thanks, anderson. for the first time ever, google opens its new york headquarters to cameras. executive chairman eric schmidt gave me an exclusive tour. we talked about whether america is still number one. and, yes, he has a categorical answer to that. also, free food and the u.s. drone in iran. breaking news. a possible deal to prevent a government shutdown tonight. and the final republican debate before the iowa caucuses. let's go outfront. hello, everyone. i'm erin burnett. outfront tonight, the republican candidates for president have just finished debating in iowa. this is important, because it's the last day before the iowa caucuses, just 19 days away. and while newt gingrich remains

the national front-runner, he has been losing steam. take a look at the latest poll. this is a gallup poll that shows in the beginning of december, just ten days ago, 37% of republican voters say they will pick newt. 22% picked mitt romney. but here's how it looks now. newt's number has dropped to 29%. romney, as no doubt he's incredibly frustrated by, remains the same. but it doesn't go down, remains around the same, 24%. as we've seen in this race, anything can happen in the next few weeks. the swings have been dramatic and certainly didn't require 19 days. so how did the candidates do at the debate tonight? game changers? joining us now, john avalon, contributor. david frum, former speechwriter for george w. bush, and ron christie, national republican editor for govote.com. good to have all of you with us. let's get straight to it. first, let's start with newt. since he's been dropping in the polls, here's how he responded to a question ability electability by brett bauer on fox news channel. >> i think i can debate barack

obama, and i think in seven three-hour debates, barack obama will not have a leg to stand on in trying to defend a record that is terrible and an ideology that is radical. >> well, maybe because barack obama will be tired and need some water after seven-hour debates. but we know newt can talk for a long time, and so can the president. >> he can. but erin, that's never going to happen. we've seen the former speaker's numbers really start to drop, because the more people hear about him and the more the media really scrutinizes his record, people say, is this the best man to lead the country? i think the debate will never happen. people are looking now and saying, we need pragmatic republicans who can lead us forward with really responsible ideas. i don't think they think that newt gingrich is necessarily the guy. he might have the ideas, but does he have the leadership? >> david, the "national review" emblazoned on their website in red, "against gingrich." the anti-endorsement. a scathing review.

the backlash is growing. but the question is, will it really move the polls? what regular voters want? >> i think last week's question was, can newt gingrich possibly deflate fast enough to save mitt romney? and this week's answer is, yes, he can. it's like the polls are saying, the republicans who are answering these polls you highlighted just a minute ago are saying, oh, that newt gingrich? we don't like that guy. we thought you meant some other newt gingrich. he had a terrible debate tonight and reminded people 21 hours of newt gingrich on television against barack obama, not a good idea. newt gingrich thinks he wins the debate by conveying how smart he believes he is. no matter how little you like him, and no matter how little he has to connect with your conservatives, that's not how you win debates. and by the way, one weird thing from tonight's debate. did my ears deceive me or did newt gingrich at one point endorse franklin delano roosevelt's court-packing plan of 1947.

that's a strange thing. >> which leads me to what he did say in the debate, responding to critics who say he's not conservative enough. here's what he said. >> i think on the conservative thing, it's sort of laughable to suggest that somebody who campaigned with ronald reagan and with jack kemp and who has had a 30-year record of conservatism is somehow not a conservative. >> he lost no time comparing himself to ronald reagan, right out of the gate. but, look, what we're witnessing right now is a conservative establishment collectively freaking out at the prospect of a newt gingrich nomination. so they're doing everything they can to stop it. look, his strategy has always been the same. and remember, his debate performance is how he climbed his way up out of obscurity over the past couple of months. >> he was calm, he was measured, he was a grown-up, he was polite when others were engaging in finger pointing. >> he can play the policy card, he can play the history card, and throw the red meat when he needs to. and he did a lot of that tonight as well. and the crowd responds when those things happen.

