Google’s Schmidt Says He ‘Screwed Up’ in Social Networking

June 01, 2011, 6:48 PM EDT By Joseph Galante and Brett Pulley

(Updates share prices in second-to-last paragraph.)

June 1 (Bloomberg) -- Google Inc. Executive Chairman Eric Schmidt said he “screwed up” in the area of social networking when he was chief executive officer of the world’s largest Web- search provider.

“I clearly knew I had to do something and I failed to do it,” Schmidt said yesterday of his efforts to help the company excel in social media. “The CEO should take responsibility. I screwed up.” He was speaking at AllThingsD’s D9 Conference in Rancho Palos Verdes, California.

Google faces accelerating competition in online advertising from Facebook Inc., which has done a better job than rivals in helping users create profile pages and connect with friends online. Schmidt, who was CEO for a decade before handing the reins to Google co-founder Larry Page in April, said his company has been unable to forge an alliance with Facebook, the largest social network.

“We’ve tried very hard to partner with Facebook,” he said, noting that Facebook has built a partnership instead with Microsoft Corp. that includes search. “Facebook has done a number of things which I admire.”

Google, based in Mountain View, California, is working to improve its social features. In March, it announced a service called "+1’’ that lets Web users recommend content to friends directly from the company’s search-results pages.

New Partners

Google will begin letting users recommend outside Web pages as well, the company said in a blog posting today. The new service’s partners include retailer Nordstrom Inc. and AOL Inc.’s Huffington Post.

Schmidt described Google, Facebook, Apple Inc. and Amazon.com Inc. as a “gang of four” that excel in using technology to win consumers and help companies build products.

“Each of them is a consumer brand that provides something that you can’t do otherwise,” he said.

Microsoft, by contrast, “is not driving the consumer revolution in the minds of consumers.”

Apple’s role as a rival hasn’t kept it from remaining a Google partner, Schmidt said. Apple, whose iPhone competes with Google’s Android devices, recently agreed to extend an accord for Google’s search and mapping service, he said.

Google would still like Nokia Oyj to be a licensee of its mobile Android software, Schmidt said. Microsoft landed a deal with Nokia earlier this year to provide software for its smartphones.

Google dropped $3.42 to $525.60 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have fallen 12 percent this year.

Schmidt, who joined Google in 2001, said he expects to be there for a long time, although he didn’t provide specifics. Page will bring “much product rigor” to Google as CEO, Schmidt said.

--With assistance from Brian Womack in San Francisco. Editors: Tom Giles, Nick Turner

in San Francisco at jgalante3@bloomberg.net; Brett Pulley in New York at bpulley@bloomberg.net

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To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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