Google CEO Eric Schmidt Appears In Traverse City, Michigan.

Eric Schmidt of Google Says His New Office in Ann Arbor Michigan Office is Doing Very Well.
The chief of Google says the Internet company's Ann Arbor business is "doing very well" and is growing "as fast as we can train people."

Eric Schmidt, CEO of Google, said after addressing the nation's governors about economic innovation in Traverse City that he's convinced Michigan has the educated work force needed to fill 21st Century jobs, including the jobs at the Google advertising sales office in Ann Arbor.

"It's growing very rapidly. We're clearly going to expand it," Schmidt said.

John Burchett, lobbyist for Google and former chief of staff to Michigan Governor, Jennifer Granholm, said the company now has 150 employees. When Google announced a year ago it would open the ad sales arm in Ann Arbor, officials projected 1,000 people would eventually be hired.

Schmidt said Google is finding the work force it needs in and around the University of Michigan campus and hasn't had to import employees.

"There's a physical limit to how fast you can grow," Schmidt said. "You can get the office space but it takes time to train employees."

Schmidt recently visited his new Ann Arbor AdWords operation and reported "the energy level as pretty phenomenal." He said Michigan is doing some of the things to entice cutting-edge companies like Google to come to the state, including promoting broadband technology and offering a "very searchable" state government data base.

Michigan should take heart, Schmidt said, that even though its economy is languishing and unemployment here is among the highest in the nation, "the barrier to entry for an entrepreneur now is the lowest it's ever been. Smart people here can create new companies and new jobs with less money."

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Schmidt and AT&T CEO Randall Stephenson Spoke at The National Governors Meetings in Traverse City, Michigan.

Both CEOs told the nation's governors: That America's Schools don't make the grade.

The Two titans of the high-tech economy told the nation's governors on Saturday that their states are not doing enough to educate students for technology-heavy jobs or to clear the way for investment by their companies.

"We're not competitive in our education programs," Randall Stephenson, chairman and chief executive of AT&T, told the National Governors Association.

"Our education system is falling flat."

Stephenson also had tough words for states that he said put up regulatory roadblocks to investment by companies such as his. Asked by Tennessee Gov. Phil Bredesen what role states should play in monitoring or regulating the spread of broadband technology, Stephenson said, "Increasingly, your role is ... to stay out of the way."

The AT&T chief and Eric Schmidt, chairman and CEO of Google, spoke to the opening business session of the governors' 99th annual meeting at Grand Traverse Resort in Traverse City - a hotbed of leading tech companies in Michigan - the session focused on how states can boost business innovation and economic growth.

Both had plenty of advice, suggesting that governors' most important role was to boost education and knock down regulatory walls.

Schmidt, a pioneering Internet executive, encouraged states to show more daring in looking for better ways to increase student performance in public schools.

"Almost anything we try is going to give us more information," Schmidt said. "Why not simply try five different things and see what kind of results you get?"

But it was Stephenson, who has held the top job at AT&T for less than two months, who had the toughest words for the more than 30 state chief executives in attendance. He said that an AT&T agreement with its largest union to bring back 4,000 jobs that had been outsourced to India was struggling because of faulty U.S. education standards. "We're struggling to find qualified candidates to fill those 4,000 jobs."

He praised Michigan and other states that have consolidated franchising processes for cable television, allowing companies such as AT&T to work out blanket agreements with state governments rather than individual deals with dozens of cities and counties. But when several governors -- including the Democratic Bredesen, and Vermont Republican Jim Douglas -- asked if states shouldn't establish rules to protect consumers or require companies to extend broadband lines to rural areas, Stephenson pushed back. He said the best thing governors could do to encourage economic growth was to knock down regulatory barriers.

Google Releases New Custom Search Business Edition For Small Business Websites .

New Tools are Cost-Effective and Powerful.

Google launched Google Custom Search Business Edition, a hosted service that lets small businesses quickly and easily add Google search to their Web sites.

A follow-up to the Custom Search Engine Google launched in 2006, Custom Search Business Edition includes site search hosted by Google so small business owners can skip installing and maintain their own costly site search technologies.

While the original Custom Search Engine and the new business version both offer search results customization, analytics, and site traffic reporting features about visitor behavior, the Custom Search Business Edition has some key differences. These include the option to turn off ads, e-mail and phone support from Google's Enterprise Search, and business integration features through an XML API.

The goal of Google Custom Search Business Edition is to alleviate the pains many small businesses face in trying to allow customers to search their Web sites to get information or buy products.

