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April 9, 2007

Eric Schmidt's Confessions

Fred Vogelstein publishes an interview from 2005 with Eric Schmidt, Google's CEO. It's an exciting conversation that reveals a lot from Google's internal combustion, the long debates between the three key people who run Google, how decisions are made and a difficult moment when Google was very close to split-up.

"Sergey is brilliant, pulsing, right. Larry is brilliant and deep. So Sergey is -- what is it, a supernova, he's exploding his ideas. So with Sergey you listen, you know, he'll be sitting there and he'll be doing something random, right, not paying attention at all, and then all of a sudden he makes this comment that is distinctly different from everyone else and is very incisive. It is how his brain works. Larry would write a 30-page paper on his GPS idea overnight and not sleep."

In the interview, Mr. Schmidt defines himself as the "normal person" from Google's triumvirate.

"I used to give this speech about how you control risk, and the best way to control risk is to have the smartest people working on the problem, and businesses are about risk. An example would be in my first year the question had to do with the development of these advertising networks. Overture was doing well. Would we partner with them? Would we compete with them? We had some preliminary conversations partnering with them. They wanted to buy us. And there were a number of times when I frankly had no idea what to do. But the solutions didn't come as a result of me sitting in a room and inventing it. I don't think Larry and Sergey sat in a room by themselves either. It was an iteration that involved the interactions of five or ten people over a period of time. And the characteristic of such group decisions done right is enormous buy-in."

"The most acute disagreement was over the original deal with AOL (in 2002). The reason was that Google did not have enough cash to fulfill the guaranteed payout in the contract (in the future). And the actual sequence is quite interesting because you see the beginnings of the management structure. So in the first place, the deal itself was a very good idea, we all agreed to it. Because the AOL people were very smart, and because Google was a new business, they negotiated very, very cleverly. (...) And I remember one day where we argued to the point where I actually stopped the argument. I thought it would split the company. It was the closest point -- and this is now four years ago, three and a half years go -- it was the closest point I ever saw literally the company falling in two."


  1. I appreciate the photo credit - you'd be amazed how many people just embed my + my friends' photos in their blogs without mentioning our names or linking back to our original photos.

  2. I wonder how the Google China discussion compared to the AOL discussion in terms of splitting the company. (After all this interview was in 2005, and Google only made their China move/ discussions public in early 2006.)

  3. I like the summaries and wonder what would have happened if Google split over the row with AOL.

    Here's my take.


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