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Google's priority: Make some money, somehow - April 30, 2008

It's a good thing Google makes so much money from its core business of placing text ads next to search results, because it's still searching for the special sauce on its other big initiatives. Google CEO Eric Schmidt told CNBC's Maria Bartiromo in an interview that aired today (transcript) that the company groping for ways to monetize the enormous traffic and reach of YouTube (although it has a new, secret plan that will roll out later this year), and for a working advertising model for social networks.

On YouTube: We're beginning to see glimpses of significant professional
content on YouTube. People are using it--because there's such a large reach,
they're learning how to reach that audience. We're working but have not yet
in my view gotten a breakthrough around monetization. So while we have lots
and lots of traffic and we have lots and lots of interesting and creative
people and all sorts of controversies--we're blocked in countries, so on and
so on--I don't think we've quite figured out the perfect solution of how to
make money, and we're working on that. That's our highest priority this year.

On Social Networks: We have pointed out, and I'll repeat again, that the whole social networking space has been harder for us to monetize--that is, develop advertising businesses again--than some of the other--than some of the other spaces that we're in. It has to do what people are doing. When you think about it, you're in a social network, you're looking at people's photos, you're figuring out where your friends are. You're not as likely to be purchasing a new car at the same time or purchasing clothes or purchasing a book or what have--whatever business that you're in. So the development of the advertising tools and techniques, literally the platform, has been more difficult than we have thought. But we're working on it, and we're hopeful.

Nice luxury to have.

Oh, and he still hates Microsoft:

We've primarily been concerned about the possibility of a Microsoft acquisition of Yahoo! because of Microsoft's history and because of the assets that Yahoo! has are quite valuable. And we actually think that in the wrong hands, they could be used in the wrong way.

The "wrong" hands?

Video of the interview is available in three parts, here, here and here.
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