i wouldn't call the coronation off just yet. this is still a fight until january 3rd. >> i think what you saw is the good newt gingrich tonight and the bad newt. the good newt, he was very thoughtful. he had some very measured responses. and then you saw the bad newt. it was like, who did you compare yourself to? what in the blazes are you talking about? and, again, you want to debate the president for how long? this is the problem, erin, that i think speaker gingrich is having. people like some of his ideas, but they actually listen to him over a period of time and say, do i really want to look at this guy in the oval office? >> you know the most amazing thing to me tonight was the way mitt romney kept talking about his bipartisan bona fides as governor of massachusetts. he's not running from them right now, he's actually speaking to a broader audience. now, maybe to compensate for the fact that there's some pretty negative ads going against newt in iowa, so he's balancing out that profile, but an interesting strategic shift by mitt romney. >> let me ask you about mitt romney. he seems to be trying to show, hey, i'm human, i make mistakes, i may look perfect, but don't hate me because i'm beautiful mitt romney. someone should do one of those. that would be fun. here's what he had to say, though, when talking about an

investment where he made a mistake about jetblue. >> i understand, by the way, from my successes and failures, what it's going to take to put americans back to work with high-paying jobs. i can debate president obama based upon that understanding. and i'll have credibility on the economy when he doesn't. my successes include some businesses that were successful, like staples and bright horizons children's center, and a steel meal in the middle of indiana, and by the way, some founders. the leaders of jetblue said, come, invest in us, and i said, that'll never work. kind of wrong. >> david fromme, does it help when he can rattle off all these companies that he bought? >> i think that really does help, especially tonight, when gingrich is in one of his more manic phases. that gingrich looked high-handed and arrogant and romney looked calm and real. i think he's also reading some reassuring internal polls.

the last time we saw mitt romney on that stage, he really did a very poor job. he was flustered, he laughed in a funny way. that was the night of the $10,000 bet. he's getting some good news. that make him think, i may be president, i have to look like a president. gingrich is getting bad news that makes him testy and difficult. can i say one thing about your question about newt gingrich's conservatism? it's a very complicated question. >> sure, go ahead. >> it's summed up by the the very first speech i ever heard him give. it was 1983, i was just out of college, and the topic was why liberals oppose a strong american presence in space. and that is -- that is newt gingrich. the content was actually not that conservative. he was advocating a big, expensive government-run program to put human beings into space. but the method, the delivery was confrontational, it was divisive, it was pushing liberals outside the american

consensus. and that is the question when you think about what is conservative, and what is not about gingrich. in content, not super conservative. in approach, super divisive. is that what the country wants right now? >> which brings me to the mitt romney point. because we joke about, okay, mitt romney, he doesn't rise in the polls. but, you know, you could look at it from a different perspective. you could say, this guy is teflon. people have been looking in his closets for eight years. and they haven't found anything, and he's still running at 25%. >> that's the nicest possible interpretation. >> but i'm -- i'm trying to come at it from a different way. >> he's got pretty clean closets, right? mitt romney's baggage is limited. the problem is is -- >> the dog on the roof is pretty much -- >> and then there's that. but, you know, the problem i think a lot of conservatives have is the idea he's not a conviction politician. because he's campaigned so totally different from the presidency than when he wanted to be governor of massachusetts. but he's been steady. he is the best organization, by far.

and nobody -- remember, the history of the republican primary tells us this. the conventional wisdom front-runner usually ends up winning after the party flirts with the dark horse. just in this case, we've had around five of them. >> let me say this, i think newt gingrich is the best thing that could have happened to mitt romney. he has to toughen up. can he take the blows? can he actually throw some? if governor romney wants to win this thing, people need to see a little passion out of him, they need to see a little more conviction than they've seen. and newt gingrich is the perfect fodder for that. >> quick final sound bite for you, david, from rick perry, because there were other people at the debate tonight. trying to explain how he can come back. >> there are a lot of people out there, i understand it, there are a lot of folks that said tim tebow wasn't going to be a very good nfl quarterback. there are people that stood up and said, well, he doesn't have the right throwing mechanisms or he doesn't -- you know, he's not playing the game right. and you know, he won two national championships, and that looked pretty good. we were the national champions in job creation back in texas.

