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Google is 'on the right side of history,' says Eric Schmidt

The Big G's executive chairman has responded to recent controversy over privacy and taxation.

Google Executive Chairman Eric Schmidt earlier this year. Christian Marquardt/Getty Images

Google Executive Chairman Eric Schmidt has responded to recent controversy by asserting that, "as long as we're on the right side of producing value for citizens of the world we're on the right side of history."

Even with controversy over privacy and taxation fresh in mind, Schmidt believes that the Big G does "sufficiently unusual things, like the China decision [which saw the company withdrawing from China rather than censor search results], for you to form your own opinion."

Schmidt is in Europe to talk about online privacy at a series of conferences in which experts discuss the " right to be forgotten." Google is at the heart of a debate over privacy sparked by an EU ruling that people can request to have links removed from Google's search results if those links point to articles that contain out-of-date information, or details that might harm that person's privacy or reputation.

Google has also been under fire in Europe alongside Apple and other giant multinational companies taking advantage of the relaxed tax situation in Ireland, which will change next year as the government closes the so-called .

Schmidt explains how Google's famous motto, "Don't be evil" began internally as employees discussed possible developments, but it has since been "used externally to hold Google to a higher standard."

'Banks were cheap'

Schmidt also described how Google considered getting into the financial services sector during the recent economic crisis "when banks were cheap". But having joked among themselves about creating Googlebucks, Schmidt says he and Page and Brin deliberately decided against it.

But Schmidt did hint that Google could go in new and disruptive directions. "We don't wish to be constrained as just ads and search", he said. "We have a division called Google X, which is developing new and amazing innovations -- and in fact they may disrupt other industries."

Exile the knaves

Schmidt made the comments at an event organised by UK newspaper The Financial Times, where he and former Googleboss Jonathan Rosenberg discussed their new book, "How Google Works," published in September.

The pair chatted about the culture shock they faced when bringing their staid business practices to Google in its early days back in 2001. They quickly realised they couldn't tell the startup's "thinking creatives" what to do, but they could control the environment, especially when they realised small engineering groups were counterproductive. Rosenberg describes his credo as "Exile the knaves and fight for the divas" -- in other words, get rid of the people who disrupt the environment, but look out for those who, despite being hard to control, could create great things.

Other mottos include "Revenue solves all known problems" and "Don't run out of cash."

Not a normal company

Schmidt recalls "the moment I discovered I wasn't in a normal company." Early in his time at Google he discussed a review of engineering performance with founders Larry Page and Sergey Brin. "I looked at it and said that makes sense to me, but then Larry and Sergey looked at it and said, 'None of this is true.'" In fact, Page and Brin had been keeping an eye on what people were doing on an ongoing basis and so concluded that the company's managers didn't know what was going on. Their solution? Get rid of all the managers.

Known as "the disorg," this process found the managers roles that suited them better, leaving Google with with just one manager in charge of 120 people...a number big enough so that he couldn't wind up micromanaging each individual.

The company quickly found that with no management but a clear strategy, people would self-manage. One result was a new algorithm that fixed irrelevant ads showing up in search results -- developed not by the ads team but by a few engineers figuring it out "when they had nothing to do one weekend."