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"Facebook's done a number of things which I admire. Facebook can be understood as a great site to spend time with your friends and photos and postings and social updates. But another way to understand it is that it's the first generally available way of disambiguating identity. And identity is incredibly useful because in the online world, you need to know who you're dealing with. Historically on the Internet, such fundamental services are not owned by a single company. They're multiple sources. I think the industry would benefit by having an alternative to that. From Google's perspective, if such an alternative existed, we would be able to use that to make our search better, to give better recommendations for YouTube, to do various things involving friends."

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The New Online Wars
Google's Eric Schmidt on the 'Gang of Four', privacy and evil dictators

Eric Schmidt spent 10 years as chief executive of Google Inc., taking the company from a rapidly growing search engine to a global behemoth that provides operating systems for mobile phones and Web-based software for consumers as well as being the synonym for finding stuff online. Mr. Schmidt, who recently handed over the CEO job to Google co-founderLarry Page, is now the company's executive chairman. He spoke with Kara Swisher and Walt Mossberg about the new platform wars, keeping information private and using technology for good and evil. Here are edited excerpts of that discussion.

Google Chairman Eric Schmidt kicked off the D9 conference in Rancho Palos Verdes, CA. In this highlight reel he talks with Walt Mossberg and Kara Swisher about the "Gang of Four," his biggest regret from his tenure as CEO, and his unique retirement plans, among other things.

MR. MOSSBERG: There's a new platform war taking place. Everyone knows about the
Windows vs. Apple platform war, which Microsoft won handily in the PC era.
We're in the post-PC era, and there's another platform war going on. You have
this idea about the "Gang of Four." Can you talk about that?

MR. SCHMIDT: If you look at the industry as a whole, there are four companies
that are exploiting platform strategies very well. One of them is Google; the
other three being Apple, Amazon and Facebook. We've never had four companies
growing at the scale that those four are in aggregate, in customers, cash flow,
reach, partners, software development tools and so on. These are global
companies with reach and economics that 10 years ago or 20 years ago, one
company hadâ€"typically, Microsoft, or before it IBM.

What's more interesting to me now is that each of them is exploiting in one way
or the other a platform for creativity that people are building on top of. If
you look at Facebook, you have now a set of competitors on top of Facebook who
are going to exploit the identity-relationship model that Facebook has built.

MS. SWISHER: You left out Microsoft in this group because?

MR. SCHMIDT: Because Microsoft is not driving the consumer revolution in the
minds of the consumers. Microsoft has done a very good job of getting itself
locked into corporations and much of their profits now comes from the union of
Windows server and the clients, which they do very well at.

MR. MOSSBERG: If we came back here in a couple of years, would we be down to
two or one, or do you think this Gang of Four continues?

MR. SCHMIDT: It's unlikely that the number consolidates because of mergers
between them, because they're all too big to get through the necessary global
regulatory structures. More likely as one begins to miss the mark, a successor
comes along.

MS. SWISHER: Let's talk about each of them and Google's relationship to them.
It's been testy for sure with Apple.

MR. SCHMIDT: It started off very much a partnership. Now with the success of
[Google's mobile-phone platform] Android, it's more rough.

MS. SWISHER: And with Facebook?

MR. SCHMIDT: We've tried very hard to partner with Facebook. Traditionally
they've done deals with Microsoft, I think basically because Microsoft was
willing to give them terms that we were unwilling to give them. But perhaps in
the future.

Facebook's done a number of things which I admire. Facebook can be understood
as a great site to spend time with your friends and photos and postings and
social updates. But another way to understand it is that it's the first
generally available way of disambiguating identity. And identity is incredibly
useful because in the online world, you need to know who you're dealing with.
Historically on the Internet, such fundamental services are not owned by a
single company. They're multiple sources. I think the industry would benefit by
having an alternative to that. From Google's perspective, if such an
alternative existed, we would be able to use that to make our search better, to
give better recommendations for YouTube, to do various things involving
friends.

MR. MOSSBERG: What about the fourth oneâ€"Amazon?

MR. SCHMIDT: Amazon has done a very good job with the cloud layer to build a
set of services generally known as S3. They also have a lot of applications and
they're able to actually integrate that across the e-commerce sites. They've
also done a very good job with their physical platform, the distribution of
goods. And they continue to grow it very rapidly.

--- END EXCERPT ---

Printed in The Wall Street Journal, page R3

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