In an effort to make that prediction a reality, Google has announced a new set of Android developer classes aimed at helping developers through a series of lessons. “Android Training,” as it’s called, contains more than 30 lessons on topics such as Battery life optimization, Improving layout performance and Designing effective navigation. One important topic, Monetizing your app, only has one lesson on mobile advertising.

Initial offerings look fairly basic, but it’s just the start, said Reto Meier, Android Developer Relations Tech Lead in a blog post:

Each class explains the steps required to solve a problem, or implement a feature, with plenty of code snippets and sample code for you to use within your own apps. We’re starting small and this is just the beginning for Android Training. Over the coming months we will be increasing the number of classes available, as well as introducing over-arching courses and sample apps to further help your development experience. Helping developers build great apps is what the Android Developer Relations team is all about, so we’re excited to see how you use these classes to make your apps even better.

This is a nice step, but there’s a lot more to be done by Google. Android is now up to 10 billion app downloads overall, at a pace of 1 billion a month, but it’s not the primary focus for developers, especially among those eager to make money. A Flurry report comparing iOS and Android earlier this week highlighted the challenges for Google. It projected that 73 percent of fourth quarter app starts will be by iOS developers, compared to 27 percent for Android. That’s consistent with previous quarters and and an improvement for Apple from the first quarter of 2011, when iOS represented 63 percent of app starts.

Apple’s 3:1 advantage is due in part to the fact that Android apps are earning 24 cents compared to every dollar made for the same app on iOS. It’s this disparity that makes it a no-brainer for many developers to start their efforts on iOS. And I’ve also heard that Apple provides better development tools, which also helps iOS attract developers.

One set of classes won’t change the equation in Android’s favor, but it shows that Google understands it needs to do more to gain developer interest. The platform is going to get plenty of attention just by its sheer size; Flurry estimates that 550,000 Android devices are now activated daily compared to an estimated 450,000 for iOS. But to really fulfill Schmidt’s vision and the potential for Android, Google will need to not only improve its developer tools and resources, but also make it easier for Android devs to make money. As long as that 3:1 revenue advantage exists for iOS, it’s going to be hard for Android to win over the hearts and minds of developers.

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Now, six months on from that initial blitz of publicity, he says that it’s almost ready to go on sale for the first time. A finished version is due by the end of 2011, he told GigaOM, specifically aimed at programmers.

“It will be a small run of 10,000 machines given to developers in the hope that they will seed it with software,” Braben explains. “Sometime next year we should be able to release the consumer version.”

In and of itself, the device is pretty interesting. Inside a business card-sized case — they have moved away from the USB stick-style version that was previously shown — the computer acts as a hub for software and hardware.

The various ports allow you to plug in a mouse, keyboard, TV or monitor (both analog and digital), connect to Ethernet, or plug in an SD card or wireless dongle. In terms of what it can do, right now the machine can run a few Linux distros on its ARM architecture, but is looking for more options: which is why the first batch will be targeted at the software development community.

Here’s a video interview with the organization’s Eben Upton, conducted by ARMDevices.net, that shows you what they’re doing.

Although the charity has yet to announce precise details, it has said that it plans to offer a “buy one, give one” model that allows people to pay for extra units that can be distributed to children.

The main aim here, like other schemes such as the One Laptop Per Child project, is based around the idea of improving technical education. In particular, Raspberry Pi is about helping kids learn to code, rather than simply learn to use software like Microsoft Office — a move in education slammed by many, including Eric Schmidt of Google. In that, he says, it may capture the spirit of the BBC Micro, an educational, technological project that Raspberry Pi’s Cambridge-based team are intimately familiar with. It’s not the only scheme to do so.

Although Raspberry Pi will be available for worldwide shipping, the organization — which is a charity — plans to focus on rolling it out in Britain, and in particular to raise enough funds to distribute it widely.

“Our ambition is to give it for free to every school child in the country,” says Braben.

This will, if things go to plan, involve giving machines to an annual cohort of 700,000 children in a particular school grade: something that would cost approximately $17.5 million annually.

“People often say that every child has a PC at home,” he says. “And yes, if you look across the South East of England in particular, there are plenty of places where that is true — and Cambridge is probably one of them. But it is certainly not the case everywhere.”

But is a $25 computer what kids really need? When I wrote about the project earlier this year, I wondered whether building a new device actually ignored the fact that many children do actually have access to a computer — just not a PC. There are millions upon millions of mobile phones in the hands of kids all over Britain, and many times more than that worldwide.

When asked about this, Braben suggests that the relationship between computers and phones is complicated. Smartphones comparable in power to Raspberry Pi are still not common among children, even in privileged homes (and for good reason) and there are so many different operating systems, variants and languages involved that learning to code on one may not be particularly useful in a broad sense.

In the end, though, he thinks that something like Raspberry Pi can “cohabit” with mobile.

“The thing you have to realize is that most computers are pretty fundamentally uncool to kids — whereas what they do is exciting,” he says.

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“I was flabbergasted to learn that today computer science isn’t even taught as standard in U.K. schools,” Schmidt told the audience in Edinburgh, Scotland. “Your IT curriculum focuses on teaching how to use software, but it doesn’t teach people how it’s made. It risks throwing away your great computing heritage.”