and i'm ready for the next level. let me tell you, i hope i am the tim tebow of the iowa caucuses. >> on that note, he got an applause, and viewers, let us know what you think. will he be? what do you think of everybody else in that debate as well. thanks to all three, appreciate it. "outfront" next, breaking news, congress appears to have a deal to prevent a shutdown and a payroll tax extension, but there's something that smells really strange about this. and a war of words between republican senator john mccain and russian prime minister vladimir putin. putin calls mccain crazy. and the latest developments in the case of florida's missing mother, michelle parker. her father, brad, comes "outfront."

breaking news tonight. countdown to showdown. there may be a deal to avoid a government shutdown. the eighth time this year we've faced this threat. and perhaps a deal to get some kind of payroll tax extension. it's complicated, though. let's get the details on the news. kate balduan live on capitol hill. and kate, what with can you tell us about a deal right now? >> reporter: the deal that we have before us right now is back from marathon negotiations, really, throughout the day. the congressional leaders have been able to reach an agreement to sign off finally on this long-term, this massive spending bill, that will fund the government through the end of 2012, which almost certainly means that congress has been able to avoid this looming government shutdown. both the house and senate, they're hoping, will be able to vote on this measure tomorrow.

and so that is really, kind of, the success, if you will, of the evening. they've been battling on outstanding issues for a couple of days. they seem to have been able to kind of bridge the gap there, and they've been able to sign off on this larger spending bill. but, of course, still in the work, still not finalized, erin, is the big question, which has been really the big battle and the big standoff, is over how to extend and whether to extend this payroll tax cut. >> and what can you tell us about that, kate, so far? i know there have been conflicting reports, but among them, democrats saying that, perhaps, if they can't get it done for a whole year, they'd extend the payroll for a couple of months. are you hearing something like that as likely? >> reporter: we are. and this came out at the same time that they found out that they've been able to finalize this big spending be bill. we're learning that senate democrats are floating or kind of proposing this idea, and they're calling it a backstop, or a fallback measure, if they were not able to kind of bridge the gap and make this full

extension of one yearly of this payroll tax cut. so they're proposing what we're hearing is a two-month extension of the payroll tax cut, as well as a two-month extension of unemployment assistance and a two-month extension of the so-called doc fix, so to be able to schedule a cut to medicare payments. so they went to great lengths, really, to try to assure us and assure me that this doesn't necessarily, shouldn't necessarily say anything about the broader negotiations. they still say that their talks are ongoing to not have to do this short-term extension, to do the full deal. they say the talks are encouraging, but i will tell you that it is rare that either side would be talking about a temporary extension of anything, if the full-blown negotiations were really underway and going the right direction. so we'll have to be asking some more questions about that tomorrow. >> all right. well, kate, thank you very much. appreciate it. >> reporter: of course. >> let's bring in john avalon now. i'm just doing some of the math here.

two month for the payroll tax cut extension, $160 for the average family. certainly will do some good for some people. but two months isn't enough to help you plan, it's not enough to help you change on what you're going to spend the money, it's not enough to stimulate the economy, it's not enough to get hiring. is it enough to do anything? >> no. this is kicking the can down the road again. if they only agree on a short-term extension of payroll taxes and unemployment benefits, it's groundhog day all over again. we're going to be back here in two months. now, it's great that they appear to have come up with a broad deal to keep the government funded through 2012. we don't want to have another one of these games of chicken, but the fact that they can't reason beyond this two-month extension, that appears to be the deal. there's still an opportunity ion you know, prove us wrong. congress, do your job. but if they only kick the can two months, it's indicative of this culture of brinksmanship that they seem addicted to. >> it's so frustrating too. because if you buy into the fact that we need a payroll tax, which a lot of people do on both sides of the aisle, we looked at

