CHARLIE ROSE:  Google has transformed the way we work, live, 
communicate, and access information.  Google is now a noun and a verb.  The 
company was started by Larry Page and Sergey Brin just 11 years ago.  Today 
it produces two-thirds of searches on the web in the United States and near 
70 percent worldwide.

	It’s advertising revenues accounts for 40 percent of all ad spending 
online.  

	But Google is more than a search engine.  There’s also it’s a chrome 
browser, Android, G-Mail, Google News, Google Earth, Google Health, and 
more.

	Ken Auletta of the "New Yorker" magazine gets deep inside this 
enormously successful and consequential company in a new called "Google: 
the End of the World as we know it."  

	He conducted interviews with some 150 current and former Google 
employees as well as the CEO Eric Schmidt and the normally media-shy 
founders Larry and Sergey, as well as a number of people powerful in the 
world of technology.  

	Many of those guests have talked about Google on this program over the 
years, including Sergey and Larry in 2001, three years after they formed 
the company.  

	(BEGIN VIDEOTAPE) 
	
	CHARLIE ROSE:  The idea was that you were not best friends, were you?  

	SERGEY BRIN, GOOGLE COFOUNDER:  I think -- 

	CHARLIE ROSE:  I read some where you didn’t even like each other very 
much.  

	BRIN:  That’s true.  But we’re pretty good friends, nonetheless.  

	(LAUGHTER)

	CHARLIE ROSE:  You didn’t like each other very much in the beginning 
but you tolerated each other.  

	BRIN:  Larry’s kind of obnoxious.  

	(LAUGHTER)

	CHARLIE ROSE:  He’s obnoxious and you’re a nice, easygoing guy.  

	BRIN:  I’m very easygoing so I’m able to get along with him 

	CHARLIE ROSE:  Do you buy this characterization, Larry?  

	LARRY PAGE, GOOGLE COFOUNDER:  No, not really.  Sergey is the 
obnoxious one.  

	(LAUGHTER)

	CHARLIE ROSE:  Has success been able to bridge this gap between you?  

	PAGE:  Well I think we should say the gap was more in the beginning.  
When we first met each other we both really disliked each other.  

	CHARLIE ROSE:  Just tell me why.  

	BRIN:  It was pretty much for the reasons that Larry said 

	CHARLIE ROSE:  Obnoxious?  

	BRIN:  We’re both actually kind of obnoxious, and we met when I was 
recruiting him to a Stanford PhD program.  And Larry had to comment on 
every single thing and be difficult in every conversation, and we had to 
debate every single point, which I guess are things I tend to do as well.

	So while we were continuously arguing, I guess that’s our commonality.  
And we grew to be friends pretty early on when he started in the PhD 
program.  

	MARISSA MAYER:  I think they had a lot of similarities.  I refer to 
them a as Montessori kids.  They both kind of like to do things their way, 
challenge the norm.  And they have been taught to always ask why.

	Sergey is very mathematical.  So he will be the first one to dig in on 
a new equation that we’re using in the search relevance function.  He 
always would really decide things like stock options and salaries for 
almost every employee.  Until we were about 2,500 people you could ask 
Sergey about any person.

	CHARLIE ROSE:  What they made and what their options were?

	MARISSA MAYER:  And he knew within about 5 percent.  So he has this 
amazing memory, especially for numbers, and really likes to dig in on 
things like the deal.  So when we did the deal with MySpace or some of the 
larger deals we’ve done with AOL, Sergey would really engage in the details 
there.  

	Larry tends to be more about the technology and the product and the 
interfaces, what type of storage systems should we have and how will that 
support G-Mail?  Do we have data centers in all the right places in order 
to make queries really, really fast.  

	ERIC SCHMIDT, GOOGLE CEO:  I always worry about scale, getting so big 
that you can’t keep up with things.  The underlying culture is right, the 
innovation rates are right.  It’s very, very difficult for large companies 
to move quickly.  They tend to slow down and tend to develop their own 
processes and so forth.

	And the high-tech industry is full of such examples.  It’s very 
important in our case that that not occur.  