The heritage he refers to is rich, but often ignored today, since West coast companies dominate. But Britain did play its part in the development of the industry: the U.K. was the home of the first computer that could store programs, The Baby; the place where computer science pioneer Alan Turing lived and died; and the site of the first commercial business computer, LEO.

It wasn’t just stiff upper-lipped boffins meddling around with machines during the war, either. Britain was also the place where huge and unlikely institutions helped fire the home computer revolution of the 1980s.

Take a look at what the BBC did when it took on a mission to help educate and inform people about this coming revolution, for example, by embarking on what was known as the “Computer Literacy Project”. In 1981 one of the world’s foremost broadcasters produced a regular TV show about programming (yes, really) and at the same time threw its lot in with a local computer firm, Acorn, to produce a range of machines that could get people coding, and ended up in homes and schools across the country.

It was a move that brought massive dividends, helping breed at least two generations of bedroom coders, hackers and programmers and boosting a series of companies and technologies that ended up resulting what we know as chip maker ARM.

Now, 30 years on from that move, it seems the BBC is considering whether it should try again — by embarking on a new digital literacy initiative that could spark another revolution and help Britain respond to Schmidt’s criticisms.

The corporation is apparently undertaking a consultation to work out if it should back a ‘new BBC Micro’ scheme — and how it might do so.

The project, which is not yet live, is being led by academics at Manchester Metropolitan University. The group has been contacting people in the industry to ask them for ideas and contributions, according to this email reproduced on the Teach Computing blog.

If you were to make hardware available to schools in the same way as the BBC Micro in 1981, what sorts of hardware would you think was essential to develop the skills and understanding needed?

If you were designing a tv programme today that sought to have the same effect as The Computer Programme in stimulating interest in the most important new area of technological development, what area would you expect it to address and what topics would you expect it to cover? Would it still be in the field of computer science? What areas?

The ambition is fairly clear: “developing a project with the specific purpose of encouraging an interest in computers, computer science and computer programming amongst young people”. But the mail makes it obvious that the process is still incredibly early on — and, as a consultation, there’s clearly no guarantee it will end up with any tangible result.

But it does hint that some of Britain’s biggest institutions are trying to fix a serious issue. Indeed, on Twitter, Professor Keri Facer, who is leading the project, suggested the government and private companies may get heavily involved too. She was sure that partnership would be important, she said — “after all, the govt paid for the last BBC Micro project”.

Whatever happens, the scheme does tap into a wider movement trying to improve computer education — not just in Britain, but worldwide. One Cambridge-based consortium is already developing a low-cost computer known as Raspberry Pi, which is intended to help children learn to code. There is also, famously, the One Laptop Per Child scheme that span out of MIT.

It also chimes with a number of media critics and academics who suggest that not only are open technology systems vital to a healthy democracy — but that we need to make sure the next generation of computer users can really get inside those systems. As Douglas Rushkoff says: “Program or be programmed”.

BBC Micro photo used under Creative Commons license courtesy of Flickr user Soupmeister

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Speaking at the Edinburgh TV Festival, an annual shindig for Britain’s television industry, the Google chairman lamented the state of computer education in the U.K. and said that its failure to give kids the tools to program is having a long-term impact on the country.

“The UK is the home of so many media inventions,” he said. “It’s interesting that you invented photography, you invented television, you invented computers in both concept and in practice — it’s not widely known, but the world’s first office computer was built in 1951 by Lyon’s chain of tea shops. Interesting. Yet nobody, none of the world’s leading players in these fields are from the UK. That’s a problem.”

He pinpointed the problem as a growing divergence between science and the arts — a cultural shift towards the humanities that has left engineering, science and mathematics languishing. Schools now focus their computer classes on practicalities like learning the ins and outs of Microsoft Office, rather than giving children the tools to master machines.

“I was flabbergasted to learn that today computer science isn’t even taught as standard in U.K. schools,” Schmidt told the audience. Your IT curriculum focuses on teaching how to use software, but it doesn’t teach people how it’s made. It risks throwing away your great computing heritage.”

You can see the potted highlights of his talk here:

The argument has received a strong response. For example This thread at the TES, a community for educators, vaccilates between anger and acceptance. “Did no-one else get a shiver of revulsion at a CEO of a multinational company like Google lecturing the educational community of this country on our curriculum?” asks one forum member.

Not everyone was defensive, though. In The Observer, columnist John Naughton (himself an engineer) said children need to be given a “license to tinker”, with support from government officials. Meanwhile, a report from the Educating Programmers Summit suggests that answers are needed but that “any solutions for the UK’s education issues are going to have to come from within”.

Of course, this argument is not entirely new. Fifty two years ago the famed British intellectual CP Snow outlined the problem of two divergent worlds of science and humanities — his so-called “Two Cultures” — that were failing to progress because they were not working in harmony. As a novelist and scientist, Snow believed there was a middle ground. Yet there has not been much progress since he called for a revolution.

But this is not just a British problem. American media theorist Douglas Rushkoff has argued vociferously that schools in the U.S. face a similar dilemma. In his book Program Or Be Programmed, he says that if we do not understand how to control machines, they will end up controlling us. Writing on the Huffington Post last year, he called out the U.S. education system as a failure in much the same way as Schmidt.

