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Google CEO Eric Schmidt is on stage right now at Fortune’s Brainstorm conference being interviewed by Fortune’s David Kirkpatrick. Here are my notes live:

Q: What is Google’s next great revenue stream?

Schmidt: How about text ads?

Q: The biggest knock against Google is that it is a one-product company. how do you respond to that?

Schmidt: Google is a one-product company. It is called Google. We think about features, not products. People usually talk about text ads when they say that. While the vast majority of our revenues comes from text ads, there is no single large category of text ads or geography. It is well diversified. We serve text ads against content that is not searchable.

Q: We select for people who share our values. We don’t value experience very much. We also select for people who want to work with other people. Because it is collaborative.

Q: But you are known for saying that it is hard to manage larger groups?

Schmidt: If you look at the history of software development, all the interesting things that have been built have been built by two people. It is the nature of software technology.

Q: Isn’t working in larger teams going to be necessary?

Schmidt: this is an unsolved problem. You start small, then you have big projects. You follow a traditional S Curve, but the time you have become like this you are entirely predictable {talks about 20 percent time as driving creativity and helping to recruit top technical people]. It serves as pressure cooker release valve.

Q: Almost every challenge you have has to do with scale. I hear more people saying I don’t feel safe that Google should have so much information about me.

Schmidt: Because of the way technology works, all the technology companies are aggregating information about people. It is a political debate. Countries differ on this question. England has the largest number of closed circuit cameras by a factor of ten, but they also let you sue the papers if you feel you are defamed.

We get into constant problems with some prosecutor who subpoenas information we don’t want to give them, and we resist it. Which is why we don’t fully operate in China. Our argument is that information is not available in your domain. So countries are now trying to rewrite their laws to say this information cannot be available anywhere on the Internet.

Q&A from audience:

Q: What about mobile?

Schmidt: Our wireless initiative was a perfect outcome. It was the cost of an outcome. I am on the board of Apple. Last night I was in Palo Alto and there was a line outside. It shows the device is a step forward. IPhone’s competitors all have dec A phone is GPS, a camera, a computer, and a browser. The Phone is tehfirst one with a really functional browser. We show full ads, so that is a huge for revenues/

The new category of apps that have not come out yet really is a breakthrough. One winner of the Android apps, it looks around, names the buildings it sees and tells you what is happening inside of them. That is a really interesting product. In mobile there are a lot od product that have that WOW factor, because of the use of GPS.

I think all the most interesting next-generation social apps will be mobile.

Q: [Sam Whitmore asks if Google does any work for the government related to the Patriot Act]

Schmidt: Regarding the Patriot Act or any of the three-letter organizations, absolutely not. We do provide the federal government with some search and other services through our [government] sales group.

Q: enterprise plans?

Schmidt:
The easiest for us to enter the enterprise is to address high pain levels like e-mail, messaging, calendaring.We have something like a million companies using these services, mostly small. My view is that it will be a many-year process, but we will create tools that will eventually go to the top.

[Interview is over].

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A large portion of YouTube videos are watched on other sites in embeddable players (like the one below of Erepublik CEO Alexis Bonte giving us an Elevator Pitch). But if someone watches a YouTube video on a site other than YouTube, does it count towards the total views of that video? Apparently not, or at least not always.

One TechCrunch reader had a video of his picked up by a popular site, where it generated 15,000 views, but the YouTube view counter for that video only went up by about 1,000 views. Perplexed, he sent YouTube an email, and received the following response (bold added for emphasis):

“Hi there,

Thanks for your email. I would like you to know, if a user views the video
on the external website itself, it is not added to the view count of the
video on YouTube. However, if a user is directed to the YouTube site on
clicking the embedded video on the external website, it would register as
an additional count to the video views.

Additionally, changes to video and account information on our site such as
video view count can take a few hours to update and synchronize. We’re
constantly working to make that happen a lot faster and appreciate your
patience.

Regards,

Shweta
The YouTube Team”

This is just from a support rep who may be mistaken about YouTube’s policy on counting views (we have an email in to YouTube asking for clarification), but her response does suggest that at least some views from other sites do not count. One reason for this might be that some external sites put YouTube videos on autoplay whenever the page they are on loads. That can game the whole YouTube popularity system, so YouTube does not count autoplays, as NewTeevee recently found out. And indeed, our reader’s video was on a site that autoplayed his video. (For more on how the various video sites count views, see this TubeMogul report).