	(END VIDEOTAPE)

	CHARLIE ROSE:  I am pleased to have Ken Auletta back at this table.  
Congratulations, my friend.

	KEN AULETTA:  Thanks, Charlie.

	CHARLIE ROSE:  It’s a great book.

	KEN AULETTA:  Bless you.  

	(LAUGHTER)

	CHARLIE ROSE:  You set out to do what before you decided on Google?  

	KEN AULETTA:  I set out to try and look at how the digital world was 
changing the traditional world of media as we knew it.  And I looked for a 
company that was creating the digital wave, was at the center of this wave.

	And Google was the center of that wave.  And it was a company that 
bumped into the wave was that was displacing traditional newspapers and 
magazines and advertisers and telephone companies and Microsoft and 
television.   So it was just a company that impacted so many different 
realms of the media.  

	So I thought it would be fun to tell the Google story and then tell in 
the narrative of the Google story how the traditional media world woke up 
to realize, oh, my god, these guys are eating our lunch.  

	CHARLIE ROSE:  But you say "these guys." As always, it’s a study of 
personalities.  

	KEN AULETTA:  It is a study of personalities, but it is also a study 
of what engineers.  And engineers are people who start from an assumption, 
as the two founders of Google did.  The assumption is that the as exists, 
the traditional analog media world is inefficient.  

	It is inefficient to buy ads and not know who is actually buying 
products because of your ads or who the people are who are actually paying 
attention to your ads and have an impact on them.  

	It’s inefficient to cut down trees and have trucks belching pollution 
and delivering newspapers.  

	So that’s the assumption they start with.

	And then engineers starts with had a question, which is why.  Why does 
it have to be this way?  Why can’t we public newspapers online much more 
cheaply?  Why can’t we do ads and know who’s actually buying our products?  
Why can’t we have free operating systems for our telephones, which is the 
Android system you mentioned in your introduction? 

	Why do we have to buy packaged software from Microsoft when we can get 
it for free or much cheaper in a cloud computing through Google?  

	So why, why, why was the question they asked.  

	CHARLIE ROSE:  They asked that question?  

	KEN AULETTA:  The engineers -- the two founders of Google, starting 
with them, and then joined by Eric Schmidt, the CEO, who joined three years 
ago... 

	CHARLIE ROSE:  They are computer scientists.  

	KEN AULETTA:  And they’re all engineers, and 50 percent of the 
employees are engineers, and those engineers get 20 percent of their time 
to work on any project of their choice.

	So they have this sense of liberation that they are going to go out 
and push the envelope in all these different areas.

	CHARLIE ROSE:  Have they remained engineers or are they now 
businessmen?  

	KEN AULETTA:  They’re much more engineers.  

	One of the things that I thought a lot about as I report in this book, 
because in ‘98 and’99 I did a book Microsoft and the Microsoft trial, and 
when I was interviewing Gates and the people who worked there, you realize 
that Microsoft at the time in the late ‘90s, they were cold businessmen.  
They were out to destroy Netscape, they were out to destroy Sun 
Microsystems.  

	The Google guys are not cold businessmen, they’re cold engineers.  And 
the difference is they’re not out to destroy people.  They’re out to make 
things efficient.  But in the process of making it more efficient they 
ultimately weaken traditional media.  

	CHARLIE ROSE:  But Larry points out that he realized that he had to 
build a company in order to have the kind of leverage that he wanted to 
push out ideas he believed in.  

	KEN AULETTA:  He is a young man -- they’re not great readers, but as a 
young man Larry Page growing up in Michigan read a book about Nicolai 
Tesla.  And Tesla was the guy who arguably really invented electric, not 
Thomas Edison.

	But Tesla was a very generous man and he shared everything, and he 
died destitute and bitter that Thomas Edison got all the credit and all the 
riches and he got nothing.

	And Larry Page took from that a lesson that you have to keep your 
secrets close.  You don’t share the algorithm of Google.  And you need to 
create a powerful business in order to protect and advance those secrets.

	CHARLIE ROSE:  The Internet has given us the information.  Google has 
given us what?