a rubik's cube, there were 10 or 12 different ways to pay for it, many of which democrats and republicans liked. mortgage lenders paying a little bit more. >> this is the thing, this is something they all agree on, that you need to extend the payroll tax, but they can't agree on the best means to get there. we're in this 11th hour negotiation, they don't want to go home for the holidays. it so looks like they kick the can down two more months, which takes away a lot of the economic benefit by adding that uncertainty. >> and it's so frustrating. they talk about it for two months, some of the numbers, maybe $40 billion. you say, if it's paid for, it's okay. it's okay, but it's really not okay. there's a reason you give a payroll tax to individuals, so they have more money. and two months doesn't really change the way people can live their lives next year. and companies, you give it to them, hey, i know what tax i'll be paying over the next year, oh, not as much. i'll be hiring a lot more people and get this economy growing. they'll do nothing with two months. >> exactly. this is the whole argument about predictability. instead, they're underlining why

the american people are so frustrated about congress. if they can't agree on the things they agree about, allegedly. this should be the no-brainer. come on, congress, prove us wrong. >> 24 hours. they could still do it, john. >> there's still time. >> they could stop with this can-kicking thing. >> let's stop kicking that can. >> we're rooting for them. thanks to john avalon. well, the russian prime minister called arizona senator john mccain crazy today. it was a war of words between the two intensified. the verbal sparring had to do with the death of moammar gadhafi, drones, and putin. drones, as in the ones u.s. defense secretary leon panetta says were involved in the former leader's death. so putin was asked about a prediction that mccain supposedly made online about the prime minister meeting the same fate as gadhafi.

well, putin did not think highly of mccain's comments. >> reporter: mr. mccain is known to have fought in vietnam. i think he has enough blood of innocent vichbl civilians on his hand, and he can probably no longer live without these horrible, disgusting scenes, where televisions are showing gadhafi being killed, covered in blood. is that democracy? >> but as it turns out, the senator's twitter posts were links to news stories suggesting that russia might be facing its own "arab spring," because some leaders who lost power in the arab spring ended up in saudi arabia. gadhafi's execution-style death was unique for now. and tonight, mccain told our john king that he thinks putin is reacting to the demonstrations in russia, where tens of thousands protested results. putin has ruled russia for all intents and purposes for more than a decade. mccain said it will be interesting to see the next demonstrations set for later on

this month. we'll see what will happen in this war of words. still out front, new information about the u.s. drone in iran. an iran yan engineer today says iran supposedly took control of the drone. explains exactly how it happened through a gps pack, something u.s. experts didn't think iran was capable of. but one man did. google chairman eric schmidt. he says iran's a whole lot more sophisticated than america gave them credit for. that's just one of the things we discussed when he gave us an exclusive look at google's new york headquarters. i'll have that "outfront," ahead. no matter what small business you are in, managing expenses seems to... get in the way. not anymore. ink, the small business card from chase introduces jot an on-the-go expense app made exclusively for ink customers. custom categorize your expenses anywhere. save time and get back to what you love. the latest innovation. only for ink customers. learn more at chase.com/ink

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it's time for a story we can't resist. the magnolia wellness center in oragnevale, california, is closing tomorrow for the first time. not because their rent is too high, because their customers are. opened in 2009 as a small medicinal marijuana dispensary, magnolia wellness has grown into a community-based collective. but in addition to pot offers on-site yoga and compassion-themed events for 40,000 patients. yep, 40,000. but no more. on december 6th, reportedly at the urging of oragnevale's largely conservative population, the sacramento county board of

supervisors voted to ban any land use that violates federal or state law. ee, that means marijuana dispensaries are banned. even though this means the end of his business and a tough spot for all of the members who are looking for relief from their pain, the dispensary's manager, steven lee, is surprisingly mellow about the whole thing. he's even holding a holiday party tomorrow, complete with baked goods. and a free gram of top-shelf pot for every customer. but before you get too excited, if you want to partake, you'll need to bring a card with you, a dispensary, not a christmas card. because the free marijuana offer is only valid to magnolia's customers. no word on the baked goods, but i'll get you give them one if you tell them your buds at "outfront" sent you. we just couldn't resist. still "outfront," the "outfront" 5. mission, drone. >> it's entirely possible that there was a malfunction.

of all the crazy rules in our government, the craziest of all. >> google's big idea. >> this is madness. >> madness? all this "outfront" in our second half. he said it's the only lens of its kind designed to realign naturally with every blink so now, i'm seeing more clearly. [ male announcer ] learn more at acuvue.com. but to be honest, i find the omega choices overwhelming.