Mystery solved, right? Well, not exactly. We use YouTube for all the videos on Elevator Pitches, and we don’t set those to autoplay. Viewers have to click on them to watch.

Yesterday, we hit play repeatedly on a bunch of videos on Elevator Pitches, and then went over to their YouTube to see if any of the views registered. Nada. Then we started watching the videos on YouTube itself. Still nada. Maybe it’s the time delay, though. We really can’t tell. Because the views do change a few hours later, there is just no way of knowing if it was from us or someone else.

So as a final test, I’ve embedded an Elevator Pitch below from the CEO of Erepublik, a massive online social strategy game. At the time of this post the video has been viewed only 490 times. We’ll see if we can move that number up at all from here.

Update: We’ve received word from a YouTube spokesperson who told us:

Viewcounts are important to the community and are a reflection of the interests and intents of video viewers. Autoplaybacks are not counted toward the visible “views” numbers displayed on the YouTube site because autoplaybacks are not viewer initiated. The majority of videos are not affected by this.

Update 2: The view count for the video below is up to 1,786 views by Saturday morning. Most of those are presumably from this post, and took a while to register. So maybe Google does know how to count but it can only count very slowly.

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The video above shows a user interface being bucket tested by Google to select (probably randomly determined) users. Earlier today we showed a screen shot of the interface and a video of the search history, recorded by Adrian Pike, the CTO of startup Tatango. This new video, however (also recorded by Pike), shows the full Google search experience with a very Digg-like interface. Users vote search results up or down - a down vote makes it dissapear with a “poof,” an up vote moves the result to the first page.

Google is also testing comments, with linked user names, and others can vote those comments up and down. In effect, this bucket test shows a Google that combines their search algorithm with every important feature of Digg. It’s something they’ve been working on for nearly a year in various iterations, but this is the first time we’ve seen user comments, and the video shows details that you just can’t experience via screen shots.

If feedback on this is positive look for it to be added to the Google Search experimental site where anyone can opt in to use it. It’s still many steps away from being integrated into everyday search on Google, but this shows quite clearly where their head is at - Digg.

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Both the Senate and House Judiciary Committees are holding separate hearings today on the antitrust issues raised by the proposed Google-Yahoo search advertising deal. (More details on the deal here). Microsoft’s general counsel Brad Smith, whose fought his own share of antitrust battles on behalf of Bill Gates, will be wagging the antitrust finger at Google. In his prepared testimony, he will claim that the deal potentially gives Google control of 90 percent of search ads, will lead to fewer choices and higher prices for advertisers, and raise serious privacy concerns for consumers. He will say:

If search is the gateway to the Internet, and most believe that it is, this deal will put Google in a position to own that gateway and the information that flows through it. Never before in the history of advertising has one company been in the position to control prices on up to 90 percent of advertising in a single medium. Not in television, not in radio, not in publishing. It should not happen on the Internet.

Google’s chief legal officer David Drummond will respond that the deal is good for consumers because they will see better ads, and good for advertisers and Web publishers because more people will click on those ads. He will maintain that Google will not control all of Yahoo’s search advertising, and will point out that Yahoo will compete in that arena, continuing to sell its own ads. It will also continue to compete in regular search. And as for privacy, Google and Yahoo will not exchange “personally identifiable information” about each user.

Here are Drummond’s talking points, which are summarized on the Google Policy Blog (where you can also find his full testimony):

* This agreement will be good for Internet users (who will see ads that are better targeted to their interests); advertisers (whose ads will be better matched to users’ interests, allowing them to reach potential customers more efficiently), and website publishers (who will see increased revenue from better-matched ads on their websites).

* Google and Yahoo! will remain vigorous competitors, and that competition will help fuel innovation that is good for users and the economy. As we’ve said before, commercial arrangements between competitors are commonplace in many industries. Antitrust regulators in the US have recognized that consumers can benefit form these arrangements, especially when one company has technical expertise that enables another company to improve the quality of its products.

* Our agreement will not increase Google’s share of search traffic, because Yahoo will continue to run its own search engine and compete in online search.

