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Last Updated: Friday, 17 March 2006, 15:32 GMT
Google Charm makes its debut

By Guto Harri
BBC North America business correspondent

Google has just unveiled a new product. Called Google Charm, it was revealed to eight journalists at an unprecedented lunch in New York.

Google chief executive Eric Schmidt
Google's boss is mysterious about his firms hunger for "dark fibre"

"Fancy lunch with Eric Schmidt?

"Our chief executive will be in our office on Times Square this Thursday. Come early and we'll show you around."

Not many journalists could resist an invitation like that.

Google is notoriously secretive. Briefings and meetings are extremely rare, so sharing a roast beef sandwich with the boss inside the firm's east coast headquarters seemed too good to be true.

Having been told this was a tiny office for a handful of sales and marketing people, I was astonished to find 250 computer engineers and product development staff, scattered over five spacious floors.

Complete with plenty of those special Google touches.

There were private telephone booths with a spot on the wall to rest your feet. I passed a vibrating chair where one smiling worker was chilling out.

Charming and candid

A sign pointed to the massage room where every one-hour slot was booked. No-one was playing basketball, but the equipment was there.

And there was plenty of healthy, tasty food.

Robert introduced himself as the chef and checked we were happy before Eric Schmidt entered the room, greeting us warmly as if this was a regular event.

He was charming and candid, which journalists value greatly.

Sergey Brin and Larry Page
Google's founders agonised over their move into China

Did you know, for instance, that Google agonized for a year before agreeing to censor their searches as a condition for opening up in China?

Did you know that a thousand people were involved in the decision at different stages - encouraged to argue every point passionately?

Hard decision

Did you know that Larry Page, Sergei Brin and Eric Schmidt took 12 months to overcome their fundamental disagreements with each other?

I had always imagined it was a tough call, but now I knew.

"It was a hard call, but a clear call," he said.

This lunch was on the record, so I can tell you that the chief executive of Google sees this as the most controversial decision the company has ever taken.

He was swung, he says, by considering the alternative.

Google provides access to information. Information, it believes, is empowering - and not having access to the best information available is a denial of your human rights.

By this reasoning, Google would be infringing the human rights of a billion Chinese by NOT being in China. Better, then, to agree to some government censorship than deny people access to any information available through their search engine.

Fidel's in charge

One parallel, Mr Schmidt playfully suggests, might be Cuba.

"Last time I checked," he says, "Fidel Castro was still in charge."

In other words, a US embargo that has gone on for decades has done nothing to shift him. But it has trapped the people of Cuba in the 1950's.

The argument clearly has merit, but most journalists have an inbuilt inability to believe that huge companies are motivated by an altruistic urge to make the world a better place, rather than to make money for themselves.

Even a company started by two students with a mission statement to "do no evil".

Eric Schmidt suggested the revenues from China were relatively small at the moment, but recognized that Google had set itself up by claiming to be different to other companies.

Google's Chinese homepage
Google is letting Chinese authorities censor its search results

"It worries me that the halo is off," he said, acknowledging the widespread disappointment among Americans at its decision to sign up to censorship in China.

But he also invited us again to "hold Google to a higher standard".

So what about money? Recent hints from another Google executive that future revenue growth would be "organic", rather than gravity-defying, prompted a sharp fall in the firm's shares.

Dark fibre

Eric Schmidt painted a very different picture.

Google Video, he said, has been a big hit and has huge potential. Google are eager to offer more of it and cash in on the proceeds.

We're told that a new deal with Time Warner is very close, and Google would clearly like that to gain access to the Warner Bros film archive.

That could mean customers paying to download a movie, or being forced to watch a video advert before the film.

In every case, that choice will be left to the video provider, with Google taking a cut either way.

Google is also working out how it can turn itself into a global retailer, so that customers can not only search for something but buy it from them in a few clicks.

Its enormous and expanding database could clearly make the company many more millions.

So, what else are they up to?

More staff are being taken on every month in New York than in California.

Google's sign outside its Googleplex HQ
Google is on a hiring spree for its New York offices

Google is buying a new business every week.

And in recent years it has built up a huge reserve of "dark fibre" - unused network capacity available to transport vast volumes of data across the internet.

Microsoft is clearly considered the main rival, and we're likely to see Google move more tanks onto Bill Gates's lawn. Indeed, references to Microsoft's co-founder and his empire always come with subtle but loaded asides.

Microsoft Office, we're told, is a "tremendous franchise", but it's very expensive. Fine if the New York Times pays for it, as one of my lunch colleagues is told, but what if you have to pay for your own software?

"Yes, our mission to organize the world's information, and that means personal information too." So we can expect more "server-based" tools such as calendars, file storage and small ads, in the near future.

That said, however, no-one is exactly sure what Google really wants to do in the future. Speculation among experts is rife about what the company wants with all that dark fibre - but in the end, your guess is as good as mine.

But that's fine with Google.

"The mystique works to our advantage," says Eric Schmidt, shaking our hands as we leave the room half an hour late.

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