Google's Team Opens Up in Sun Valley

Google CEO Eric Schmidt, along with co-founders Larry Page and Sergey Brin (who joined towards the end) sat down to talk to journalists at the Allen and Co. conference in Sun Valley for an hour and fifteen minute no-holds barred question and answer session. (This a year after Schmidt sat down for an hour-long on-the-record rap session with journalists in the Sun Valley Lodge bar at midnight.)

Google CEO Eric Schmidt, top, and co-founders Sergey Brin, left, and Larry Page are seen at company headquarters in Mountain View, CA.
Google CEO Eric Schmidt, top, and co-founders Sergey Brin, left, and Larry Page are seen at company headquarters in Mountain View, CA.

1) The Yahoo Deal

Schmidt reiterated that Google totally endorses Yahoo's choice to turn down Microsoft's offer. In defense of Yahoo, he said that Microsoft's deals aren't always what they appear to be. Larry Page pointed out that while the dollar number may have sounded appealing, the terms of the deal, which aren't laid out for public analysis, could be terrible. Schmidt and Page were particularly negative on Microsoft -- criticizing their dealmaking style and their monopolistic tendencies. Soft-spoken Schmidt got animated when attacking Microsoft.

And then there's the fact that the Google guys think it's in the best interest of everyone for Yahoo to be an independent company. Schmidt says when Microsoft made its offer to Yahoo, he was concerned that they would use the partnership to lock Windows users to the Yahoo browser. The Google guys say over and over they believe in competition, or to quote Schmidt, these kinds of limits on consumer behavior are "just not the way the Internet works."

When it comes to competition, they seem unconcerned about their deal with Yahoo. Schmidt reiterated that the relationship with Yahoo is non-exclusive, and that it will actually be very good for Yahoo

2) The Viacom Lawsuit and Relationship with Hollywood
Viacom's 2) The Viacom Lawsuit and Relationship with Hollywood lawsuit against Google continues to be a hot topic here in Sun Valley. Thursday, Viacom CEO Phillippe Dauman brought up issues in the Viacom lawsuit in front of a room full of people. Schmidt responded to the journalists, saying that the lawsuit was an error and that Viacom should drop the suit. The Google guys say it's simple -- they're entirely willing to either compensate content creators or take the content down.

While the Viacom relationship is clearly tenuous, Schmidt says their dynamic with the rest of the media giants is very positive. Acknowledging that the revenue model for digital distribution is still being figured out, Schmidt says that the media giants are working with Google to try different distribution models. He also claims media companies like Disney and CBS love the system that allows them to tag their content: it's computerized and simple.

Schmidt says the adoption of their digital distribution system has been what he calls "bottom up." Smaller independent content companies have been much faster to work with Google and YouTube. And Schmidt says this year Google's relationship with the media giants is much better than it was last year but it sounds like it's been a long process.

3) Optimism
Doom and gloom abound, between oil prices, consumer confidence, and the stock market. But Schmidt made a point to say that he's truly optimistic. He believes that America's creativity will work things out. He's inspired by working with all the young people at Google, saying they're "inventing the future." Pointing out that two billion people in the world are now entering the middle class, he says it's a very exciting time. He claims that the sun will rise tomorrow and, to remember that it's a positive world. He, Page and Brin were all pumped up about the education panel they heard this morning, fascinated with the idea that the same amount of money can be spent on education much more efficiently.

4) Google and Politics
When we caught Schmidt solo after the journalist gaggle, I ask him about the presidential campaign. Schmidt is DONE with this administration. He says whether Obama or McCain wins, either would be better for Google and technology. He seemed to appreciate the fact that both of them have visited Google's campus and seem interested in the way their business works.

5) Energy and the Environment
I caught Schmidt for some off-camera comments about the environment, about which Google has been very conscious. Schmidt was marveling at the fact that our economic situation would be so much better if we won't reliant on fossil fuels. Now we're being forced to conserve because oil is so expensive. Schmidt says we'll see what happens with environmental responsibility now that we don't have a choice, financially.