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we start the second half of our show with stories we care about, where we focus on our own reporting, do the work, and find the "outfront 5." first, countdown to shutdown. feel like deja vu? it's actually deja ochoe .

the deadline to pass a bill is friday at midnight. john hoeven told outfront he thinks congress will get it done, will avoid a shutdown, but he also said that despite democrats' move to drop the millionaire's surtax, he will not drop the keystone pipeline to get the payroll tax passed. number two, arizona sheriff joe arpaio has been accused of discriminating against latinos, according to the justice department. a three-year investigation found the maricopa county sheriff's office targeted latinos, including racial profiling, and also retaliated against anyone who complained. arpaio, who calls himself america's toughest sheriff, is known for his hard stance on illegal immigrants. "outfront" reached out to his office for comment, but we did not get a response in time for the program. number three, a new defense attorney for jerry sandusky says his client may have been teaching boys, quote, how to put soap on their body in the penn state locker room. karl rominger offered the

explanation in an interview with wthm channel. in a statement obtained by cnn, rominger said today he was only proposing one hypothetical scenario for why sandusky may have been in the shower with young boys. sandusky has admitted to showering with the children, but denies sexually abusing them. number four, kirsten rob, a missing teen in portland, oregon, was found this morning. her parents came outfront tonight. police told "outfront" that they found her in the apartment of a young man she found on the internet. the roth family found a statement saying, "we are thrilled to be able to pick up our daughter. please do not take this lightly, because no adult male should ever take a child or keep a child without her parents knowing." police are questioning the 21-year-old man. he has not yet been charged. she had met him and interacted with him on the internet and via text message. it has been 132 days since the u.s. lost its top credit rating. what are we doing to get it back?

well, the developing drone story continues. and we've got developments tonight. iranian officials say that they're going to put the drone along with six others that iran says it's captured from israel on display in tehran and allow journalists to come and see them. but this is what is important. in an interview with "the christian science monitor," an an iranian engineer claimed that he used noise. jamming technology to force the bird, as he called the drone, down. now, a lot of experts have been saying iran didn't have this ability, that it would have needed help from china. now, google's eric schmidt said on the show this week he thinks iran is much more sophisticated than codes and sib war than people give it credit for. turns out, he may be right. also today, u.s. military officials told cnn why the drone was in iran to begin with. apparently it was on a surveillance mission of suspected nuclear sites in the country. previously, u.s. and nato officials had said the drone was just patrolling the border and it veered off-course. a few moments ago, i spoke with

chad suite, cofounder of the chertoff group, a global advisory firm, and i asked him if it could possibly be true that iran had hacked into the drone and brought it down. >> well, i think the proof of the pudding will be in whether they can put up or shut up. we'll see. secretary panetta has stated clearly that we'll continue to operate the program along the afghan/iranian border, so they'll have to be able to demonstrate that they can replicate this. >> but here's a key question. >> yep. >> do we have the ability, if these things lose touch with us, to just automatically destroy them and why might we not have done that if we, indeed, had that ability? it would have been so expensive and so fancy, we didn't want to take the risk if it wasn't in iranian hands? >> that's a great question. and believe me, this is something that many at the pentagon and, frankly, up on the hill, are going to be looking into. it is an expensive piece of equipment, as you noted, and so to destroy it is a costly decision. however, it's entirely possible

that there was a malfunction in the protocol, that they lost signal, that instead what kicked in was the emergency landing protocol. and when you look at the way the iranians have displayed the aircraft, you'll notice that they hide the underbelly of the aircraft, which does indicate that if they were so good at getting control of the aircraft, why couldn't they have landed at without destroying or disrupting the undercarriage? there are a number of signatures here that look like they didn't quite achieve the success that they claim. >> what about the technology on this drone? you know, we've been focusing in on it's able to evade radar, and that's something other countries desperately, desperately want to be able to do, especially china. and people say, clearly iran will share this technology with china. is that the the best technology that this drone has. is there something else china or iran might get off of it? >> it has a number of things that the chinese would like to get. there's extremely sophisticated radar-evading paint.

