The following is from a talk at the New York Public Library.
ERIC SCHMIDT: But in fairness to those people[finance people], had they come to Silicon Valley in 1999 they would have received a far greater payoff during our little bubble. So who are we to criticize the Wall Street folks for having their bubble? It was just a bigger bubble.
WALTER ISAACSON: Do you think though that Google creates something that’s more real than somebody on Wall Street creating a financial instrument?
ERIC SCHMIDT: To be honest, not really. When I walked into the company, I said, “People pay you for this thing, these little ads?”
Eh, I don't see how candidness and an eagerness to question his own model by Schmidt changes the value proposition at all. Almost all of the time, an ad click is creating value (or a fractional expected value) where there wasn't some before, unless you have a 0% conversion rate.
Meanwhile, a huge chunk of Goldman's activity as I understand it is simply taking the "dumb money" on Wall St. Nibbling the edges, taking pieces of trades by less sophisticated investors. That's not necessarily value creation, and much of the time it can be straight extraction from the rest of the economy.
Not that ads won't get there of course - they're well on their way already with various exchanges. But presently, they have to actually be creating other economic value via conversions in order to exist.
ERIC SCHMIDT: But in fairness to those people[finance people], had they come to Silicon Valley in 1999 they would have received a far greater payoff during our little bubble. So who are we to criticize the Wall Street folks for having their bubble? It was just a bigger bubble.
WALTER ISAACSON: Do you think though that Google creates something that’s more real than somebody on Wall Street creating a financial instrument?
ERIC SCHMIDT: To be honest, not really. When I walked into the company, I said, “People pay you for this thing, these little ads?”
http://www.nypl.org/sites/default/files/events/live_2009_11_...