	KEN AULETTA:  First of all, it has given us access to the information.  
It’s provided a navigation system for that information.  I as a writer or 
you or someone as a student, my nephew is a student, or anyone in a third-
world country that can’t afford classrooms, can go on Google and have 
access at their fingertips to the world’s information.

	And with digitized books, they’re expanding the world’s information.  

	So Google as a service, just in terms of knowledge and information and 
access to it, it basically helps you navigate the web, which was 
unnavigable.  

	CHARLIE ROSE:  And they want to digitize all the world’s books.  

	KEN AULETTA:  The 20 million of them.  

	CHARLIE ROSE:  And give us access to all of them.  

	KEN AULETTA:  Yes.  In the process though -- here’s where the reality, 
or the rubber hits the road.  Larry Page sits in his office in 2002 and 
Eric Schmidt wanders in, and he sees this Lego set.  And he says, "Larry, 
what are you doing?"  And he says, "Well, I’m building a Lego set.  We’re 
going to digitize all the books in the world."

	He says, "Larry, how are you going to do that?"  And he said "We’ll 
just go to libraries.  We’ll go to the University of Michigan where I went 
to school and we will just digitize it."

	And they actually got Al Gore involved to help them talk to the 
Library of Congress.  But they went to the libraries.  But what they didn’t 
go to for the permission was the copywriters.  They didn’t go to the 
publishers, they didn’t go to the authors.


	So here they are announcing this program, they’re going to digitize 
the world’s books.  Great.  You’re going to digitize my book without 
compensating me?  You don’t own my copyright.  I do.

	So they got into this war with publishers and with authors, and they 
had a lawsuit.

	CHARLIE ROSE:  And where does that stand now.

	KEN AULETTA:  The settled it in 2006, and Google agreed to pay $120 
million.  And everyone seemed to be happy.  But now it’s in the courts, and 
next week it is going to come up in a hearing in the federal court, and 
there are lots of people objecting -- and the basic objection is that it’s 
too much concentration of power in Google’s hands.  

	They will be the only ones with all the digital copies of all the 
books ever published, 20 million.  And that kind of power scares people.  

	Engineers, as I learned with Bill Gates in the late 90s, are brilliant 
at many things, but they’re not brilliant at anticipating or understanding 
people’s fears.  People fear Google the way they once feared Microsoft.  

	Google engineers are not particularly sensitive to that, and they are 
going to be forced to be, because governments all over the world are 
raising questions.  

	CHARLIE ROSE:  They want to be a $100 billion in revenue company.  

	KEN AULETTA:  That’s what Eric Schmidt said to me, but he didn’t say 
it in.  He said we want to be the first $100 billion media company.  So 
Google no longer calls itself a search company.  It’s a media company.  
They’re in the advertising business.  They are in the telephone business.  
with YouTube they are in the TV business. 

	The are in the book business with digitized books, they are in the 
software business with Cloud Computing.  So they are in everybody’s 
business.  

	CHARLIE ROSE:  You mentioned Larry Page.  Tell us about his background 
and how he came to Stanford and met Sergey Brin.  

	KEN AULETTA:  Larry grew up in Michigan.  His father was a professor, 
his mother was a scientist.  Sergey grew up in the former Soviet Union.  
His parents were both scientists.  And they were Jews and felt 
discriminated against.  They came to Maryland.  His father teaches and 
taught and still does.

	CHARLIE ROSE:  His father was restricted as to what he could be.  And 
he wanted to be an astrophysicist.  

	KEN AULETTA:  Right.  And they wouldn’t let him near the nuclear 
program or the vital space programs, et cetera.

	And so they fled, and with help they came here.  Larry’s father was 
very successful and divorced his mother when he was fairly young, and then 
his father died when Larry was relatively young.

	And what happened was Larry decides to go to Stanford for graduate 
school after graduating from Engineering University of Michigan.  Sergey 
started two years before.  He skipped several grades from the University of 
Maryland and goes to Stanford.

	They meet in orientation.  Sergey is taking Larry and a group of other 
people around San Francisco during orientation at Stanford.  And they meet, 
and they start fighting.  And... 

	CHARLIE ROSE:  Fighting over ideas?  Fighting over what?  

