As a followup to Google's announcement of their Venture Capital department last week, Google CEO Eric Schmidt announced today the acquisition by Google of Microsoft in a stock swap of 10 percent of Google stock for all of Microsoft. In a separate release, Google detailed their purchase of General Motors.
After searching for Schmidt's private cell phone number on Yahoo!, I caught him during breakfast this morning. My first question, of course, was why buy Microsoft when Google seems to be getting the upper hand anyway.
ITW: Why Microsoft, and why now?
Schmidt: “Remember when we first met, I was CEO of Novell,” said Schmidt. I could hear a smear of cream cheese sliding across a toasted bagel as he spoke. “Microsoft tried to crush me then. Now I'm in a position to return the favor.”
ITW: Will Microsoft remain a subsidiary or become fully integrated into Google?
Schmidt: Most of the employees will stay in Redmond, but I'll move Ballmer down here. He has to teach me the Monkey Boy Dance for our next shareholders meeting.”
ITW: Why GM?
Schmidt: “Am I the only one who noticed GM is asking for far more bailout money than the total price of 51 percent of their stock? We give you the tools to look these things up, and you still don't figure that out? And the factory space that isn't making cars can become more Google data centers.”
ITW: What do you guys know about building cars?
Schmidt: “We have seven vice presidents of Engineering. Seven is a lucky number. We'll figure out how to make cars faster and cheaper than GM has been doing. We run the Internet, so we can certainly run an assembly line. And we can certainly get better ad penetration than they've been doing lately.”
ITW: Finally, why Microsoft and GM at the same time?
Schmidt: “Remember that old joke that went around a few years ago imagining if General Motors was more like Microsoft? If you don't remember, Google it. Anyway, Larry and Sergey and I thought it would be really fun to lock Microsoft people and GM people in a building until they make software more reliable and cars cheaper and more flexible.
ITW: How long do you think they'll have to stay locked up?
Schmidt: “Until they make Microsoft software reliable. Could be a long, long time.”