Amazingly, America – the birthplace of the Internet – is the only developed nation that does not teach programming in its public schools. Sure, some of our schools have elected to offer “computer” classes, but instead of teaching programming, these classes almost invariably teach programs: how to use Microsoft Office, Adobe Photoshop, or any of the other commercial software packages used in the average workplace. We teach our kids how to get jobs in today’s marketplace rather than how to innovate for tomorrow’s.

Similarly, Jonathan Zittrain’s 2008 book The Future of the Internet — And How To Stop It voices concerns that the rising popularity of closed systems like the iPhone mean users are moving further and further away from a genuine understanding of computers. His argument is essentially about the difference between being a user and a consumer.

The standard of computer teaching in America is much worse than Schmidt makes out, with public schools often bereft of any computer teaching. And the U.S. might have a stronger software culture thanks to Silicon Valley and some of the top colleges in the world, but if most kids aren’t getting the chance to learn programming skills perhaps the same decline that Britain has seen could be on the cards for America.

The reality is that this is a problem for much of the West.

So how do you fix it?

There are efforts to try. Individual teachers can do a heroic job, and there are schemes like the U.K.’s Raspberry Pi, an open, low-cost computer for schools. I gave that project a hard time in the past, but at least it is attempting to answer these questions. The real concern must be whether anything we do now is simply too little, too late. Is it?

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Quixey, an app search engine with $400,000 in initial seed funding from Eric Schmidt’s Innovation Endeavors, has just announced $3.8 million in new funding. The Series A funding comes from US Venture Partners, WI Harper Group, Web Investment Network along with additional funding from Innovation Endeavors.

The money will go toward the expansion of Quixey, which tries to partner with websites, app stores, search engines and carriers to offer its services. Quixey is trying to stand out by offering what it calls a functional search engine, which takes in more than just a title and description of an app but pulls in information from blogs, forums, review sites and social networks to better understand what an app actually does. Then it allows users to enter queries on what they want to do with an app, without having to know the name of a particular app. It pulls up results for apps on various platforms including Android, iPad and iPhone as well as recommendations for Windows, Mac, Explorer, Firefox and the web.

Competitor Appsfire pulled in $3.6 million in May while Chomp, an app recommendation service also raised $2 million in March. This is just another sign that apps are booming, (mobile apps alone are expected to bring in $37 billion by 2015), and it’s creating a lot of opportunities, not just for developers but for services that play on this explosion of apps.

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Eric Schmidt, the former CEO and current chairman of Google, took the stage at the All Things Digital conference in Rancho Palos Verdes on Tuesday night, where he was subjected to semi-rigorous questioning and occasional witty banter from the show’s hosts, Walt Mossberg and Kara Swisher. In between the things he wouldn’t talk about (the Commerce Secretary job) and the things he laughed off (his bad jokes about privacy), Schmidt said some interesting things about a number of Google topics, which we have tried to collect and decipher for you below (Note: the words attributed to Schmidt are paraphrases of what he said, not verbatim quotes).

• What Schmidt said: I screwed up on digital identity.
  
  What he really means: Google still doesn’t understand how social works.
  

  It’s nice of Eric to take the blame for missing the boat on the power of social networks and online identity — which Facebook now effectively owns — and that is his duty as the chief executive, since the buck stopped with him. But the truth, as we have argued before, is that Google as a whole has not really figured out the impact of social networks, and that is a far bigger problem than just a single guy at the top. Its +1 offering is a nice try, but the jury is still out on whether it will be a Buzz-like flop or not.

• What Schmidt said: We don’t need to partner with Facebook or buy Twitter, we can get social data in other ways.
  
  What he really means: We will continue scraping whether Facebook likes it or not.
  

  The Facebook-Google blockade over social information is one of the biggest ongoing battles in the social web, and there is no question that it is hurting Google in a serious way, but Schmidt claims to be unconcerned. Gooogle has tried to partner with Facebook to get social data, but Facebook has done deals with Microsoft instead (which also owns a stake in Facebook) and thumbed its nose at the search giant. Google has tried to force Facebook to let users export their contact info, and Facebook basically told the company to take a hike. But Facebook is clearly rattled, since it hired a PR firm to plant nasty stories about Google’s alleged scraping of social data. This one is not over by a long shot.

• What Schmidt said: We have face-recognition technology but haven’t released it.
  
  What he really means: We care about privacy, honest — did you guys hear that over at the Justice Department?
  

  I have no doubt that Google has facial-recognition technology. We are already seeing billboards that can do the “Minority Report” trick of recognizing you and then customizing their content somehow. It’s going to happen. And for a company that is working on cars that drive themselves, backing off on a futuristic — and slightly scary — technology just doesn’t seem like the kind of thing Google would do. But given the privacy concerns in Washington, there is no way the company is going to let this one out of the bag until the heat dies down.

• What Schmidt said: We are moving away from links to just giving you information.
  
  What he really means: We are going to keep buying things like ITA and getting into the service business.
  