	KEN AULETTA:  Everything.  Just ideas -- "What do you mean you like 
that kind of food?"  Whatever the discussion was, they were oil and water.

	And they wound up becoming inseparable and great buddies.  And Larry 
had this idea for a search engine.  Sergey had this great math skill.  And 
they married the two skills together, and they created Google at Stanford.

	And they were so successful at Stanford in their dorm room, Google was 
running, but it was running on the Stanford computer system, the system 
crashed it was so overloaded with traffic with Google search.

	So Stanford professors say it’s time for you young men to either sell 
or... 

	CHARLIE ROSE:  And they had help and mentors from Stanford.  

	KEN AULETTA:  They had great mentors.  Professor Mudwani (ph) and 
Terry Winagrad (ph) were their mentors, each of theirs, at Stanford, and 
who actually became consultants and themselves became very successful. 

	One of the things you find is that a lot of Stanford professors are 
very wealthy because a lot of their students, -- and Stanford is very 
wealthy because a lot of their students -- Stanford owns about one 
percentage of Google.  They own a percentage of Yahoo!

	And why not?  They incubated these ideas in these students.  

	So they went on and they went to a garage in Menlo Park in 1998.  In 
‘98 I was interviewing Bill Gates for that Microsoft book.  And I said to 
him one day, "So, Mr. Gates, when you think about the future, what are you 
worried about?" 

	And I expected him to say "I worry about Netscape or Apple or Oracle" 
or some company.  Instead he rocked gently back and forth in his chair, and 
he said "I worry about someone in their garage inventing something that 
going to displace Microsoft.  

	In 1998 two guys were in a garage, Larry Page and Sergey Brin.  And 
today they are the greatest menace that Microsoft has ever faced. 

	CHARLIE ROSE:  But they didn’t see it in the beginning, did they?  

	KEN AULETTA:  No, most people don’t.  And that was Gates smart point.  
He said "You don’t know what the new technology might be, but that’s what 
you worry about in you’re in my position at Microsoft."  

	CHARLIE ROSE:  Sergey also was a great fan of Richard Feynman, who was 
a great physicist.  

	KEN AULETTA:  Sergey’s not a great reader.  Larry actually reads more 
and has read more than Sergey.  But he read a biography of Feynman early on 
in his life.

	And he has a couple of heroes in his life.  One is Feynman, and the 
other is actually Steve Jobs.  They both admire Steve Jobs, and one of the 
things they admire about is his passion, and another thing they admire 
about his is the way he simplifies everything , the elegant designs of 
Apple and how simple it is.

	And if you thing about Google search, that simple search box, no ads 
allowed to clutter that page, you see in part the influence of a Steve 
Jobs.  

	CHARLIE ROSE:  And when people talk to you about comparing Sergey and 
Larry and Steve Jobs, what do they say?  

	KEN AULETTA:  One of the smart things that former Vice President Gore, 
who is on the board of Apple and is very close to Steve jobs and is a close 
adviser to Google over the years, said to me, these are brilliant guys.  

	He said the difference between the Google guys and Steve Jobs is that 
Steve had a great setback in his life when he lost control of Apple in ‘97.  
And from that -- or actually earlier than ‘97.  It was ‘85.  He came back 
in ‘97.

	And he said that experience of loss, that punch in the nose gave him 
an experience and a sense of humility, and it prepared him better for the 
battles ahead.

	And Larry and Sergey at 35 years old have not experienced failure.  
And that’s a worry, that they lack the experience.  

	So they lack a number of things.  They’re brilliant engineers, and 
they really are very good at what they do.  But they haven’t experienced 
failure, and they’re not very intuitive, or, as Sergey said to me, we lack 
a certain emotional intelligence to understand, and it’s one of the reasons 
they’re behind the ball with the government.  

	CHARLIE ROSE:  They also included in their philosophy, in their 
culture, this idea of "Don’t be Evil."  

	KEN AULETTA:  What it means is they had -- every company talks about, 
let’s create a mission statement, and they all do.  And that’s what Google 
went through.  They set up a team of 10 people and they met all day and 
let’s come up with a mission statement.

