Google's Schmidt talks payments, mobile, TV and more to kick off Web 2.0 Summit

The Web 2.0 Summit in San Francisco, which is carrying a lineup of big name Silicon Valley executives over the next few days, kicked off this afternoon with an on-stage chat featuring Google CEO Eric Schmidt.

The Web 2.0 Summit in San Francisco, which is carrying a lineup of big name Silicon Valley executives over the next few days, kicked off this afternoon with an on-stage chat featuring Google CEO Eric Schmidt.

Out of the gate, Schmidt showed off an "unannounced device that I carry around," a T-Mobile-powered phone that is using a near-field-communications chip that could revolutionize mobile payments and payment processing and, according to Schmidt, could eventually replace the credit card. The technology, in theory, creates a secure process that allows transactions to be processed similar to something like the Bump app.

Google, he said, has no desire to get into the same business as an Amazon or iTunes, which collects credit card numbers for transactions. Instead, he sees Google as being the technology provider, with a service like Google Checkout being only a part of it.

Beyond that, Schmidt replied to a question about the competition between Android and the competition - notably, Apple. He praised Apple for doing a lot of things right, such as design and apps. In hindsight, he would have put more emphasis on apps. However, apps stem from volume and Android had to do volume first.

He also chimed in on the state of the tech industry, specifically in response to a question about the pay raises and bonuses that Google employees received lately.

"High tech is in a bubble," he said, compared to other industries where the recession's impact is still very strong. He acknowledged that there is a "war for talent" but said that the raises were part of the investment in the core parts of the business. The raises were just "one component," he said, and noted that if Google would have wanted to fend off competitors looking to tap its employees, it would have targeted specific groups of employees with financial incentives. Instead, every Google employee around the globe was included.

Oh, and by the way, it was "a very nice day" at Google when the raises were announced.

Schmidt also chimed in on the controversial idea of computers driving cars. To clarify, he said he's not suggesting that the driver not be in the driver's seat but "it's obvious to me that if a car had buggy software and you were drunk, it would still be better for the buggy software to drive."

Hmmm. As scary as the idea of computers driving cars might be, I have to nod with Schmidt on this one. Sure, let's take drunks off the roads - but clearly, that's no easy task.

He talked about the definitions of Net Neutrality, which "explicitly allows for discrimination of one type of (format) over another," such as video and audio but doesn't allow for companies to discriminate between the same types of formats by competitors. He also defended the position that Google and Verizon, in their joint statement about Net Neutrality, treat wired and wireless differently. His take: There's not nearly as much competition among those offering wired connectivity, compared to the wireless market.

And, finally, he spoke of Google TV and even got a laugh from the audience when he said a TV executive asked him: "Do you realize you're taking a dumb television and making it smart?" to which he replied, "Yes."

He said he disagrees that television's revenue stream is being exposed to vulnerablity. He sees the potential for people to watch more television - maybe over traditional broadcast or maybe over the Web. But what about a streaming Netflix app over GoogleTV? Doesn't that jeopardize television's revenue stream? Absolutely not, he said. Netflix is already part of the significant revenue stream on television.

Well said.

The Web 2.0 Summit continues tomorrow with on-stage conversations with Yahoo CEO Carol Bartz, Facebook CEO Mark Zuckerberg and others.

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