* We’re particularly excited that as part of the agreement, Yahoo! will make its instant messaging network interoperable with Google’s. This will mean easier and broader communication among a growing number of IM users, and enable users to choose among competing IM providers based on the merits and features of the services.

* We have taken a number of steps in the Yahoo! agreement to protect user privacy. As Google supplies ads to Yahoo! and its partners, personally identifiable information of individual Internet users will not be shared between the companies. Yahoo! will anonymize the IP address of a searcher’s computer before passing a search request to Google.

That last point about Yahoo anonymizing user IP addresses could set an interesting precedent. Advertisers would rather see those IP addresses freely shared across ad networks and Websites so that consumers can be targeted no matter where they go on the Web. But Yahoo and Google obviously felt it could have been a big enough issue to squirrel the deal with the government. As Congress looks at behavioral targeting in general further down the road, that could pop its head up again (even n a non-antitrust context).

These particular antitrust hearings have been brewing for a while. Google and Yahoo have tried to protect themselves against Microsoft’s criticisms by structuring the deal as a straightforward arms-length commercial agreement. And the fact that Microsoft has a lot at stake in seeing the deal squashed doesn’t make it the strongest witness at these hearings. It is not exactly a disinterested third party, since it is still trying to wrangle the search business from Yahoo itself.

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Google has experimented with search features that let users vote on search results, and/or recommend other results than those given, since late 2007. They generally bucket test these features (meaning some small percentage of users, randomly chosen, see them), and if testing goes ok, they move them into the optional experimental area where any user can add them.

One of our readers, Adrian Pike, may be included in a new bucket test that includes a variation of last year’s experiment. The screen shots he’s sent show an up arrow and an X. Clicking on the up arrow turns it green and adds to the total vote count at the end of the search result. The main difference between this and last year is that it looks like users can change their vote. If anyone else sees this, please let us know.

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The apparent spam attacks on Google continue. Among the top results appearing briefly in among the top ten search terms highlighted on Google Trends (before being pulled down) are “sh*t pond” (which went to No. 3) and “how to poop at work” (which made it at least to No. 10). That is after the top result this morning was “ǝlƃooƃ noʎ ʞɔnɟ.” And last week, there was the swastika incident.

Some people seem to be toying with Google, making whatever search terms they want appear on the Google Trends hot list. For instance, right now, the No.3 trend is hymenoptera (the order of insects bees belong to). The No. 1 and No 2 spots, “missing money” and “missingmoney.com,” are much more spammy in nature.

Are these real searches or spam? The obvious fake ones throw every term on the top ten into question. If all it takes to get on Google Trends is a lot of recent or concurrent searches, that now looks to be the new game among spammers and pranksters alike.

(Hat tip to Akshay Jain and Nick Shulman).

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Starting today Google has integrated results from Code Search as snippets in the main search results page. Code Search was launched by Google in October of 2005 as a seperate vertical search property. As the name suggests, Code Search indexes and parses source code on the web and provides users a simple but flexible search and repository browsing interface.

For a Google property such as Code Search, integration into the main large-scale traffic flow via the primary search results page is an indicator of product maturity. Previously seperate properties such as Finance and Maps followed a similar development and audience exposure path.

Users of Code Search are able to locate reference implementations of common algorithms or routines, or search for best or worst practices amongst the code published and available. and queries filter based on license, language, package and more. Code Search competes with both Krugle and Koders, startups that were both founded prior to the launch of the Google code search service but that both provide their own unique features respectively.

Last week Google announced a number of improvements to Code Search, namely improved code highlighting, browsing (especially with larger projects) and ability to refine results based on class, project, file etc.

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Earlier this month Louis L. Stanton, the senior judge on the United States District Court for the Southern District of New York, ordered Google to hand over YouTube user log data to Viacom to help Viacom determine damages in their ongoing billion dollar litigation with Google.

We and others cried out in protest, since the data being delivered included username, IP address and identifiers of all videos viewed on YouTube. And the entity it was being delivered to has a penchant for litigating over copyright infringement (some of their many lawsuits are mentioned in the original post). The fear is that if data is turned over to Viacom, any YouTube user who has watched a copyrighted video would be subject to a lawsuit.

Viacom’s first line of defense when the negative press hit was obfuscation. They said “Viacom has not asked for and will not be obtaining any personally identifiable information of any YouTube user. The personally identifiable information that YouTube collects from its users will be stripped from the data before it is transferred to Viacom.”

