America’s Choice: The Google Way or Xerox Way?


Today, Google CEO Eric Schmidt who is also Chairman of the Board of Directors at the New America Foundation (where I work) will give a speech and answer questions at an event organized by my organization and which I will stream live here at The Washington Note from 1:00 pm til 2:30 pm EST.
eric_schmidt_logo.jpgSchmidt’s talk is titled “Technology, Economic Growth, and Open Government.”
But it might just as well be called “America’s Choices: The Google Way or the Xerox Way?”
With all due respect to Xerox Corporation management (and I have been a stockholder of Xerox for about the last eight years), Xerox is a big company with a lot of assets that just sort of goes nowhere. To me it looks like an under-performing firm that used to have potential that just never gets performing. Its stock performance has shown the collective view that it probably won’t re-wire itself for strong future growth.
Google, in contrast, is a firm that has some weight and a lot of assets, but the valuation that it has in the market place, even in these stressed financial times, is based on the promise of strong future growth and of a firm that is constantly re-creating itself and opportunities to help design a bold and different future. Growth, promise, creativity all help make Google have a bigger economic footprint and valuation that many firms with the same income level and same general level of held assets.
But interestingly, Barack Obama had the CEOs of Google, Xerox, and the Chairman of Time Warner on stage with him after his meeting with his senior economic advisory team. Time Warner is another stock I’ve just held way too long that has gone nowhere. In corporate metaphorical terms, Obama had America’s past and present with him — and hopefully its future.
While I think there are future problems with Google — like how much information we want to allow one big firm to have on us, our libraries, and all of human knowledge and whether a 900 lb. Google should be able to secure rules that benefit the Google World but not the AT&T or other infrastructure worlds out there — I think that there’s little doubt that it is an amazing firm that has captured the imagination of many who use its products and are investing in the promise of that into which it is still “evolving.”
In a similar sense, China is considered to be globally important today because of the promise of what it is evolving into down the road. China is the “google among nations” today, and America looks a lot like Xerox — both very big entities with lots of assets that have been systemically underperforming.
It’s going to be interesting to see if Barack Obama and his team can absorb and deploy some of the futuristic techniques of a Google like approach to the world’s complex challenges. If not, then they’ve also got Anne Mulcahey (who actually is a great person — I just have problems with how her firm is running) to give advice.
I’ll be watching Eric Schmidt — who for the record has been a member of the Board of New America Foundation since the beginning when he was then CEO of Novell — from Madrid, Spain where I’m speaking for a London School of Economics Forum on “Barack Obama’s Foreign Policy.”
(I’ll post the video clips later here for people to watch after the fact.)
— Steve Clemons


13 comments on “America’s Choice: The Google Way or Xerox Way?

  1. barrisj says:

    Anyone check the price of Google stock recently? Down about 2/3 from its high of a year ago, and up only about 2.5X since its first trading day. They tried to tell you that the business model could ride out economic ups and downs, that and their diversification into other net portals would continue to pile double-digit growth into the future. Well, a lot of the “diversifications” haven’t exactly been monetized to the degree expected, and as just about everything else launched
    post-2000 meltdown, after a fairly good run, GOOG has now gone “mature”, and shortly will be considered this class’s Microsoft: big on cash accumulation, big on monopolistic practices, small on innovation.


  2. Mr.Murder says:

    We must kill health care in order to save it!
    Et tu, Tom?


  3. John B. says:

    hey Steve,
    Eric Schmidt is from my town of Blacksburg, VA. Grew up here. He was just here campaigning for P-E Obama right before the election. Maybe you would consider coming down sometime and giving a talk. It’s a nice university small town and there would be plenty of folks who would like to hear what you might have to say.
    Best regards.


  4. steve clemons says:

    WigWag — thanks for the correction. steve


  5. James Atkinson says:

    Credit where credit is due. Anne Mulcahy was shoved onto an extremely tattered Xerox throne in 2001. She moved quickly to reduce overheads, re-negotiate revolving lines of credit, marry up with GE to replace Xerox Capital, establish and enforce modern business practices within the company, navigate through an ongoing SEC investigation, and launch respectable product lines year over year.
    I was with the company during this time and marveled that she didn’t just shoot herself and be done with it. Things were impossibly bad, and corporate debt precluded “resolution via acquisition.” Nothing to do but march.
    Xerox remains a company with deep problems of internal culture, but it’s a going concern and paying a dividend, which is more than anybody could have predicted in 2001.
    Folks who inherit shit but manage to sell manure at a profit could be very helpful to President Obama.


  6. Spunkmeyer says:

    HP is another example of a company that was reduced to a
    shadow of it’s former self. They used to be a major “skunkworks”
    company — one that was reduced for a time to licensing the iPod
    from Apple to brand it as its own.


  7. davep says:

    Xerox has a very sad story.
    They basically invented the modern office computing environment: ethernet, bit mapped graphics displays, the WIMP (windows, icons, mouse, pointer) interface at Xerox PARC. Small minded execs @ Xerox thought it was worthless since it wouldn’t sell copiers.
    Actually, with all due respect to Doug Englebart, they really just made it affordable and practical. Please watch this
    to see just how far ahead of his time someone can be.
    He got it all, except for the bit mapped graphical displays. Voice comm was over regular phone lines vs IP, but I’m willing to let him slide on this one. He dropped his research because of his small minded contemporaries’ ridicule.
    E Pleb Neesta
    “It’s just business.” — Middle Class, Inc.
    Blessed are the cheese makers.


  8. WigWag says:

    Actually, Steve, not to be picky, but the CEO of Time Warner was not on the stage with Obama, the Chairman (Dick Parsons) was. Parsons was the CEO of Time Warner until late last year when he was replaced by Jeffrey Bewkes. Last November, Parsons relinquished the title of CEO but he is still Chairman of the Board.


  9. rich says:

    Didja hear? The Senate just revoked Joe Lieberman’s Senate Gym privileges!
    This is why the Senate is not a serious body. It was never about ‘retribution’; it was about loyalty and accountability. After all Joe Leiberman’s lip service to bipartisanship, we saw and felt Leiberman’s highly partisan language–for the other side. Putting a stop to it can in no way be called revenge or partisan–it’s quite the opposite.
    This is another reason John Kerry wasn’t a decent choice in 2004–and that has everything to do with it. We’re not seeing any decency from Kerry, or the Senate Dems—or, for that matter, Joe Lieberman. He now has license to abuse his nominal allies. Not that he needed one.
    Would a Republican put up with this? You’ve gotta ask, What would it take?


  10. ... says:

    in some respects xerox and google share a lot in common.. one the romance has long worn out, the other still has a ways to go to get their…


  11. Mr.Murder says:

    Google has lived in a deregulation bubble that allows its stock to balloon past realms of credibility.
    It matches this an adherence to whatever regional whims a government cares to overshadow free information exchange with.
    See also China(or, from there, not at all).
    See also AWOL Bush, the Miserable failure.
    Got ideals and standards? Not exactly….


Add your comment

Your email address will not be published. Required fields are marked *