  The Google chairman said the company is moving further away from just providing search results with links based on PageRank and doing more of what its purchase of ITA — the travel-information service whose controversial acquisition tied Google up in FTC red tape for months — allows it to do, which is to show actual data on a search page rather than linking somewhere else. Instead of having to go to half a dozen sites to check and book flights, the ITA purchase allows Google to show info and let customers book right on a search page. That is hugely powerful, which is why plenty of people didn’t want Google to buy the company. Expect to see more of those kinds of acquisitions in Google’s future, in a variety of different markets and verticals.

• What Schmidt said: The gang of four is Google, Apple, Amazon and Facebook.
  
  What he really means: Microsoft is really good at things that we are not good at.
  

  It’s fair to say, as the former Google CEO did with his “gang of four” comment, that Google and Amazon and Apple and Facebook are where the action is right now, in terms of online businesses and consumer-facing web services, social networks, etc. But Microsoft is still a gigantic company with some pretty huge — and very profitable — businesses, including the Office empire. Google has not made as many inroads into the corporate market as it would like to, despite trying hard with Google Apps and other offerings. But it undoubtedly wants to do better — it just doesn’t want Microsoft to think so.

All in all, Schmidt’s talk at D9 was surprisingly candid for a man who still keeps his cards pretty close to his chest. But he still wouldn’t talk about whether he was going to become Commerce Secretary, and why that didn’t happen — maybe he didn’t want to give up the right to keep making those terrible jokes about privacy.

Post and thumbnail photos courtesy of Flickr user World Economic Forum

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And therein lies the problem. Unless media corporations stop defining themselves by their products, they are going to be unable to navigate the big shift that is changing the rules of the game — what I call the “democratization of distribution.”

The Distribution Democracy

Let’s talk about the television business for a minute. During the early days of television, access to spectrum determined who owned and operated the networks. CBS and ABC became the gatekeepers of attention — whether it was through 60 Minutes, Wide World of Sports or some other such program. Hit programs essentially ensured that viewers “attention” switched from one channel to another, and with it, the advertising dollars.

Then came analog cable and we saw the emergence of more media entities — for example, HBO, ESPN and CNN — which siphoned away attention from broadcast networks to all these new entities. With digital cable, attention got sliced and diced even more, but still the scarcity of “spectrum” inside the cable network pipes meant that there was finite amount of channels available.

Then came broadband, which essentially removed any channel scarcity. The distribution, which had been in the hands of a few large media conglomerates, was suddenly available to everyone. Today anyone, even talentless acts such as Rebeca Black can upload their video to YouTube and become instant celebrities. Justin Bieber, too, is a product of this channel-less revolution.

Just like television, we have seen the same drama unfold in the music, radio, newspaper and magazine industries. The gatekeepers of attention have been disrupted.

“Over 5 or ten years, fiber optics and the wireless explosion will completely crush the business models of old media companies and industries,” Eric Schmidt, former CEO of Google, said in an interview with McKinsey & Co. “For companies focused on content and distribution, distribution just goes away.” Schmidt rightfully argued that there is no need to think of content types by the distribution network they are tied to, because there will be one single network.

Media, as far as I am concerned, has been and will always be a game of attention. A few years ago, during the go-go years of the 1990s, Forbes or Fortune magazine had all our attention and thus were able to monetize that attention by selling tons of advertising against it. CNN could charge premium dollars during its heyday. The New York Times informed us (especially the New Yorkers) and held our attention and was able to monetize it.

Broadband and lately wireless Internet has changed the dynamics of attention. Rebecca Black (with her “Friday” video) and Foursquare are now media, thanks to their ability to grab our attention. Similarly, if people spend all their time scanning through photos on Instagram, then that too is media.

The distribution democracy, which has been accelerated by the emergence of wireless Internet and smartphones, is putting that capability in the hands of tens of millions of people, and we are starting to see the disruptive impact of that in our society.

There have been endless debates about the role of Twitter and Facebook in societal and geopolitical dramas, but I think they are merely tools that have thrived and have enabled changes because the distribution of information has been unshackled, a point so well argued by my colleague Mathew Ingram and New York University media professor, Jay Rosen.

Your Attention Please

One side effect of this distribution democracy is the sheer volume of information that is coming at us from all sides. The torrent of information threatens to drown us and encourages short-term thinking. In a speech earlier this week, Andrew G Haldane, an economist who works for the Bank of England, said:

Information is streamed in ever-greater volumes and at ever-rising velocities. Timelines for decision-making appear to have been compressed. Pressures to deliver immediate results seem to have intensified. Tenure patterns for some of our most important life choices (marriage, jobs, money) are in secular decline.

These forces may be altering not just the way we act, but also the way we think. Neurologically, our brains are adapting to increasing volumes and velocities of information by shortening attention spans. Technological innovation, such as the World Wide Web, may have caused a permanent neurological rewiring, as did previous technological revolutions such as the printing press and typewriter.

If that is indeed the case, and I do believe it to be true, then the concept of what is media needs to be rethought and re-imagined — and that also means that we need to start rethinking our tools of measurement and methods of monetization. And as for my friend who lamented about the quality of content on CNN, he should probably get used to it. With increased competition for attention, he can expect even more of the trivial bits as part of his info-diet.

