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Andy Beal Dares to Ask Google CEO About Click Fraud



On Wednesday, Search Engine Strategies attendees were treated to a keynote chat between Danny Sullivan and Google CEO, Eric Schmidt. Much has been covered of that session and I’ve already highlighted what I found to be the most interesting. Immediately after the chat, around twenty journalists, and a handful of bloggers, were given the chance for a private Q&A session with the Google chief. I was lucky enough to be on the list and, as the session was “on the record”, I took lots of notes and even asked Schmidt to discuss the real threat associated with click-fraud.

On Net Neutrality…

Schmidt touched on the potential implications of Net Neutrality. He noted the Google “had enough money from cash and profits” and “would be able to handle those expenses”. He said the biggest problem is that the internet has traditionally been a level playing field and that Net Neutrality could hinder innovation that has typically come from smaller companies.

On the lack of a unified user interface…

Chris Pirillo of Gnomedex fame asked if the company had given any thought to standardizing the user-interface for the products that they launch. Schmidt said that he had suggested the same thing to Brin and Page a couple of years ago and they told him he was wrong. Their concept is to build the user-base first. “If you build an integrated solution, it doesn’t matter unless people use it,” said Schmidt. He added, “We want to release products quickly, we want to get them out there, we want to see if they work. I don’t mean work technically, but do they solve a real problem. If they solve a real problem, it’s relatively easy to build an integrated solution.”

This philosophy certainly reinforces what I have noticed over the past few years. Launch enough products in their rawest form and see what sticks to the wall. Once you’ve identified what users actually use, you can then start integrated them into a central interface. Of course, Google could be facing a “chicken and the egg” syndrome, in that do some of their products stall because the interface is so bad.

On separation of organic and paid search results…

Moving on to the next question, Schmidt was quick to clarify a statement made by a journalist who “guessed” Google doesn’t share search history with Adwords. “Please do not use the word ‘guess’,” said the Google CEO, “we do not link the search results to the advertising system.” Adding, “They are two separate systems.”

On the click fraud threat…

I then asked Schmidt about their recent response to the flurry of click-fraud studies and how it appeared Google was stepping up their efforts to downplay click-fraud. I asked him if this recent focus was as a result of actual increased incidences of click-fraud on AdWords or was the threat from misinformation being spread about click-fraud levels. Schmidt replied, “It’s actually more the later, but it’s actually neither.” He went to explain that they had submitted a detailed analysis of actual instances of click-fraud, in response to the recent lawsuit. “I’ve also been misquoted by a number of people in the press, somehow saying that this is not an important issue. It is an important issue that is under control.”

Still on click fraud, he offered that it’s an issue that is not going to go away. “It’s not gotten worse, it’s just gotten more attention and I think the attention is good, by the way.” I pressed him further and asked if they were seeing click-fraud growing, remaining steady or declining. “I’d say it’s roughly the same,” answered Schmidt. He continued, “It’s hard to know, because you don’t know what you don’t know.” He said that based on their estimates, “the problem is manageable.”

On keeping up with new technologies such as Ajax…

On funny mashups…

He was asked about “mashups” and which he had seen, that impressed him. He shared details of a funny mashup he had seen, that added a golf game to the satellite imagery on Google Earth.

On expanded AdWords to other channels…

Schmidt the moved on to the topic of taking the AdWords platform beyond just search. Surely Wall Street is happy to see Google diversifying where it gets its ad revenue. So did Google simply stumble into non-search channels? “We’ve always wanted to monetize video and online communities [referring to recent deals with MTV and MySpace] but you have to wait until you have the partner…and the technology”. He now believes that they have the targeting and the scale to be able to make partnerships with these communities and monetize them. So why are traditional media companies turning to Google? “Their models are always changing and we’re learning from them…their existing model is being affected by internet, so how can we help them.”

Schmidt also clarified that Google is not necessarily looking to make “more deals” with media companies but focusing “on the deals we have already announced.” He added, “Eventually, there will be more deals, but it is easy to get into ‘deal’ mode.”

Google’s plan is to look for more “low-hanging fruit” and believes that with the success of AdWords and AdSense for Content can be transitioned to other industries. Magazines and newspapers are “folks who will clearly benefit from more targeted advertising…we are in the process of building that business.” With radio, “we bought a company called dMarc, which looks like it’s going to do very, very well; those products come out in the next few months.”

Schmidt was clearly excited about the new deal with Viacom and MTV, explaining the potential of appending videos with ads, discussed with MTV’s president. “If it works – of course, we’re just beginning the trials of that – then it will offer a model that is on the scale of AdSense for Content, AdSense for Search for video and multimedia,” said Schmidt. “The other big area are these online communities” and Google had been “talking to [MySpace] for a long time.”

On how they’ll target ads on video…

One interesting revelation is that Google will likely use the closed-captioning found on Viacom’s video content, in order to understand the context of the video and serve a relevant and targeted ad. With any of these multimedia deals, Google will expect the majority of the work to be carried out by the content creator, with Google mostly being the conduit for the videos and ads.

On whether Google is still making good deals…

Schmidt was asked if the competition from other companies, such as Microsoft, still allowed Google to negotiate the same type of terms they were able to get 4-5 years ago. “I think so,” answered Schmidt, “I don’t think they’ve gotten any worse, the numbers are much, much larger.” It was amusing to hear Schmidt tell the room that he “had a cow” when the company guaranteed a certain number of millions of dollars in the AOL deal, but he feels the company has grown so much more and that the deals will continue to grow in size.

Finally, how Google protects personal data…

Lastly, with AOL accidentally releasing a whole bunch of private data, how likely is it that the same could happen with Google? It’s not going to happen, according to Schmidt, “we have very specific security plans for attackers” and their compliance with Sarbanes Oxley requires them to protect the data. I’m sure AOL had the same standards, but it’s clear that Schmidt knows that Google is under a larger microscope and if it wants searchers to use more and more of their services, they’ll need to protect personal data at all costs. From Schmidt’s tone and body language, it’s not going to happen on his watch.