Sounds good, right? The LA Times mentioned it in their article on the issue and quoted Viacom. A number of other publications then followed, saying that Viacom wasn’t going to collect all the data they were entitled to under the order.

But not really. Everyone involved in the lawsuit (except the users, who weren’t asked) agreed that a YouTube login ID isn’t personally identifiable. The original Stanton order summarized: “Defendants do not refute that the “login ID is an anonymous pseudonym that users create for themselves when they sign up with YouTube” which without more “cannot identify specific individuals”.”

So Viacom didn’t abandon any of their data rights, but they sure went out of their way to suggest they did. And anyone who watched the 2006 AOL search debacle will know that users were absolutely identified based on nothing more than a list of the search terms they entered. Does anyone really believe that a motivated plaintiff couldn’t identify individuals based on a user selected ID (mine is “TechCrunch”), IP address and a list of all watched videos?

Now Viacom is talking again, and saying that they won’t use the information to go after individuals.

Here’s the problem - I don’t know if Viacom will live up to their promise, or not. The fact that Google is unwilling to hand over employee data tells me they’re not so sure, either. And frankly I shouldn’t have to care or have to worry about Viacom’s trustworthiness. As a user I interacted only with Google, and there are implicit and explicit promised by Google to protect my data. If Google hands my data over to Viacom, it doesn’t really matter to me if Viacom uses it or not. All I will remember is that Google gathered and stored information without my consent, and then handed it over at the first sign of trouble.

Google’s self imposed code of conduct is “Don’t be evil.” It doesn’t say “don’t be evil unless there’s important litigation at stake.” Google’s reputation is on the line, and how they respond will show their true character. They’ve shown they’ll go to bat for employees, now it’s time for them to show they’ll go to bat for their users.

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A number of people noticed a swastika (卐) on the hot trends list of Google Trends this morning.

Google took the site down with a message that it was undergoing network maintenance and should be available again in a few hours. Then, minutes later, the site was back up, with the swastika still listed as the thirteenth hottest search term.

Google Trends says the query peaked at about 6 am Pacific. The query is actually a Chinese character, but the trends list that it shows up for is U.S. searches. It looks like a successful spamming attempt, but given the number of queries Google handles it looks to be pretty sophisticated - at one point it was the number one query. We’ve pinged Google for a comment.

Update: It’s now been removed or has fallen off the hot trends list.

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My Yahoo, the leading customized homepage provider, has finally rolled out its redesigned interface to all of its users. Yahoo has allowed users to upgrade to the new interface for over a year, but has taken its time in rolling it out to everyone.

New features in this release include:

• More modules from content providers (New York Times, WSJ, etc.)
• More modules that integrate content from other parts of Yahoo’s network (Flickr photos, Calendar, Movie Showtimes)
• Better support for Third party email (Gmail, POP) and other services (Netflix and Facebook)
• More layout options, tabbed browsing, other navigational improvements

The interface has been in need of a facelift for some time, as Yahoo has watched its userbase dwindle from 56.9 million users last November to 41.6 million in June. Comparatively, iGoogle has has seen increase from 23.8 users in November to 24.3 million unique visitors in May. Google performance isn’t exactly stellar, either (maybe iGoogle could use a refresh too), but at least it hasn’t been losing users. So where did My Yahoo’s 15 million lost users disappear to? We’re guessing Facebook, which has gone from 92.7 million visitors to 123.9 million in the same time period.

Also notable is Yahoo’s announcement that they intend to allow external developers to create their own applications and modules for use on My Yahoo, along with other parts of the Yahoo network.

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There’s a small grey box rendered in an iFrame in the top left hand corner of Gmail, and TechCrunchIT is trying to figure out what it is. The icon is a ten by ten pixel graphic with a diagonal line across it, with one half in black and the other in gray. It isn’t an inline image, as you can not highlite it or select it in your browser, nor right-click on it. There is also no reference to the image within the style sheet for Gmail.

So what is it? Since it’s being rendered in an iFrame it’s difficult to say. We’ve been emailing back and forth with Google since Wednesday but so far they haven’t said what it is. What’s your best conspiracy theory? The most elaborate/entertaining or most accurate comment (on TechCrunchIT) gets a free TechCrunch Tshirt.

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