Schmidt: Enterprises key to Google's future

Company's CEO, Eric Schmidt, says providing services to small businesses will become increasingly important for future growth

Google's chief executive, Eric Schmidt, has acknowledged that providing applications and other services to business customers will be an important strategy for maintaining growth of the company.

Speaking at a press event in Paris on Tuesday, Schmidt responded to a question on how Google intends to maintain its phenomenal growth rates when the stream of ad revenues from old media to new media, which has sustained the company so far, begins to plateau. "Small businesses and universities are likely to become a significant business for Google as [they] use our leverage in terms of sales and infrastructure," he said.

Google owes its present position to building mass-market applications — search, most notably — but, in the last two years, it has begun to focus on more business-targeted applications and devices, such as the Google Search Appliance, Google Mini and, more recently, Google Apps Premier Edition.

However, despite acknowledging that it is increasingly looking to businesses as potential customers, Schmidt vehemently denied claims that the company is taking on Microsoft. "We keep saying we are not doing that and no-one believes me. We don't position them as competitive — it is a sharing paradigm," he said.

In a wide-ranging question and answer session with over 120 journalists from across Europe, Schmidt was quizzed on a range of subjects, including his reaction to the departure of the chief executive of Yahoo, Terry Semel. "Terry and I started at the same time and we got to know each other well. He really did an excellent job and I am sure Yahoo people will miss him," said Schmidt.

Semel was brought into Yahoo in 2001, following the dot-com crash, to bring some old-media expertise from his time as co-chief executive of Warner. However, Yahoo has consistently failed to keep pace with Google, despite ploughing millions into new projects and, on Monday, Semel announced his resignation.

The Google boss was asked whether he had any advice for Semel's replacement, Yahoo co-founder Jerry Yang, but Schmidt refused to be drawn. "It would be very presumptive of me to give advice to Jerry — he is a very smart guy."