Schmidt to chair influential think-tank

AS if he didn’t have enough influence as influence as CEO of one of the most powerful companies in the world, Google’s Eric Schmidt has been elected to chair an influential Washington politico/economic think tank.

Mr Schmidt was elected this week as chairman of the New America Foundation’s board of directors. The foundation bills itself as non-alligned politically and says it invests “in outstanding individuals and policy solutions that transcend the conventional political spectrum.”

He takes over the unpaid position from July 1, and is understood to be planning to focus on evolving a “digital think tank” model that will use new technologies to improve the Foundation's reach.

Mr Schmidt’s election follows the arrival last September of Pulitzer Prize-winning journalist Steve Coll as the president and chief executive of New America, which has a $13.5 million annual budget, 75 staff members and 25 fellows. The group's policy issues also include economic growth, foreign policy and trade, among others.

The think tank has supported using unused and unlicensed television airwaves to transmit high-speed Internet service as well opening up some airwaves in a spectrum auction that would allow consumers use any cell phone or service they want on the resulting network. Google supports both initiatives.

The 17-member board also includes Francis Fukuyama, the noted economics professor with the Johns Hopkins University, Bernard Schwartz, former chairman and chief executive of satellite maker Loral Space & Communications, and Fareed Zakaria, editor of Newsweek.

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Google misses profit target

MARKET wunderkind Google has narrowly missed analyst’ profit expectations for its fourth quarter, disappointing a market already concerned that the US economy will hamper growth.

It was hardly a shock. Google net revenue missed analyst expectations by US$60 million (A$67 million), or just 2 per cent. And this was on revenue that totaled $4.83 billion – a 51 per cent increase over the year-ago quarter.

Rather than taking the shine off Google, however, the market seemed more concerned that the result amounted to more evidence of a troubled US economy.

Google chief Eric Schmidt said the company was happy with the result. But some in the market say the disappointment merely points to concerns that the company will not be able to sell as much online advertising as expected as the US heads toward an economic slowdown.

“We're very pleased with our performance this quarter,” Mr Schmidt said.

“It reflects strong momentum in our core business, growing receptivity to our new business initiatives, and improved discipline in managing our operating expenses.”

Reports say some investors are also concerned about Google’s participation in the Federal Communications Commission’s spectrum auction, which will ultimately cost the winners at least US$4.6 billion. Google is bidding on bandwidth with the view of establishing a national wireless broadband network.

Google’s share price rose US$16 dollars to more than US$564 in steady trading on Thursday before the announcement, but took a pounding – losing US$45, or about 8 per cent – after the fourth quarter results were announced.

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Google confirms wireless spectrum bid

SEARCH leader Google has confirmed it will participate in the US Federal Communications Commission’s spectrum auction – underlining the company’s interest in entering the wireless voice and data device markets.

As part of the US’ mandated transition to digital television, the 700 MHz spectrum auction – which begins January 24, 2008 – will free up spectrum airwaves for more efficient wireless internet service for consumers.

Bidding for the spectrum will start at a reserve price of US$4.6 billion (A$5.2 billion). Google announced it will enter the auction without the assistance of a partner. Some industry observers had thought the company would partner with a telecommunications firm for the auction.

The auction stipulates that part of the spectrum be used for open access purposes – under which the winning bidder is compelled to give customers the right to download any application they want on their mobile device and the right to use any device they want on the network.

“We believe it's important to put our money where our principles are,” Google chairman and chief executive Eric Schmidt said. “Consumers deserve more competition and innovation than they have in today's wireless world.”

“No matter which bidder ultimately prevails, the real winners of this auction are American consumers who likely will see more choices than ever before in how they access the internet,” Mr Schmidt said.

The 700MHz spectrum is attractive to communications companies as it wavelength travels long distances and easily penetrates obstacles like concrete walls. This means the spectrum requires fewer communications towers and is therefore cheaper.

Regardless, a national wireless network would be expected to cost the owners an additional US$7 billion.

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