Google CEO's new paradigm: 'cloud computing and advertising go hand-in-hand'

Google CEO Eric Schmidt, Ph.D. in computer science, has gotten “advertising religion.” Schmidt may be an electrical engineer by trade, but he has become a marketer by vocation.

Schmidt extolls a newfound power of advertising to fund “all of the software innovation.”

At the Search Engine Strategies Conference earlier this month, Schmidt described the “old” client/server computing business model, which he characterizes as “largely invented by Oracle”:

It was a direct sales force that would go in and sell complicated software to enterprises that they would integrate and do important business functions.

Schmidt embraces “an emergent new model”:

It starts with the premise that the data services and architecture should be on servers. We call it cloud computing – they should be in a ‘cloud’ somewhere. And that if you have the right kind of browser or the right kind of access, it doesn't matter whether you have a PC or a Mac or a mobile phone or a BlackBerry or what have you – or new devices still to be developed – you can get access to the cloud…

For Schmidt, advertising enables a new cloud computing based paradigm:

the analogous thing that happened to make this possible that I certainly didn't see 10 years ago was the development of advertising in this new forum.

And so what's interesting is that the two – cloud computing and advertising – go hand-in-hand. There is a new business model that's funding all of the software innovation to allow people to have platform choice, client choice, data architectures that are interesting, solutions that are new – and that's being driven by advertising.

Of most interest to Schmidt, however, is ensuring that Google derives the most value from the new ‘cloud computing and advertising go hand-in-hand’ paradigm.

Schmidt confirmed at last months Q2 earnings conference call:

we are in the search business, so we need all of the information. We want to partner with people to get information so our search end users can see it.

We're also in the advertising business, and we'd like to provide advertising services to people who have their own proprietary content. So depending on where we are in that spectrum, we either do an advertising deal or a content deal or a hybrid deal.

But ultimately our goal at Google is to have the strongest advertising network and all the world's information, that's part of our mission.

Emily White, Google Online Sales and Operations Director, participated in the “Meet The Search Ad Networks” Search Engine Strategies Conference panel. The panel is described as “representatives from major search engines that sell paid listings and other search advertising discuss new aspects to their programs.”

White prefaced her talk, however, with a word of advice to conference organizer Danny Sullivan; Google prefers a different name for the panel, one more aligned with Google's all encompassing view of the advertising world.

White reiterated that Google is an “Advertising Network,” not merely a “Search Ad Network.”

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