	And they came up with all these ideas they wrote on the white board, 
and nothing resonated.  And finally Paul Kite is sitting in the room, and 
Paul says, look, let’s cut all this crap out.  Let’s just say "Don’t be 
Evil."  And everybody says "That’s I!  Don’t be evil.  That’s our slogan."  

	So one of the engineers in the room went around the campus in very 
neat handwriting and wrote "Don’t be Evil" everywhere around the campus, 
and it became their slogan, which they liked.  And it fit with their sense 
of idealism about themselves.  They really believed in their own innocence, 
what we do is good.  We’re advancing the world’s cause.  

	CHARLIE ROSE:  They had to introduce a new element, which was a 
manager.  Were they opened to that idea?  Did they recognize it?  And how 
has that worked out having Eric Schmidt come in?  

	KEN AULETTA:  It’s worked out brilliantly for them.  He’s a grown up.  

	CHARLIE ROSE:  And they are what?  

	(LAUGHTER)

	KEN AULETTA:  They’re not always grown up.  

	(LAUGHTER)

	What happened was in ‘98 and ‘99 two venture capitalists put a total 
of $25 million into Google.  Google was building traffic, and they said, 
build it, and they will come.  But the users were coming but the money 
wasn’t coming.  They had no way to monetize Google.  

	CHARLIE ROSE:  They hadn’t thought about advertising at that time?  

	KEN AULETTA:  No.  And they actually rejected -- there was an idea, 
Visa at one point said we’ll pay $3 million to put an ad on your homepage.  
They said, no, we don’t want that.  That intrudes.  We want to build user 
trust.  

	They were brilliant about this.  For young guys to have the clarity of 
thought to say what’s most important is we build user trust was brilliant.

	CHARLIE ROSE:  But that’s a conflict now between advertising and 
users.
	
	KEN AULETTA:  Yes, but then what happened...  

	CHARLIE ROSE:  Where their loyalties might be in the future.  

	KEN AULETTA:  That’s a future issue.  But what happened, by 2001, the 
venture capitalists are starting to get antsy, and they are saying we need 
a professional manager here.  And they said, we’ll do it, and they’re 
humoring them.

       (LAUGHTER)
       
       So they’re interviewing all these people, all of whom they whisper 
"What a jerk."
       
       CHARLIE ROSE:  "Why do we need him, or her?"
       
       KEN AULETTA:  That’s a suit.  We don’t need them.
       
       So then John Door suggests -- Eric Schmidt is at Novell, he had been 
at Sun, he was a COO at Novell, he’s going to be leaving.  He’d be perfect.
       
       So they said "We’ll interview him."  So they interviewed him and 
they wind up arguing about some engineering problem for an hour.  Eric came 
away saying "This is the most stimulating meeting I have had in a long 
time.  I loved it".  
       
       But one of the things that happened at that meeting is that Eric 
comes in this suit, and these guys wore t-shirts, and somehow Burning Man 
came up, that retreat at the end of the summer where everyone hugs and 
there’s art and music and it’s a real communal experience everyone has.  
And somehow it came up that the founders went to Burning Man every year, 
and they found out that Eric did.  And they could believe it, but they 
loved that.
       
       So here he was.  He wasn’t really a suit if he went to Burning Man, 
and he was a PhD and an engineer like us, and he really knew this business, 
and we kind of like him and he has an understated way.
       
       So what happened was they hired.  And Eric fills out a troika and 
they agree that on major decisions -- it a very odd management system, 
because on major decisions the three of them have to agree.
       
       But they went through some tempestuous periods, but they’ve 
adjusted.  

	CHARLIE ROSE:  Fighting over what.  

	KEN AULETTA:  Well, it’s my baby, the founders said, and give me that 
back.  I want it, you can’t take it, just a normal human kind of thing.
 
	CHARLIE ROSE:  But he does have a certain order and accountability and 
decision-making.  

	KEN AULETTA:  He’s a good manager.  

	He came in, and I describe the story in the book, and everyone shares 
offices.  Sergey and Larry Page, the two founders share an office at 
Google, so most people share an office.  It’s not plush.  It’s all open and 
glass.