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While we’ve all heard rumors of mandatory 3.7 GPAs and the ability to answer math questions over the phone with no calculator, the world might sadly never know just exactly how Google makes its hiring decisions. But perhaps former CEO Eric Schmidt has a little more insight into the process. Schmidt discussed the company’s personnel philosophy and corporate culture with McKinsey director James Manyika at a McKinsey conference in mid-March.

• Be exceptional. Duh. We’ve all heard the company likes to stick interviewees with brain teasers to parse out their thought process and job candidates should always be prepared to explain how they’d stick an elephant in a refrigerator or figure out how many piano tuners work in New York. Says Schmidt: “We spent more time — and pretty ruthlessly — on academic qualifications, intelligence, intellectual creativity, passion and commitment. What bothers me about management books, they all say these things generically, but nobody does it.”
• Do your own thing. Schmidt believes the best employees are those who don’t need much managing. “People are going to do what they are going to do, and you’re there to assist them. They don’t need me, they are going to do it anyway. They are going to do it for their whole lives. Maybe they could use a little help from me,” he says. “At Google, we give the impression of not managing the company because we don’t really. It sort of has its own borg-like quality if you will. it sort of just moves forward.”
• Don’t necessarily have a winning personality. Schmidt emphasized the importance of getting the right people, but acknowledged the right people aren’t always the most personable. “You are going to have to deal with the odd people. Not every single one of these incredibly smart people is a team player… even if people don’t want them around, we still need them.”
•  Really love job interviews. Interviewees will be relieved to hear the company is streamlining its interview process. Schmidt said Google has brought poor saps in as many as 16 times before ultimately releasing them back to the wild. Now, he says, Google has analyzed the process and determined a decision should be able to be made in five interviews. (Well, that’s practically nothing.)

Ranked no. 4 on Fortune’s best companies to work for list in 2011 (it spent 2007 in the #1 spot), Google has taken hits to both its reputation and its personnel in recent years. Meanwhile, Facebook is fast emerging as the most highly desirable company for America’s college graduates to work for. But joining the ranks of Google’s 24,400-plus employees still sends many a techie salivating. Case in point, the company received 75,000 resumes within one week in February after announcing it would hire 6,000 new employees for the year in 2011. Maybe they all heard about the to die for reduced-calorie strawberry yogurt in the cafeteria?

Image courtesy of Flickr user bgottsab.

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One of the justifications that Google provided for former CEO Eric Schmidt’s move into the chairman role and the re-emergence of co-founder Larry Page as chief executive was the need to become more flexible by speeding up decision-making at the search giant. BusinessWeek magazine looks at that issue in a new cover story on the company, which describes how Google is trying to save itself from “the ossification that can paralyze large corporations.” But what if Google’s biggest problem isn’t a lack of flexibility or the speed of its decision-making, but a fundamental cultural inability to create new lines of business that can keep the company growing? What if it’s just a gargantuan one-trick pony?

When asked about this possibility last year, Schmidt effectively said that Google might be a one-trick pony, but it’s a hell of a trick (as Oracle founder Larry Ellison once put it). In other words, if you’re going to be a company with just one “trick,” it might as well be one that has revolutionized the world of online advertising, stolen billions of dollars in revenue from traditional media entities and pours vast rivers of cash into Google’s coffers every month, regular as clockwork.

Obviously, Google is doing pretty well with just that trick — it has a market value of $200 billion, and just reported revenue growth of 26 percent for the most recent quarter. Although its search results still need some work (which could cause problems for newly-public Demand Media, even if the content producer disputes this), and there is some competition on the search front from Microsoft’s Bing, no one is going to be writing the company’s obituary any time soon.

But is that enough? It might be enough if all you want is a company that dominates the search-related keyword advertising business. Google will likely fill that role for the foreseeable future, and that’s worth a certain amount — but how much is it worth? Does it justify the price-to-earnings multiple of 24 times that Google’s stock currently trades at? Maybe not. This has been the issue with Microsoft over at least the past decade: The company generates huge amounts of cash, and is profitable as heck, but what investors are willing to pay for has continued to decline. This is why many have started to ask the question: Is Google the new Microsoft?

Google’s biggest problem is that it has consistently failed to produce any new lines of business apart from keyword-related advertising, which still produces over 90 percent of its income. It’s true that — as the company took pains to point out during its recent earnings call — Google is making money from display advertising, YouTube views, mobile, etc. But this is (comparatively, at least) peanuts. The web giant is famous for giving its employees “20-percent time,” and these projects can turn into great services, such as Gmail and Google News — and there’s also the company’s expanding Android efforts and other initiatives. But do these generate new revenue or profits for the company? To the extent that they help drive search traffic, yes. But that’s still just a variation on the same trick.

Even Microsoft has been able to create a new — and profitable — business that wasn’t really related to its core software business: namely, the Xbox consumer-gaming system. Google repeatedly acquires companies like Dodgeball then smothers them, or fails to take advantage of what they bring to the company, or takes their engineers and makes them do other things. And as a result, it has failed to produce a Foursquare competitor, or a Twitter competitor (unless you are one of the five people who use Google’s Buzz regularly), and it has certainly failed to produce anything that has a hope of competing against the social-networking wave unleashed by Facebook.

