanism to find out. Also cites restrictions on multiple Google ad accounts. Google is in danger of leaving substantial money on the table and appearing arrogant.
Wojcicki: Admits there's an issue of support for smaller advertisers. Could consider fee service for support in the future. Algorithms change often, so that can change monetization.
Q: Is customer base loyal? He cites Yahoo and Microsoft combined having 30% market share, so one in three people are going to rivals. Why aren't we totally blowing away the competition today? (He's not kidding. He must be the only person in the world who thinks Google isn't dominant enough.)
Mayer: She notes how Google makes hundreds of improvements a day.
Q: Could Google's energy initiative remake the utility business, and will that benefit Google and its shareholders?
Schmidt: I hope that we have the kind of impact that your question presupposes. I doubt we're going to become an energy business. We see ourselves as the nexus of information about energy. Ultimately that could result in some significant revenue in the information part of this energy challenge that we face.
Q: Suggestions from another shareholder: Health-related search results have a lot of repetition and not organized to make things easy to find. Also, translation from other languages isn't very good. Mayer on search: Looking for better ways to surface health info.
Q: On Schmidt's and board member Arthur Levinson's membership on Apple's board and the FTC looking into whether that raises antitrust issues: Will you resign from Apple's board? Let's make sure that we're not an illegal monopoly!
Schmidt: Disagrees with a lot of the assumptions in the question. Same answer as before.
Q: Assessment of employee morale and productivity?
Schmidt: There's a lot of perks still, let me tell you. But didn't want to waste money. Cutbacks welcomed by employees. My sense of it is that morale is pretty good, with the caveat that people are upset that their friends are losing jobs in some parts of the world. Wojcicki: The perks are still really good. Still 15 cafeterias on campus. The perks are so we can do our jobs better, so we can be more efficient, so we don't have to drive off campus to have lunch.
Q: Don't split the stock. No answer to that.
Q: Suggestion: Offer fundraising Websites to nonprofits. Mayer talks about an iGoogle Gadget that can help on that. Wojcicki: Admits not all the pieces have been put together.
Q: Comment: Glad AFL-CIO health care proposal failed, says it's trying to bring socialized medicine.
And that's it for the meeting. Nothing surprising, sorry to say.