Many of these businesses are spending money on AdWords search advertising and google search engine optimization to help in-market customers find their websites, but once customers find them, navigating among the unfamiliar products or services can be a chore.

Google is positioning the Custom Search Business Edition as a salve for the navigation issues. Search rivals Microsoft and Yahoo are also targeting this dilemma. Nitin Mangtani, product manager for Google Enterprise Group, said the original free Custom Search Engine "doesn't completely appeal to every small business web site."

"There are a lot of legitimate businesses which spend money on bringing visitors to the web site and they want search results but no ads," Mangtani explained. "And they want support. They need somebody to talk to, especially companies with no IT."

Custom Search Business Edition starts at $100 a year for searching up to 5,000 pages, and extends to $500 for 50,000 pages. Google will support larger volumes of pages through its enterprise sales group for businesses that require it.

Mangtani also explained Google's cost-effective pricing scheme. "For us to go after the millions of sites with just 500 or a thousand pages, we needed a product with a very low total cost of ownership; $100 per year makes sense. You can only offer that price point with a hosted solution. That's why the need for creating a business solution which is in between the free and business appliance product line."

The appliance product line Mangtani referred to includes search offerings from the Google Enterprise group, including the Google Search Appliance and Google Mini, both of which offer more control over security, as well as search crawl depth and timing.

With Custom Search Engine, Custom Search Business Edition and the appliances, Google's enterprise search portfolio covers anything from mom-and-pop shops to small business sites and large companies.

Which is exactly what the search giant needs to better compete with Microsoft, which recently updated their small business hosted search program.

Microsoft said it has added Ask.com's Sponsored Listings to its adManager Beta search advertising service, which enables small businesses to purchase and manage search-based keyword advertising from the Microsoft Office Live platform.

Ask Sponsored Listings (ASL), an automated, auction system that allows search marketers to purchase, manage and optimize pay-per-click and contextual keyword advertising campaigns, will join the MSN network and Live Search as distribution sources for Microsoft Office Live customers' search ads. Ask.com claims they are reaching over 59 million monthly unique users.

Google, MSN, and Yahoo Asked to Modify Retention of Personal Search Data.

Developments occurred in China this week regarding keyword search and retenion of personal search data by search engines.

The Taiyuan University of Technology is testing software agents that crawl through any search engine looking for searched keyword results as well as any personal data that's been collected about the searcher. Recap of InformationWeek story.

As regulators in the European Union press the major search engines like: Google, Microsoft, and Yahoo to modify their policies for retaining personal data, scientists at China's Taiyuan University of Technology are researching new ways to collect and correlate data about Web surfers to provide more precise keyword search results.

The Taiyuan University of Technology research is testing software agents that crawl through any search engine looking not only for searched keyword results but also for any personal data that's been collected about the searcher.

The goal is to use information about the surfer's background or interests, blended with search history information and filter search results accordingly.

While this research may still be in the workshop in China, it's not likely to sit well with European regulators. The E.U.'s Article 29 Working Group, a collection of national officials from European countries that advises the European Union on privacy policy, is already investigating the privacy policies of Google, Yahoo, and MSN and evaluating their data protection issues.

Google is the first major search engine provider to offer some visibility into its data retention policies, but the Article 29 Working Group wants the search engine to go further. Google in May provided the group with information about how long it stores server-log information.

The company's policy is to "anonymize" server logs that are older than 18-24 months, a practice that the group said, in a letter to Google Privacy Counsel Peter Fleischer. Google will not specify the purposes for which server logs are kept.

The group does like Google's plans to use more anonymous data, but notes that even "anonymized" data can still contain the user's network prefix. There are also concerns that Google can reverse the process used to make users anonymous when it wants more info about a surfer. The group has pointed out that, even though Google is based in the United States, it is legally obligated to comply with European privacy laws.

The same applies to Google's competitors in the search market, including Microsoft and Yahoo, neither of which has specified any time limits on the data that they hold on users.

More than 60% of all keyword searches are conducted using the robot powered Google search engine, while Yahoo is used about 21% of the time, and Microsoft MSN/Windows Live Search is tapped about 8%, according to the Nielsen//NetRatings MegaView Search report.

Search data privacy concerns are likely to be perceived differently depending upon many variables, in general baby boomers have a greater expectation of that a Web site or search engine will keep their information confidential, unless the user explicitly gives permission to share that information. Indeed, user demographics are likely to play an important role in the future of privacy on the Web when permissive data sharing is involved.

The E.U. is more concerned with the subtle aggregation, requirements management software and sales of search data, and it's going to continue to press the major search engines until they come clean.