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Google's power trip

Google CEO says company tends to create enemies Google Inc's chief executive Eric Schmidt said the company's "disruptive" business created enemies for world's No.1 search engine, and he said that governments were keeping a close watch on the firm.

"Every government sort of has some group that's busy trying to figure out what we're up to. Because information is power," Google CEO Schmidt said at an event at the company's headquarters on Tuesday in response to a question about Google's weakness and challenges. "We're quite disruptive, and in the course of that disruption we tend to create enemies, which are hopefully not intended on our part," Schmidt said.

Google has increasingly clashed with regulators and other technology companies. Last month, the Internet search giant relocated its search site from mainland China to Hong Kong, in response to censorship in China and a cyberattack that it said originated in China. Google has also come under the scrutiny of the United States Federal Trade Commission which is looking into the competitive impact of the company's plan to acquire mobile advertising company AdMob for $750 million.

And Apple Inc, once a Google ally, recently announced its own plan to compete with Google in the mobile advertising market.

Schmidt's comments were made at the end of an all-day event at Google's Mountain View, California headquarters on Monday at which the company hosted about 400 information technology managers and pushed for the adoption of Internet-based software at their organizations. He said Google has a couple of million enterprise customers for the Google Apps software suite and was adding about 3,000 business per day.

At the event, Google also unveiled new versions of its Docs package of online productivity software, adding improvements such as the ability to view changes that other users make to a document in real time. The event comes as Microsoft Corp, which dominates the market for productivity software, is expected to roll-out a new version of its Office products with web-based features by June. Google sells companies an enterprise-grade version of its online applications, including Gmail and word processing, for $50 a year per user. Google's Apps business -- which the company has said is profitable and generates hundreds of millions of dollars in revenue a year -- is a tiny portion of Google's overall business, which yielded almost $24 billion in revenue last year.

Apple's plunge into the advertising market announced this past week gave Google a big boost in arguing for regulators to approve its acquisition of mobile advertising leader AdMob, Google CEO Eric Schmidt said on Sunday.

U.S. antitrust enforcers are apparently concerned the AdMob purchase could hurt applications developers, who often sell their apps for very little and make their money by selling advertising space on them. But Schmidt, speaking after a speech at the American Society of News Editors, said Apple's plan to make a foray into the advertising market with iAd, was "evidence of a highly competitive market." "It just seems obvious to me," said Schmidt. "I hope it (Google's purchase of AdMob) gets approved." Apple's new advertising platform for the iPhone and iPad -- dubbed iAd -- marks Apple's first move into a small but growing market. With iAd, applications developers will pocket 60 percent of the revenue. Apple will sell and host the ads. Apple's entry into the mobile ad arena had been widely expected. It paid $270 million for Quattro Wireless, an advertising network that spans both mobile websites and smartphone applications.

Google, the online search leader, announced a $750 million deal in November to buy AdMob, which controls about one-third of the market for putting ads on mobile applications and web pages. FTC staff have been canvassing app developers to try to line up support to fight the deal, said one developer, who asked to remain unidentified because he had been interviewed by FTC attorneys. "It's been really interesting talking to them because they are so dead set against this," said the developer. "They have been clearly positioning to try to stop this." Google, which generated 97 percent of its $23.7 billion in 2009 revenue from advertising, has faced growing antitrust scrutiny.

The company walked away from a search deal with Yahoo in 2008 when the Justice Department said it would challenge the tie-up. And Schmidt was forced to step down from Apple's board last year after his dual roles came under FTC review. The U.S. Department of Justice has been sharply critical of Google's settlement with book publishers and authors' groups that would allow the search giant to create an online digital library.