	And so Eric Schmidt is assigned an office, and then someone sees 
there’s an empty chair.  So one of the engineers squats and becomes a 
squatter in the office.

	And Eric instead of pulling rank and saying I’m the new CEO, this is 
my office.

	CHARLIE ROSE:  Lets him sit.

	KEN AULETTA:  Lets him sit.  And so the guy finally leaves.

	And that kind of story gets around and it makes people comfortable.  

	CHARLIE ROSE:  All right, what was the breakthrough for them?  

	KEN AULETTA:  In ‘01, late ‘01, they came up with Ad Words, which is a 
program -- when you do a Google search you see that box, that gray box on 
the right hand side of the screen.

	And if you’re me you don’t pay much attention to the gray box.  The 
truth is that gray box and another program that they invented a year later, 
which was called ad-sess (ph), those two programs now generate $21 billion 
in advertising dollars.  

	To put that in context, $21 billion in advertising is roughly 
equivalent to all the magazine advertising and all the consumer magazines 
in the United States and is equivalent to two-thirds of all the advertising 
in all the newspapers in the United States.

	So $21 billion is a lot of money.  The total revenue for the company 
is $22 billion, but $21 billion is advertising dollars.  So they built this 
company based and these little tiny ads, mostly.  

	CHARLIE ROSE:  But my impression is they caught the attention of the 
country that these are big players when all of a sudden they went public 
and had this huge public offering, and then they were able to buy YouTube 
as almost a passing thought.  We’ll spend $1.3 billion for YouTube, and all 
of a sudden people woke up and said, these people are ambition.  

	KEN AULETTA:  You’re absolutely right, Charlie.  

	Before 2004, no one knew whether Google was making money or what kind 
of revenue they were generating.  It was a private company.  They had to go 
public in 2004.

	And when they went public and people particularly in traditional media 
saw, oh, my god, this is a dynamic company.  And not only that, but if you 
read the IPO Google put out, it was a company with broad ambitions which 
they expressed in there.  They wanted to become a media company.

	And so part of the drama or tension in my book, the story I try to 
tell in my book, is as you tell the Google story as various point, 
particularly starting in 2004, people wake up and discover, they’re coming 
at me.  

	(LAUGHTER)

	CHARLIE ROSE:  Including Microsoft, and Microsoft famously in the 
presence of Steve Palmer said they are a one-trick pony.  

	KEN AULETTA:  And Eric Schmidt retorted to me, it’s a pretty good 
trick.

	(LAUGHTER)

	CHARLIE ROSE:  Meaning the search engine which generates 90 percent of 
the revenue, or whatever.  

	KEN AULETTA:  It’s actually more.  It’s probably 97 percent of it’s 
revenue.  It’s a growing search, still growing, but it’s growth is slow.  
So a challenge for Google in the future is where is the growth’s going to 
come, and that’s partly what Palmer means.  

	CHARLIE ROSE:  So they went through the economic recession.  What 
impact did it have on them, this gargantuan company?  

	KEN AULETTA:  It compelled Google to grow up and start managing in a 
way they failed to before, to begin to cut costs for the first time.  

	For instance, they found out the CFO, the chief financial officer told 
me, we had 150 snacks here, and we’re offering all these elaborate meals, 
and a third of the food was getting thrown out.  

	So they start looking at what’s thrown out and maybe we shouldn’t be 
offering that.  Maybe we should cut down on snacks.  Maybe we’ll stop the 
growth -- when I started this book reporting in ‘07, they were hiring -- in 
late ‘06, actually, they were hiring about 150 people a week, a week.  And 
now they’re not.  So they slowed down.

	CHARLIE ROSE:  They were hiring them personally for a long time.  
We’re they doing the interviews themselves?

	KEN AULETTA:  Actually, they were a bit slow.  They were insisting for 
any engineer to review their resume.  And not only that, but they wanted to 
their SAT scores.  

	CHARLIE ROSE:  What do the people who invested in Google worry about?  

	KEN AULETTA:  The things people worry about with Google, a, what will 
happen with the founders?  Will they get dispirited and feel like they want 
to leave or feel like they want smell the roses?

