Eric Schmidt in conversation with Ken Auletta

Writer and New Yorker columnist Ken Auletta is interviewing Google Chairman and CEO Eric Schmidt in San Francisco as part a program from the Newhouse School, The New Yorker and Conde Nast. Following are some highlights:

The goal of the company is not to monetize everything. Our goal is to change the world. Monetization is a technology to pay for it.

Google's ambition is to solve big problems that impact a lot of people.

Privacy at the end of the day is how you feel about your privacy. People feel ok with ads about what you are doing but not about who you are. Privacy will be an evergreen issue.

Frankly, the free service model with free advertising is still the best model.

The goal for YouTube is to build a tremendous community....In the case of YouTube we might be wrong. We have enough leverage that we have the leverage of time. We can invest for scale and not have to make money right now, he said. Hopefully our system and judgment is good enough if something is not going to pay out, we can change it.

Hopefully in the next year we will come up with some new inventions.

How to allay concern about being a competitor to partners?: There is a sea change from one model to another. Google happens to be the messenger. People are reading less print newspapers and magazines. People are consuming more on digital networks and paying less in ad rates. What we don't know or haven't solved it to come up with on line ad products that monetize as same rate as offline. If we invent that a lot of those concerns go away.

There is a tremendous amount of use of social networks...the traffic is phenomenal...and there will be advertising products in that context...it's taken longer for the industry to find those devices but they are clearly there.

Our primary success was in the direct marketing piece that is quite measurable and tactical. The mobile case is just an extension of that. As mobile devices get more powerful you can do click to play ads. Mobile devices will be able to do powerful narratives...cameras, GPS...it will tell you need new pants.

The most impressive products are those that use artificial intelligence that I cannot imagine are doable. Automatic language translation by computers...we will eventually do 100 languages. Another example, I am very excited about is geo-positioning.

We think independent Yahoo is better for competition.

What does Schmidt worry about? At our scale and position the problems are set from within. It's not a competitor's move that screws things up. Because of our market position and success we can define ourselves as we move forward. The great companies can overcome barriers...almost always determined by internal factors. Replicating the Google culture across 20,000 people is a challenge.

I worry a great deal that the Google model is set, that it can scale.

We try to focus on the future...internally we do talk about strategy and innovation..not about competitors. It's much better to look forward to the kinds of things we can do. Media coverage is all obsessed about winners and losers. In fact what is really important about technology is you have the opportunity to redefine the game over and over...and the winner redefines the game.

Google is not different than the success of companies 30 years previously. The difference is it all happened quicker. It all happens in six months, not six years. At Sun we had two-year product roadmaps...at Google we have trouble doing six-month roadmaps.

The compression of time occurs because there are so many more actors. The industrialization of 2 billion players coming online...we have to listen to them.

Q&A session:

The combination of DoubleClick and the Google's ad platform will create a single exchange and platform for publishers that over time will begin to generate significant revenue to the New York Times and other competitors. Yahoo is the leader in display advertising (online).

A lot of the world is organized around the lack of information and trying to prevent people from knowing what is going on.

We get between 15 and 30 million photos uploaded every day...and they are about people..they have a tremendous value to open societies and are a threat to closed societies...you will getter better governance with more transparency.

"Don't be evil" is misunderstood. We don't have an evil meter...the rule allows for conversation. I thought when I joined the company this was crap...it must be a joke. I was sitting in a room in first six months ...talking about some advertising...and someone said that it is evil. It stopped the product. It's a cultural rule, a way of forcing the conversation especially in areas that are ambiguous.