Abu Dhabi Magical Media Summit by Ola Ahlvarsson Part III (feat. Eric Schmidt)

[The Abu Dhabi Chronicles continues]

Abu Dhabi Media Summit an invite-only event featuring the cream of the cream in the internet and media industry seem to have made ripples across the industry. With the top brass from NewsCorp, Google, AOL, Microsoft and other movers and shakers in the industry under one roof, it might have been silly to expect anything else actually. Our very own SIME Chairman, Ola Ahlvarsson was also around for the event this week, and inspiration seems to be an unspoken theme in all the 4 days from March 9-12, 2010. Below are some of the musings from Eric Schmidt’s keynote.

Read about Eric Schmidt here

The CEO of Google starts his keynote with a humble request to change the name of the whole event to Abu Dhabi Magical forum since the level of people, creativity and exchange of ideas are all sufficient to create magic. And to follow that metaphor I must say that Eric speech is magical and the informal discussion that follows holds the same level even though
it´s unrehearsed. Eric is not only the person in the world that sits with the most information on how the Internet really works, he can also draw mind boggling conclusions about the future, and in addition he is really funny and
accessible for anyone (well, at least anyone in the room).

The following is an attempt to relate the essence using his own words as much as I could but skipping some passages and questions. The full talk will later be available on youtube under Abu Dhabi Media forum.

“The Arab region grows more than 100% per year on the web which is exciting for a company like Google. There are some very important things that are fuelling the growth here and everywhere in the world.

The web is mobile

In it´s first shape the Internet was about getting people to a web page. That is no longer the case. Now it´s all about mobility. It is mobile first and I am not limiting mobility to mobile phones I mean any mobile hand held device or pad. In Google the smartest developers are focusing on mobile and we start with mobile and then think about desktop applications. Mobile is growing 8 times faster than the web did. There are more smart phones already than PC’s with Internet connection.

The mobile is powerful. A Nexus one phone today has got the capacity of 1000 of the sun servers I used to work with when I as a developer. Just wait until next year….

Things are happening all over the world. In Russia they have the highest penetration and time spent on social networks ( I googled that). A mobile phone saved two Australian girls that were stuck in a tunnel. What did they do? They updated their facebook accounts….they did not even call. Your phone is not lonely anymore.

Translation is opening new ways of interacting. Now we can cross reference 160 million web pages with 70 languages. This means that you can text anyone regardless if you know their language. Impressed yet? You guys all probably speak 7 languages so you might not be so impressed but now you can go into a restaurant, photograph the menu and understand all dishes in any language you speak. Or get voice translation over your phone. Impressed now? The future of the web is not about pipes. It is about mobile.

Between the first human on earth and 2003 we created 5 Exabytes of data. Today we create the same amount in two days. No wonder we are a little bit tired. But in 2013 we will produce 667 Exabytes. Will we run out of capacity? Will we all be able to be connected? Yes our IPV6 can provide the same number of possible connections as there are atoms in the world. We will be able to connect your shoes or any other item to the web.

Cloud Computing

The second great thing that is happening is cloud computing. If you combine mobility with the ability to buy and store capacity in the cloud, the barriers for creation are lowered and the possibilities endless. You might think that your blackberry is smart enough or that your computer speed is ok but the growth will continue to accelerate and so will your data and capacity consumption. The increased amount of data creates new opportunities. Youtube and Facebook are examples of world leaders that did not exist 5 years ago. The speed of technology enabled their growth.

Other opportunities will arise. We can for example track where you are and where you probably will be going, if you allow us and give permission.

Inverting the media model

We in the media need to think where these opportunities can take us. Google sponsored super bowl which for those who know superbowl would agree that it is the traditional media’s strongest statement in the US. We got 100 million viewers and we are happy with that. At the same time we got 500 million clicks on the video online…it must have been a good commercial. On tv we got eye balls, online we got a click which requires an action by the user. What we are doing is an inversion of the old model. If you are a tv talk show host or someone with a strong creative idea you can start with an online strategy, build an audience, prove your case and the user traction and then launch on broadcast tv. The web wont replace tv or movies but becomes a cost efficient test bed that anyone can access and that is the starting point for a lot of creativity. This holds true for marketing campaigns too.

The mobile phone can be large, it can be a reader that can help me turn the pages, it can remember where I was, it can translate and do a lot of things. Magazines are phenomenal but there are a lot of things that a reading pad can do that a magazine cannot do. Most of the readers come with integrated, personalized targeted advertising solutions.

