Schmidt: 'It's my fault Google didn't come up with a Facebook'

The search giant's former CEO says he overlooked the threat of social networks - and failed to seal a tie-up with Facebook. Will Google live to regret it?

by Emma Haslett
Last Updated: 08 Mar 2013
Most of us have probably forgotten to reply to the odd email due to the pressures of work. But the consequences are unlikely to be as far-reaching as Eric Schmidt’s failure to spot the biggest technology trend of recent times may turn out to be.  The Google CEO-turned-executive chairman said at a conference yesterday that the company didn’t place more of a focus on social networking because he was too ‘busy’ to notice it. And when he did finally lift his nose from the grindstone to spot millions of people flocking to a new-fangled site called ‘Facebook’, the company in question wasn’t keen on a tie-up. Judging by its subsequent success, that was an excellent call…

Schmidt, who moved upstairs when Google founder Larry Page re-took the CEO reins in February, said he first became aware of Facebook’s threat to the company about five years ago, when he wrote internal memos recommending the company think more about social networking. One of his ideas was to approach Facebook directly and ask for a tie-up – but that, said Schmidt, was politely turned down. Credit where it’s due, though: he takes the blame entirely. ‘A CEO should take responsibility,’ he sighed. ‘I knew I had to do something and I failed to do it.’

As anyone who tried and failed to make sense of the now-defunct Wave, and Buzz (still hanging by a thread) will testify, Google’s subsequent social networking offerings have fallen a bit flat. But apparently, Page’s attentions will now be focused more fully on coming up with a Facebook competitor – or at least, a stickier social network offering.

There are those who might point out that Google is already the best-known brand on the web and the king of search, grossing $29bn a year – so what’s the point in branching out into areas where it’s already failed to make Waves? But Schmidt insists Google must come up with a rival offering, or it’ll miss out on valuable ad revenues – which will otherwise be piled into the likes of Facebook instead. He also mentioned losing out to group buying website Groupon – another area where Google has just announced details of a rival offering…

Schmidt’s other interesting argument was that every technology ‘era’ has a ‘gang of four’, each of which helps drive the direction of technology. The last era, he said, was driven by Microsoft, Intel, Cisco and Dell. This time around, it’s Google (natch), Amazon, Apple and Facebook. We imagine Microsoft might have something to say about that, but so too may Twitter – which continues to be one of the fastest-growing companies online. Unlike Google, of course, it barely makes any money – but trying to lure users away from it will be a tough ask. If social networking is the future of technology, could it be that Schmidt’s slip-up will result in Google becoming a fifth wheel in this gang of four?

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