	CHARLIE ROSE:  Climb mountain or do whatever they want.

	KEN AULETTA:  Yes.  And, a, families now.  Sergey has a child and 
Larry’s about to have a child.  

	Then they worry about search competition.  Not just being in 
Microsoft, which is pouring money in but its market share has not grown 
exponentially yet, but it’s a good search engine.

	But they worry about what’s called vertical search, and that is say 
what happens if Facebook and Twitter decide to do search and instead of 
doing a search for a new camera and getting 10,000 possible answers from 
Google, what if you tweaked or post something for your friends on Facebook 
or Twitter and you get back ten great answers from people, well, I bought 
the camera last week, it’s great.  You trust much more your friends take on 
it than you would somebody else.

	CHARLIE ROSE:  Do you think this idea has legs?  

	KEN AULETTA:  Sure.  It’s one of the reasons Google last spring wanted 
to buy Twitter.  It’s one of the things they worry about.

	CHARLIE ROSE:  And why didn’t that happen?  

	KEN AULETTA:  Twitter wasn’t ready to sell.

	CHARLIE ROSE:  The Twitter people weren’t ready to sell?  

	KEN AULETTA:  In fact, they’ve got more funding.  They think they can 
build a bigger company.  

	CHARLIE ROSE:  And what about something that always happens to an 
entrepreneur company, people begin to leave because they see, especially if 
the founders are young, there’s no way to the top.  

	KEN AULETTA:  Not only no way to the top, but if you come in after 
2004 when the company went public, you didn’t make the killing that those 
other people did.  You have masseuses who have retired.  

	(LAUGHTER)

	But you didn’t make a killing.  So then people come along and say 
Facebook or Twitter, they could be the next Google.  You’re a talent 
engineer and you join that, and the idea is not only do you have more 
responsibility in the new company but maybe you can make a financial 
killing.  

	CHARLIE ROSE:  Do they worry about Microsoft and Bing and its 
relationship to Yahoo!?  

	KEN AULETTA:  Of course.

	CHARLIE ROSE:  How much do they worry, then?

	KEN AULETTA:  I don’t think they lose a lot of sleep yet.  

	CHARLIE ROSE:  Because they think their software is better.  

	KEN AULETTA:  The respect Bing and what Microsoft has done there, and 
they fear the combination of yahoo and Microsoft.

	But the basic attitude at Google is that Microsoft is an old company 
and they don’t have -- they won’t move with the swiftness that we will, and 
they don’t have the hunger that we have.  Whether that’s true or not... 

	CHARLIE ROSE:  Do they still have the hunger?  

	KEN AULETTA:  That’s a basic question.  Larry and Sergey each have 
757s.

	CHARLIE ROSE:  These are airplanes, aren’t they?

	KEN AULETTA:  And they go for weekends to Africa to stake photographs.  
Larry flies his helicopter and Sergey is building a sailboat.

	They’ve worked very hard and it’s very natural as human beings with 
families now that they want to smell the roses.  

	CHARLIE ROSE:  You make the argument they may be doing too many 
things.  

	KEN AULETTA:  The analogy is of a kid in a candy store with unlimited 
pennies, and you can’t buy things in a candy store for pennies anymore, but 
in the old days you could, and you don’t make choices, you want everything.  

	CHARLIE ROSE:  Or a kid with an Amex card.

	KEN AULETTA:  And Google has done that.  And now because of the 
recession they were compelled to take away the Amex card and to be a little 
more rigorous.

	And so they’ve introduced management systems and they’re more 
rigorous, and they’ve came out of the recession quite well and are still 
growing.  They’re doing quite nicely.  Google is not a troubled company.

	But you ask what are the issues or questions about the future.  Those 
are some of them.  

	And another one is hubris.

	CHARLIE ROSE:  Exactly, I was coming right to that -- arrogance.  

	KEN AULETTA:  It’s very hard -- when you are that successful and you 
believe that you are idealistic and you are not doing evil, it’s very 
natural that you would seduce yourself to believe how can someone question 
my motives? 