So we will have the same basic content on many bearers and the web experience enhances the content in many ways as well as the advertising opportunities. This makes me draw the conclusion that online advertising should be a lot more expensive than traditional media.

Innovation at the speed of life

To be an innovator you cannot use Walt Disney’s words, be intimidated by your own actions. There will be new emerging giants that are not conceived yet. One space for instance with a lot of traction is social mapping like Foursquare and Gowalla. Someone might go from hype to a global leader but it´s too early to tell. What we can tell is that it will happen and happen again.

How do you become successful in innovation? You have to try, measure and try again. I don´t care if you think your service is great. I don´t care what YOU think. I want to know what the users think. And you can ask them.

An American with a smart phone spends on an average 2 hrs per day with their apps. 9% of all the time on the web is Facebook and Youtube. That time comes out of something and calls for changes in how we see media. Volkswagen launched a new model starting with aps. Then came traditional marketing.

So if all of these trends are so obvious….why are we so confused? When I grew up a record store sold records a radio station played radio and it was simple. Now everyone can be your potential partner and user. You have a platform, it is mobile and if you use this right and listen to your users you can sit back and relax….it´s fun.

Keeping pace with the advancements and catalyzing more growth in Google

Are there problems with this development? A problem I see at google is that deep breathing is a dying art. We short message, short everything and stress around without stopping to breath or reflect. But the negative impact is manifold compensated by the benefits. In the next five years everyone can communicate directly with everyone. There are 5 billion people coming online. What do these people want? I hope that they want the same things as us. There will be millions of people communicating in languages we have never heard of in countries we ignore. And we will start understanding the world better when we communicate more. And the objective we all should be driving at comes closer. Tolerance. And people who live online are different. They are not nationalistic to the same extent. They are engaged and wants to discuss issues important to them but not necessarily in a traditional political party way.

Audience Questions

Q: WHERE DO YOU STORE ALL OF OUR DATA?

A: In Googles servers.

Q: WHO HAS ACCESS TO THESE SERVERS?

A: Google employees that are not only monitored internally very strictly but also increasingly regulated by the local legislations that we of course obide by. If not us then who would you like to access to the data? We do not want to misuse the data. We considered for example to predict the stock exchange we we of course could do but decided not to. Its not legal or
ethical. Also consider the fact that we only have the users confidence when we treat their data in a way they are comfortable with. This crucial for our business.

I have been waiting for an election that was won on the web, and this happened last election in the US. Politicians know this and must engage and be more transparent or suffer the consequences. On a grass root level engagement can be flash mobs or twittr storms. Still today the tanks could start rolling and the web movements stopped in certain markets but one
should not forget that the people remember.

Q: UP UNTIL RECENTLY GOOGLE COULD NOT DO ANYTHING WRONG BUT NOW ADAYS MORE AND MORE PEOPLE ARE ANGRY WITH YOU AND FOR EXAMPLE MICROSOFT ARE PUSHING THEIR USERS TO PRESS CHARGES FOR CONTENT THEFT AND DATA ISSUES. WHEN DID IT ALL START TO GO WRONG?

A: What you are describing is success. You must understand that what Google is doing is based on massive scale. It is distruptive and changes many industries and sometimes breaks things.

Q: ADVERTISING IS SAID TO BE 50% DOWN THE DRAIN AND 50% EFFICIENT. DOES THAT MEAN THAT 50% GOES AWAY NOW WITH MORE MEASSURABILITY?

A: I draw the direct opposite conclusion. Now that we know where the marketing is efficient will we not only get the 100% but marketing budgets will increase dramatically. For the companies we have seen that we deliver more profits than the cost of marketing we have seen no limits. I am not worried about revenues.

Q: SPIDERMANS UNCLE SAID. WITH EXTRODINARY POWERS COMES EXTRAORDINARY RESPONSIBILITY.

A: Google is a company based not on business goals but on other goals. Our mission is to organize all the worlds information and make it easily available everywhere because we believe this leads to a better world. Therefore we are organized in a specific way and owned so that we just like a media company can have degrees of freedom with in the boundries of the regulations. But bear in mind that a lot of the criticism against us are from a small group of very vocal voices and business leader with their own interests. Our mission is not about making them happy but about makin the users happy.

Q: IF CONTENT IS THE DRIVER. HOW DO WE AS THE ARAB REGION GO FROM BEING CONSUMERS OF CONTENT TO BEING PRODUCERS OF CONTENT?

A: Write more! Today there is more Chinese content on the web than English and the creativity in the region here as well as the strong growth of the region makes it a top priority for us and other companies wanting to grow with you.