SCHMIDT: THAT WAS A SCREW UP. WE FIXED THAT.WE'RE NOT PERFECT.

CRAMER: ALL RIGHT.NOW, I WANT TO TALK ABOUT PHILOSOPHICALLY, MY DAUGHTER GOT HER FIFTH GRADE ASSIGNMENT. THE FIRST THING THAT HAPPENED WAS THE TOP OF THE ASSIGNMENT, YOU ARE NOT ALLOWED TO GOOGLE IT.

SCHMIDT: REALLY?

CRAMER: YES.

SCHMIDT: ITS LIKE THE OLD THING YOU CAN'T USE THE CALCULATOR.

CRAMER: TALK ABOUT THAT.

SCHMIDT: KIDS USE IT ALL THE TIME BECAUSE IT'S A NEW WAY OF LEARNING. WHEN I WAS GROWING UP, IN VIRGINIA, THEY MADE ME MEMORIZE THE NAMES OF ALL THE CAPITALS OF EVERY COUNTY IN THE STATE. COMPLETELY USELESS INFORMATION. SO KIDS TODAY ARE GOING FROM KNOWING EVERYTHING TO BEING ABLE TO SEARCH VERY QUICKLY. THE KIDS NEED TO LEARN HOW TO SEARCH BECAUSE THEY'RE GOING TO HAVE TO SEARCH EVERYWHERE. THEY'RE GOING TO HAVE SEARCH EVERYWHERE ON DEVICES THAT THEY CARRY WITH THEM.

CRAMER: SO YOU'RE NOT WORRIED ABOUT INTELLECTUAL LAZINESS BECAUSE YOU GUYS HAVE DONE WHAT IT TOOK ME FOUR YEARS OF COLLEGE TO DO. HOW TO DO A THOROUGH SEARCH FOR PAPERS ETC

SCHMIDT: NOW, WHEN YOU WALK DOWN THE STREET, YOU SAY, WOW, IT'S INTERESTING. I'M RIDING THE TRAIN BETWEEN HERE AND D.C. AND I READ THE HISTORY OF THE TRAIN LINE.I COULD NEVER HAVE DONE THAT BEFORE.

CRAMER: A LOT OF TIMES, I THINK THAT WHAT'S HAPPENED IS THAT GOOGLE HAS BECOME SO POWERFUL AND WE'VE TAKEN IT FOR GRANTED AND WOULDN'T KNOW HOW TO DO A LOT OF THE THINGS.

SCHMIDT: I DON'T BELIEVE IN THE LAZY PEOPLE DUMB PEOPLE. I THINK PEOPLE ARE SMARTER BECAUSE THEY HAVE ACCESS TO MORE INFORMATION. GOOGLE JUST ORGANIZES IT. THE PEOPLE ARE STILL ASKING THE QUESTIONS, THEY'RE STILL THINKING IT. THEY HAVE SO MUCH MORE INFORMATION AVAILABLE TO THEM.

CRAMER: OKAY. A LOT OF THE PEOPLE FEEL THAT WITH THE 26% GROWTH YOU HIT FOR DOMESTIC THIS QUARTER THAT YOU'VE TAPPED OUT DOMESICALLY ANDTHAT THE GROWTH IS GOING TO HAVE TO BE INTERNATIONAL.

SCHMIDT: BY THE WAYMOST WOULD SAY 26% IS GOOD?

CRAMER: I AGREE, BUT THERE'S 31 ANALYSTS WHO SAY YOU OUGHT TO FOCUS ON THIS.

SCHMIDT: FIRST, WE DON'T KNOW WHAT'S GOING ON WITH THE GLOBAL ECONOMY. GOOGLE WILL DO BETTER IN ANY KIND OF SLOWDOWN THAN NON-TARGETED ADVERTISING BUT WE MIGHT BE AFFECTED BY IT YOU NEVER KNOW. THE IMPORTANT POINT IS THAT OUR MODEL CONTINUES TO WORK AS PEOPLE ARE SHIFTING FROM OFFLINE TO ONLINE AND THAT SHIFT IS GOING TO HAPPEN NO MATTER WHAT.

CRAMER: DO YOU THINK WE'RE GOING TO SEE, LET ME DO THIS. GOOGLE HOME PAGE. IF WE CAN GET IT UP. I THINK YOU'VE REVOLUTIONIZED ADVERTISING. WHY CAN'T YOU SELL AS PRESENTED BY ANHEUSER-BUSCH.

SCHMIDT: WE ABSOLUTELY COULD

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