Is Larry Page going to help the company do any of that? No one really knows. But just getting more “flexible” — whatever that means — or making decisions more quickly isn’t necessarily going to do it. And it is a growing problem, at least for anyone who is (or wants to be) a long-term Google investor.

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Post and thumbnail courtesy of Flickr user Batikart

Just as Silicon Valley was starting to come to terms with the sudden departure of Apple founder and CEO Steve Jobs, another technology giant dropped a bombshell: Google CEO Eric Schmidt said he is stepping down to become executive chairman of the company. Schmidt says he will focus primarily on government relations, while Larry Page is going to take back the CEO role he held until Schmidt arrived to take the job in 2001. Although Schmidt will still be around to advise on various matters, the executive shuffle makes it clear that Larry Page is now in sole control of the web giant. But does he have what Google needs? That’s not obvious.

After the news broke Thursday afternoon, Schmidt posted a message on Twitter that linked to his blog post about the changes, also writing “day-to-day adult supervision no longer needed!” That comment was a reference to the fact that Schmidt — a former senior executive with Sun Microsystems — was seen by many as the “adult supervision” the two young billionaires needed in 2001, when they were planning the stock offering that eventually came in 2004. The memories of the tech implosion of the late 1990s were so fresh still that many clearly felt Page and Brin needed to be stopped before they blew all Google’s money, and since Schmidt looked the part of a senior executive, the company’s backers felt he would go over better with investors.

Over the past 10 years, Schmidt has repeatedly stressed — as he did in his announcement and on the earnings call — that although he was the chief executive, he and the two founders have functioned more or less as a triumvirate, advising each other and debating various courses of action. Schmidt has suggested this is because of the mutual respect each had for the other, but his role was undoubtedly also influenced by the fact that Page and Brin share ultimate voting control of the company, thanks to their majority ownership of Google’s multiple-voting shares.

Now, Page has taken the reins as CEO, and Schmidt made it clear in his blog post about the news that this was done “to simplify our management structure and speed up decision making.” After the split, each member of the triumvirate seems to be taking on the role for which he is arguably the best qualified: Schmidt, who is the most senior (and tends to wear a suit), becomes the public face of the company when it comes to government: meeting with senators who are investigating the company’s privacy infractions, for example, or appearing before congressional committees, the FTC, and so on. Page becomes the day-to-day leader, and Brin gets to spend time on the projects he enjoys (which may or may not include self-driving cars).

How Schmidt performs in the governmental role remains to be seen. He might have to tone down his penchant for inappropriate jokes about how people “can just move” if they don’t want their houses to be photographed by the Google StreetView car, or his comments about how “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.” That’s probably not going to go over well in Washington.

The reality is, Google is facing challenges on a number of fronts. Yes, it turned in another stellar performance in the most recent quarter, with revenues climbing by 26 percent to $8.4 billion. The search-related advertising business is still doing extremely well, and that cash cow has allowed the company to do many other things, including promoting the Android operating system and running a number of popular (but money-losing) services such as Gmail and YouTube. But the tech giant has been unable to get much traction on the social-web front, and that has led to criticism that it’s losing the battle — or is at least in danger of losing the battle — for both users and advertisers to Facebook, whose share of the online-ad pie is growing at a phenomenal rate.

Critics are also getting more vocal about the rapid deterioration of Google’s search results, its core business, thanks in part to the contributions of “content farms” such as Demand Media, with many saying Google hasn’t done enough about the problem because it gains ad revenue from those publishers. Then there are the governmental hurdles Schmidt is expected to help the company leap: a potential antitrust investigation by the Department of Justice into Google’s proposed acquisition of travel-information provider ITA, along with pressure from Congress on the company’s approach to privacy, and continued difficulties with foreign governments like Italy and China.

Larry Page is taking the helm at what could be a turning point for Google. Its core business is under fire; it’s losing ground to Facebook in an important new market; and it’s still relying on search-related ads — a market getting long in the tooth — for 90 percent of its income. It has been unable to build any substantial new businesses, despite a number of attempts, including its recently rebuffed $6-billion acquisition offer for Groupon. As angel investor Chris Dixon put it, some Google watchers are probably asking: Is Page’s return like Steve Jobs coming back to Apple in 1997, or is it more like Jerry Yang’s return to Yahoo in 2007?

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Google dropped a bombshell during its quarterly update by announcing an executive shuffle that will see co-founder Larry Page take the reins as CEO of the web giant, while current chief executive Eric Schmidt assumes the role of executive chairman. Page’s fellow co-founder Sergey Brin is to focus on strategic direction and new projects.

The management shake-up comes as Google announced its fourth-quarter results, with revenue coming in at $8.44 billion for the quarter ended December 31, 2010. That was an increase of 26 percent over the same period in 2009, while operating income came in at $2.98 billion compared to $2.48 billion from the year before.

Page’s move to CEO means he will take charge of day-to-day operations on April 4, while Schmidt will focus on deals, partnerships and government outreach. Schmidt said he will also look at being a technology thought leader while continuing to serve as a mentor to Brin and Page.

