Google's back-up plan: the enterprise

It’s hard to imagine the online ad market cooling off, but when it eventually does, companies that make their living from it would do well to have a back-up plan.

Asked at a press conference Tuesday if Google is thinking about an alternative business plan for 5 to 10 years out, Chairman and CEO Eric Schmidt didn’t miss a beat: “We are, and that’s why we have Google Enterprise,” he said.

Best known for consumer services, Google has several products for businesses including search appliances, a paid version of Google Apps and a service that provides Web site hosting and online storage.

“That business is likely to become, over the period you are describing, a very significant business, because it utilizes our infrastructure and it utilizes our scale,” Schmidt said, answering questions at Google’s first “international press day” in Paris.

It will have to iron out some teething problems first, however. Google has faced complaints from customers that it was unable to meet service-level agreements for Google Apps.

For now, search remains at the core. “Search was, and is, and perhaps will be for many years, the killer app,” Schmidt said. “We have more engineers on it than anything else.”

Personalized search, which uses people’s search history, location and other factors to deliver better results, is “perhaps the next big phenomenon,” according to Schmidt.

“The best search is personal search,” he said. “This is going to become a more and more fundamental theme of Google as we go forward. … If I say ‘Paris is very hot,’ am I talking about Paris the city or Paris the young lady in jail in California? It’s very difficult for us to know unless we know things about you, like where you are.”

Collecting such information raises privacy concerns, however, and Schmidt fielded several questions about Google’s growing hoard of user data. “There’s a general concern about privacy in the online world and it’s largely legitimate,” Schmidt said. “If people start to not trust Google because of personal privacy, then we’ve got a problem. So everything we do is guided by that.”

He also faced questions about censorship. At one point he boasted that the Venezuelan TV station RCTV, which was banned recently by the government, had “survived by being on YouTube.” He was asked later if RCTV would stay on YouTube if President Hugo Chavez asked Google to remove it. “Every case is different,” he replied. “We must operate under the national law.”

The company also announced that it will be “carbon neutral” by 2008, which involves reducing its energy consumption as much as possible, then “canceling out” its carbon-dioxide emissions by funding projects that help the environment.

Google has reduced the energy consumption at its giant data centers by more than 50 percent compared with “standard” data centers, using evaporative cooling for its servers and other means, said Urs Hoelzle, a senior vice president of operations. At the same time, he admitted, Google is growing so fast that its energy consumption each year is actually increasing.

“We’re still in a period of rapid growth so we’re probably growing, for the foreseeable future, in a double-digit percentage per year,” he said.

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