	But if you go back as I did and interview Bill Gates of Microsoft in 
‘98 and’99, as I did, they had the same attitude, how can anyone question?  
Bill Gates thought the was expanding the operating system for everybody.  

	CHARLIE ROSE:  A computer in every house and every business.  

	KEN AULETTA:  And he was doing wonderfully.  He couldn’t believe that 
his government was questioning his motives.  

	A lot of business interests have joined up to say this company has too 
much power and it really scares us, and they’re pressuring the government 
to do something.

	And even though the Google people think they have great relationships, 
which they do, with the Obama administration.

	CHARLIE ROSE:  Christine Varney has...

	KEN AULETTA:  The head of the antitrust division has raised questions.  
She has said we’re going to look at all concentrations of power.

	And you forget at your peril that Democrats unlike -- more than 
Republicans -- believe in regulation.  

	CHARLIE ROSE:  So the argument would be that they own too much of the 
search market or will the argument be something else?  

	KEN AULETTA:  The argument would be too much of the search market, 70 
percent of the world and about two-thirds in the U.S. of the search market.

	But the worry is that they then dominate the advertisers, and by 
dominating the advertising, the advertisers worry they’ll control the 
pricing and be able to jack it up.

	In the book publishing business they worry that if Google is the only 
one who digitizes all the books, they say they will give it away for free 
now, but what if they start charging?  What if they decide to start 
charging libraries?  So that power, the worry is that ultimately it will be 
abused.  

	Larry and Sergey are idealistic people, what happens ten years if 
they’re not there, the next generation.  And what about, you mentioned this 
earlier, what happens with privacy when you start getting pressures from 
advertisers who say every time you do a Google search we know, Mr. Google, 
that you have a footprint of everything that person has done, what they’ve 
read.

	CHARLIE ROSE:  And they acknowledge that.

	KEN AULETTA:  Of course they do.  That’s what cookies are.  They’re 
called cookies.  You leave a fingerprint everything you do, everything you 
buy, everything you’ve read.  They don’t know your name but they know a lot 
about you.  And it’s one of the things that advertisers love about Google 
is they have that information.

	But as Google’s search begins to slow, as it has, and advertisers want 
more, advertiser are going to have to go to Google and say "We need more 
data.  We want more information." 

	And then there’s things like technology called behavioral advertising 
where you can look at people’s eyes and find out what ads they like and 
find out what people are feeling.  And you can get the access and 
information through Google, through your cable box, by the way.
	
	And advertisers will be pressuring them and the phone companies for 
more data, and that raises real privacy issues, too.  

	CHARLIE ROSE:  Part of the issue that you raise in this book which is 
fascinating which we will do I hope in a second conversation is the old 
media did not see it coming and even to this day do not know what to do, 
and they’re searching for a new business model.  

	KEN AULETTA:  They didn’t search hard enough.  They were late, as you 
said.  

	Just think about the music companies.  The music companies, instead of 
saying we have to break our model of only selling CD albums, why didn’t do 
what Apple did with iTunes and sell individual songs?

	The thing about the newspaper -- yes, the newspapers set up online 
newspapers, but did they pour the energies to realize the Internet is a 
different model than your newspaper?  

	In fact what they did is they put the editor of the newspaper in 
charge of the online paper and they said you can’t break any stories until 
the paper breaks it the next morning.  That’s insane.

	The way the digital world works is different and they were laggard.  
And I found after two and a half years of reporting, I worry about 
journalism and I worry what happens to newspapers, and there are a lot of 
issues that are worrisome to the future.

	But I found myself being more impatient with the traditional media 
guys for failing to recognize how the world had changed.  And there are two 
types of people, Charlie, the people who lean back and oh, woe is me and 
complain, and the people who lean forward and say what the hell do I do to 
seize the day?  They didn’t seize the day.  

	CHARLIE ROSE:  This is a great book.  Thank you very much.  You set 
out to talk with the digital revolution and you talk about a company that’s 
had profound influence and it continues to.  I hope you’ll come back.  

	KEN AULETTA:  Glad to.
	
	CHARLIE ROSE:  Ken Auletta, the book is called "Google: the End of 
World as we know it."