Schmidt said in a statement that the move was aimed at streamlining the decision-making process, which has been shared by Page, Brin and Schmidt, and that the reorganization will clarify their individual roles and ensure there’s clear responsibility and accountability at the top. Schmidt said he is confident in Page’s ability to lead and believes the changes will be good for the company.

We are confident that this focus will serve Google and our users well in the future. Larry, Sergey and I have worked exceptionally closely together for over a decade—and we anticipate working together for a long time to come. As friends, co-workers and computer scientists we have a lot in common, most important of all a profound belief in the potential for technology to make the world a better place. We love Google—our people, our products and most of all the opportunity we have to improve the lives of millions of people around the world.

Schmidt joined Google’s board as chairman in 2001 and became the company’s CEO later that year. He leaves just days after rival Apple announced that CEO Steve Jobs was taking a leave of absence to focus on his health.

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Network computer, at the time, was defined as a stripped-down machine, with little or no moving parts, cheap processors and ample bandwidth to compute over the network. It was a computing equivalent of Silicon Valley’s Moby Dick. Larry Ellison, CEO of Oracle was the proverbial Captain Ahab.

Larry “Captain Ahab” Ellison

In 1995, Larry Ellison talked about a network computer that would cost $500 a pop and would free the world from Microsoft. “A PC is a ridiculous device. What the world really wants is to plug into a wall to get electronic power, and plug in to get data,” said Ellison at the time.

His idea was a sound one, though at the time, a tad impractical. Oracle’s Network Computer subsidiary lost $175 million and was eventually spun out as Liberate Technologies, a company that transitioned to building software for set-top boxes.

Nevertheless, the idea had strong appeal for Silicon Valley’s power brokers, and they kept plowing dollars into the network computer. Marc Andreessen was an early champion. What was good for Ellison was good for IBM too. But the guy who was completely besotted by the idea of network computer was Eric Schmidt. It was Schmidt and his cohorts at Sun who came up with Java Station, a disaster if there was any. The Java-based network computer was underpowered when compared to the PCs of the day.

Have a Corona

The network computer hype had died down by 1998, but the Sun team hadn’t given up. They once again went back to the drawing board and started working on a network-business appliance, code-named Corona.

I first broke the story about Sun’s ultra-secret PC killer back in August 1999. Unlike an all-purpose consumer device, it was targeted at the enterprises and was pitched as “zero admin cost” machine. No need for expensive storage — just lean processors with ample bandwidth. It plug into the network and essentially brought up a “state” for folks to start working. You needed a special Java-enabled card that created the “state” on any device, regardless from where you were accessing the data. It was targeted at airlines, retailers and package transportation companies.

Sun eventually called it the Sun Ray, thus bringing a short-term revival of thin clients. Even a new version of Java Station was launched, to no avail. The network computer in early attempts failed because the devices were too expensive when compared to low-cost personal computers and bandwidth was still extremely expensive and the connections, even on corporate networks weren’t fast enough. The software and the experience just weren’t compelling enough, and there were limited use cases for the device.

The Past Is the Future

As Chrome OS was being launched, I couldn’t help but think about the similarities between the two products. The early customers for this new Chrome OS based computer (with no admin-costs) are American Airlines, Intercontinental Hotels and some retailers. Onstage, Schmidt said that he and his peers were talking about these very same problems — total cost of ownership, security and ease of use — when they were first discussing the network computers.

“We were right that the underlying problems really were a problem, but were wrong in understanding how complex the problems were,” he said. Of course, as time passed the networks got faster, the components got cheaper, but more importantly, the rise of AJAX and the evolution of the open source LAMP stack allowed the idea of web-based applications to blossom. And from there, evolved the idea of a web-based operation environment/system. “Chrome finally broke through architectural frameworks with respect to speed and security,” a beaming Schmidt said. “It is now finally possible to build powerful apps on top of a browser platform.”

Schmidt believes Chrome OS is the third viable real operating system, one that breaks from the past, and looks into a cloud-services centric future that would re-define the idea of what an OS should be.

With Chrome, Google has done a good job of executing on the idea of “network computer,” offering a suite of cloud services. In 2008, I wrote up a list of ten features that a good cloud client must have — Google has done one better with their prototype device, the CR-48.

“The long term vision of browser as an OS for web applications” said, Sundar Pichai, Google’s vice president of Product Management for Chrome said. Making browsers speedy and responsive to today’s web tasks, they have made it possible to do more inside the browser.

I was particularly impressed by the improvements they have made to JavaScript, a boon for web applications. Other extensions that tap into the hardware for graphical improvements will only going to make the browser more desktop-like. Pichai has to feel good — he is helping realize his boss’s vision for the network computer. Too bad, Schmidt and Ellison are not talking to each other anymore.

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Colbert is pretty good on his tech stuff, and the 5-minute video certainly made me giggle. Schmidt says his recent comment about young people changing their names to escape their indiscretions captured on the web was a joke. He also states “We actually don’t do data mining” much more resolutely than I would expect, considering all the ways Google uses data to make its products better.

Colbert: Would you help me erase my browser history?
Schmidt: I would encourage it
Colbert: You have been checking my searches!

