Search Biz: Yahoo-Microsoft Talks Over! Google CEO Downplays iPhone Conflict, Says Google Has No “Evilmeter,” & The Argument Against MSFT CEO Steve Ballmer

Today’s Search Biz is a nearly all Google column. Barry wrote about departures at Yahoo and Ask, which were originally part of today’s roundup. So today’s column is mostly culled from a series of interviews in which Google CEO Eric Schmidt opines about a range of topics, from Android-iPhone competition to whether Google has become a monopoly.

Schmidt played down conflicts of interest arising from his seat on the Apple board, as the company seeks to launch the hypothetically competitive mobile Android platform. Regarding his recusal from iPhone related discussions, Schmidt is quoted as saying, “I’ve only done this once or twice, so it’s not as common as it sounds.”

In an interview with Fox Business, Schmidt said that a Google stock split was “unlikely” though not impossible:

“We think that a high stock price is a symbol of the kind of shareholder that we want,” Schmidt said, adding that a shareholder who would buy the stock at a high price understands the “long-term vision” of what Google is trying to do.

Schmidt also commented on perceived anti-trust issues arising from an anticipated search partnership with Yahoo (expected to be announced today):

“If there were [antitrust issues] it’s perfectly possible that you could do commercial deals that look like outsourcing deals, which are non-exclusive and industry structures [that] allow everybody to win, and this is extremely common in modern markets. If you look at the automobile industry and other industries like that, you have suppliers who supply other people,” Schmidt said. “So if there were a deal, it would be based on those sorts of principles.”

Perhaps most interesting is his comment on the lack of transparency in Google’s algorithms:

Google is often criticized for not being transparent enough with its advertising business, and Schmidt said he understands the criticism, and it’s one even he would make. “The reason why we haven’t made it as transparent as some people would like is that we are always changing those systems, and we’re worried that people might become attached to one part of the system, and we tune them based on measured end-user quality,” Schmidt said.

In yet another interview, this one with Ken Auletta of the New Yorker (reported by Reuters), Schmidt said, “We don’t have an ‘Evilmeter,'” referring to Google’s semi-official motto “Don’t Be Evil.” Schmidt said this is intended to stimulate internal discussion about corporate ethics and wasn’t intended to be an external standard for the company.

Revisiting the question of whether Google has effectively become a “monopoly,” Schmidt told Auletta the answer was no because while Google might dominate paid search, it lags Yahoo on the display side:

He said that while Google may dominate the market for text-search advertising against weaker cross-town rival Yahoo Inc, Yahoo is the leader in the hot online display ad market, preferred by corporate marketers for brand marketing. He noted it is a larger market than text-based search ads.

Schmidt also again vaguely referred to new monetization and ad models for YouTube coming this year, which is certainly a display ad vehicle. And speaking of which, ValleyWag posts about a YouTube revenue sharing agreement that was first exposed by Silicon Alley Insider and then removed at Google’s request. It shows the revenue split and other details of the partnership.

Finally, turning to the one non-Google item on Search Biz today, the MSFT extreme makeover blog, in a post titled “Eight Years of Wrongness,” argues that CEO Steve Ballmer is not the right guy for the top job in Redmond and that the company has been underperforming during his tenure:

It’s sobering to realize that during Ballmer’s term as CEO, MSFT has underperformed almost all of its top tech peers (including AAPL, IBM, HPQ, SAP, INTC, CSCO, SYMC, NOK, ORCL, ADBE, RIMM, QCOM, Ebay, and AMZN), and badly lagged the major averages.

For more on Ballmer in his own words, see our post on his interview with Washington Post editors.

Postscript: Microsoft and Yahoo have reportedly concluded their talks without a deal and Yahoo stock is down today, partly perhaps on this news or the fact that Carl Icahn is “dumping” the shares, according to Silicon Alley Insider. Thus is would appear, regardless of the outcome of the Icahn proxy action, that the Microsoft-Yahoo takeover drama is finally coming to a close. For more, see discussion on Techmeme here and here.

Second postscript: Microsoft just issued the following statement:

MICROSOFT ISSUES STATEMENT REGARDING YAHOO

REDMOND, Wash. — June 12, 2008 — Microsoft Corp. today issued the following statement:

“In the weeks since Microsoft withdrew its offer to acquire Yahoo!, the two companies have continued to discuss an alternative transaction that Microsoft believes would have delivered in excess of $33 per share to the Yahoo! shareholders. This partnership would ensure healthy competition in the marketplace, providing greater choice and innovation for advertisers, publishers and consumers.

“As stated on May 3rd and reiterated on May 18th Microsoft was not interested in rebidding for all of Yahoo!. Our alternative transaction remains available for discussion.”

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor to Search Engine Land, a member of the programming team for SMX events and the VP, Market Insights at Uberall.