Eric Schmidt believes Microsoft has an “evil room”

I went to an interesting media briefing in New York this morning given by Eric Schmidt and Sergey Brin, the chief executive and the co-founder of Google.

They covered various topics, including signs of economic recovery in Google’s business and its tussles over the US class action settlement that would allow Google to digitise many “orphan” books that are no longer in print.

The most gripping moment, I thought, came when Mr Schmidt responded to a question about why Google would not go the same way as Microsoft now that it is so large and powerful.

This, in full, was his response:

“There are many, many reasons why we are not going to be like Microsoft. The first has to do with the culture of the founders, the culture of the company, the value systems. The second has to do with the majority of the users, and usage is one click away from moving to a competitor, which is not true of more embedded platforms in high tech. It is very difficult to move out your database system, it is very difficult to move out of Windows, for technological reasons whereas it is quite easy to move out of these online services.

“The third is that, having taken such a strong position as a company, if somehow we went into a room with the evil light, and somehow evil came all over us and we exited that room and we announced an evil strategy, we would be destroyed. We would be destroyed in reputation, we would be destroyed in consumer behaviour, consumers would mass against us, and so forth. There is a fundamental trust relationship between Google and its users.

“And the fourth is that none of us would ever want to go through the kind of legal proceedings that would then follow in enough countries to make it painful. So there are positive reasons and there are good negative reasons, plus I do not think any of us are going anywhere and we have not yet found the evil room on our campus.”

I then asked him if this implied that there was an “evil room” on Microsoft’s Redmond campus, and he responded:

“I did not say that. You may interpret it in any way you wish.”

I suppose there are couple of lessons from this, apart from the fact that I have never actually heard the chief executive of a public company suggest that a competitor has an “evil room” before.

One is that the question clearly concerns him. When it was posed, he launched straight into the elegantly structured reply with hardly a pause. That suggests to me that, with regulators and courts now circling Google more closely, it is on his mind.

A second is that Google’s executives still regard themselves as acting in the public good in a way that sets them apart from others. This sense of righteousness, sometimes shading into self-righteousness, was a mark of Google from the beginning.

Last, it feels hubristic to me. Any company with Google’s power and influence that believes so firmly that everything it does is for the public good is surely riding for a fall.

Update: There are a couple of reports of the meeting here and here, which include details of other topics covered by the Google executives

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John Gapper is an associate editor and the chief business commentator of the FT. He has worked for the FT since 1987, covering labour relations, banking and the media. He is co-author, with Nicholas Denton, of All That Glitters, an account of the collapse of Barings in 1995.

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