Google CEO Eric Schmidt

Last week Google CEO Eric Schmidt was interviewed by CNBC’s Jim Cramer (Mad Money). Terry Heaton provides an insightful summary of special interest to local media companies:

“He said the company gives up billions in revenue by keeping ads off the home page. Why? Because it would upset users. “We prioritize the end user over the advertiser,” he told Cramer. This simple statement — if truly adopted by media companies — would revolutionize all of online media. We’d have a race to see who could better serve the wants and needs of the people formerly known as the audience, and that would be a refreshing change from words like capture, drive, and my favorite, monetize.

Google doesn’t provide any guidance whatsoever to stock analysts, and Schmidt’s answer, again, is profoundly simple when he says it would “get in the way” of running the business, adding, “If we started giving quarterly guidance, all of a sudden the whole company would start focusing on the quarter rather than trying to change the world.”

On the company’s heretofore unsuccessful attempts to make money from YouTube, Schmidt said it didn’t matter, at least not right now. He said they make plenty of money already, because YouTube places users in the stream of Google’s other businesses, and that cannot be overlooked. “I’d be worried if people weren’t using to YouTube,” he told Cramer. “Since it’s an enormous success globally, we know we will eventually benefit from it.”

If you’re in the advertising business, you should watch this interview. (Part one, part two, part three)

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