Washington Post Shows Google and Schmidt Don't "Get It"

So, Mr. Schmidt goes to Washington to testify before the Senate Antitrust subcommittee, and the bipartisan panel that called the hearing might get the sense that Google is responsive to the concerns, right?

In his opening testimony, Google Chairman Eric Schmidt said, “We get it. By that, I mean we get the lessons of our corporate predecessors. We also get that it’s natural for you to have questions about our business and that’s certainly fine.”

So, it must not have come as a surprise to members and staff of the Senate Antitrust subcommittee, that he did an about-face in a Washington Post interview on Oct. 1, when asked about his “reflections on the experience”:

“So we get hauled in front of the Congress for developing a product that’s free, that serves a billion people. Okay? I mean, I don’t know how to say it any clearer. I mean, it’s fine. It’s their job. But it’s not like we raised prices. We could lower prices from free to…lower than free? You see what I’m saying?”

Last time the members of FairSearch.org checked, some of whom are among the biggest spenders on advertising with Google, the company did not collect $29.32 billion in revenue in 2010 with a “free” product (worth noting that’s a 24 percent increase in revenue over 2009 – and Google’s year-over-year growth rate has only increased in both Q1 and Q2 of 2011).

In other words, Google isn’t free at all. Based on Schmidt’s own testimony, Google collected $29.32 in 2010 for each of the 1 billion people Google claims receives its services for “free.” If you use Google, chances are you’re paying a hidden tax to the company for its dominance and abuse of that market power to limit competition and boost its own ad sales. Google’s customers – advertisers – pay a big price to Google.

Asked by the Washington Post’s Lillian Cunningham, “What’s the answer?” Schmidt responds:

“It’s not an answer, it’s a journey. If it were an answer, then after we had done our thing and told everyone to leave us alone, they would have left us alone. That’s not how Washington works. That’s not how government works. It’s naïve, on our part.”

Schmidt, ever the “friend” of small business (unless that is, you’re Yelp, Nextag or TripAdvisor or another innovative business that competes with Google for eyeballs), uncorked this ironic gem in the Washington Post interview as well:

“So when you go and you spend time with the little companies, they have no concept of why they would want to go to Washington… It’s so foreign because when you’re in that zone, you’re busy inventing something that’s so obvious [that you think] everyone will love it and there’s no scenario where the government will prevent you from doing that.”

Or, that if you build a great service, Google will undercut you at every turn, scraping your content, using it to build an audience for its own service to keep users from going to your site, and then downplay that tactic in testimony before a Senate panel.

Despite pleas to the contrary, Schmidt and Google, just don’t ”get it.”