Here’s the segment:

And here’s the creepy ice cream ad:

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McAdam’s appointment is sure to have implications far beyond Verizon, however. It’s no secret that McAdam and Verizon Wireless are partners with Google’s CEO, Eric Schmidt. McAdam and Schmidt teamed up back in 2009 with news of Verizon’s commitment for Android-powered smartphones on the Verizon network. With no Apple iPhone to offer, Verizon needed a comparable mobile platform, and Google needed a carrier partner to help Android gain traction. Although Android has grown market share beyond iOS and BlackBerry for many reasons since then, McAdam’s commitment to a large array of Android devices helped jumpstart the Android army in the U.S. That relationship is sure to continue, as McAdam recently admitted that his company is working with Google on an Android tablet.

Such growth of Android may be good for developers looking for a profitable future and customers who want a compelling choice in smartphones (and tablets), and Verizon is happy to sell you one, of course. But the bigger concern by this tech “bro-mance” deals with net neutrality. Google and Verizon have jointly outlined a stance on net neutrality and that stance allows wireless carriers to manage network traffic as they see fit. In fairness, it was Verizon’s Seidenberg that publicly penned the company’s net neutrality suggestions, but make no mistake: McAdam will continue down the path of protecting Verizon’s wireless assets with the help of Schmidt at Google.

Google wants the world to use it as a search engine and suite of web apps to beget ad income, which last year accounted for 97 percent of revenue. Verizon will be moving towards a tiered pricing bucket for wireless data and is even offering cloud-based services that compete against third-party developers on its mobile network.

Aside from naming McAdam as the future leader of Verizon and the broader industry implications, the news also illustrates the lightning-fast pace of a wireless world. It was only back in 2000 that McAdam was tapped as the executive vice president and chief operating officer of a brand new entity called Verizon Wireless. In the span of a decade, a mobile company was created to complement a wired parent, and now the child is ready to lead the future.

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Schmidt calls these converging phenomena the “age of augmented humanity.” He spoke of the growth of broadband, connected devices and computing power to envision what’s next after search; to my biased ears, it sounded like a pitch-perfect GigaOM guest column. “The computer and the human each does something better because the other is helping,” Schmidt said today in a keynote speech at the IFA consumer electronics conference in Berlin, tying together Google’s efforts in artificial intelligence, smartphones and connected devices. You can watch full video of the keynote here.

Schmidt gave credit to Bill Gates for proposing the idea of “information at your fingertips” at COMDEX back in 1990. “We’re nearly there now, which is what’s so profound,” Schmidt said. “You can literally know everything.”

Google is moving to make search faster, more personal, and more automatic, Schmidt said. For instance, as a lover of history, he wants his phone to spout random facts as he walks around Berlin. His phone should understand what he wants to know before he thinks to ask, and what he really means. “When you ask what’s the weather like, what you’re really asking is, ‘Do I wear a raincoat or do I water the plants?’” Schmidt explained.

The next expressions of this theory, Schmidt said, are things like autonomous cars and the growth of real-time telemetry. Google Product Management Director Hugo Barra demonstrated an upcoming feature called “conversation mode” in Google Translate, where a user can interact with someone in a different language by speaking into a mobile phone and having software on the phone itself translate and speak on the fly. “This really is history,” Schmidt said of Barra’s working demo. However, Google won’t be connecting personal information to the real world via facial recognition, which Schmidt said is “just too creepy.”

Monetizing “augmented humanity” will require large existing businesses that depend on the economics of scarcity to change to the “economics of ubiquity,” Schmidt said, where greater distribution means more profits. He cited the (long-expected) successful monetization of YouTube as an example. “Augmented humanity” will introduce lots of “healthy debate” about privacy and sharing personal information, and it will be empowering for everybody, not just the elite, Schmidt said, paying tribute to hot-button issues in Europe where the IFA show was held.

In the course of the speech, Schmidt offered a number of data points to strengthen his argument, some of which provide new insight into Google’s business:

• 1 in 3 queries from smartphones are now seeking information about nearby places
• Google’s mobile search traffic grew 50 percent in first half of 2010
• Chrome is four times faster than two years ago (“Deeper integration with browsers means more autonomous actions,” Schmidt said — and less reliance on apps)
• 1 in 4 searches on Android in U.S. comes from voice
• YouTube gets more than 2 billion views per day, 160 million mobile views per day and 24 hours of video uploaded every minute. It has more than 2 billion monetized views per week, and the number of advertisers on the site is up 50 percent in last year. DoubleClick serves more than 45 billion ads per day, with 94 of top 100 Ad Age advertisers. (i.e. the future will not go unmonetized.)

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If you’ve got a one-trick pony, you want the one we have. We’re in the ad business, and it’s growing rapidly. We picked the right trick.

Schmidt hopes display advertising and mobile will turn into two $10-billion dollar opportunities for the company:

‘If we have a billion people using Android, you think we can’t make money from that?’ Schmidt asked rhetorically. All it would take, he said, is $10 per user per year. Among other things, Google might earn such sums from selling access to digital content from newspapers.

Damn shame, a vast majority of those billion would be using a version of Android that doesn’t have anything to do with Google. Or that most of those billion pay less than $5-a-month to their phone companies today.

Pony image courtesy of Flickr user, Mariacecita under Creative Commons