it has optics that can identify terrorists from several hundred feet away. it's got a number of other electronic signature sweet uites. it just depend on how this particular umd was equipped. >> all right. good to talk to you. >> take care. the use of drones is not just a politically sensitive issue for the united states overseas. here at home, we've got a whole lot of drones, , flying around. police and other law enforcement want to use the droens. they want to find out if people are doing things they shouldn't be doing. and this has some people very worried about privacy. so are drones the next big brother? what are they really able to see and who's using them to look at whom? joining us to talk about this is cnn legal contributor, paul

cowen and katherine mangaward. let me start with you, paul. they're using drones and soon the faa will put out new rules and say, look, now you're only allowed to fly drones in some zones. and now we should be allowed to fly them in more zones. >> yes. can we stop it or just assume that they'll be using more and more of them? >> drones are coming. but americans have gotten very used to this already. every time you go into a 7-eleven to buy something, you're on video. now, in the 1950s, maybe that wasn't the case, but there's sort of a lower expectation of privacy that we all have, because of all of this surveillance. we have satellite surveillance already, we have surveillance at red lights. drones just making it a little bit technologically easier. i don't see it as a radical diminishment of our privacy. there are privacy concerns, but let's not get carried away, like the aclu is. >> and the aclu is obviously filing a suit to try to stop the use of drones for law enforcement. katherine, do you share paul's views? i mean, i guess, after all,

we've got limited privacy online, and my producer, will sir sirott, and went looked at what television shows were on at his house and could change them from his phone. >> if cops were angels, i would be much more comfortable having them float over me, watching me, but all of these technologies are subject to abuse. and cops don't have a great record of, you know, don't worry, if you're not doing anything wrong, you don't have anything to fear. there's a big difference between putting a picture up on facebook and having a cop watch you when you don't even know it. >> but kevin, do you think we can stop it? you can have lawsuits all you want, but the more sophisticated these drones are, i imagine they could be incredibly high up, or incredibly far away even on an angle and they could see what you're going to see. how could you really stop them? >> i think the aclu is doing a great service by just saying, hey, everybody, freak out about this just a little bit. but i think they could also offer a trade.

if the cops get to watch us all the time, maybe we should get to have a little bit more rights, a little bit more protections for when we record the cops or keep our eyes on them. >> of course, the truth is, we will be watching the cops. the drones will be watching the cops and we've all got our cell phones now. and i think what's happened is, we've gotten used to this. we didn't like it at first, wee always talked about 1984 and big brother watching. but you know something? we've adjusted. people who are under the age of 25 in this country, they lived their entire lives online and under surveillance. so i think america's expectation of privacy has changed radically in the last 10 years. >> okay. that's true, but -- and here's the big but -- these drones are going to become, if they are not already, and we know in some cases they are, powerful enough to see a lot more than bhost who's on the street stealing a car or who's getting equipment for a bomb. they can see in your home. they can see in your bedroom. will can see his own tv. someone else could see what you're watching. >> i could propose tap into will's tv if i wanted to. the technology is there.

>> nobody will want to know what was on it, by the way. i don't want to talk about that. >> but if you get to the point where one of these small helicopters is hovering outside of your bedroom, taking pictures, the police, that's illegal. under current law, you could sue the police, the supreme court wouldn't allow evidence to be introduced that way. so we have laws in place that protect privacy of that level. that level of intrusion. but, you know, there's technology coming up that they'll be able to see through walls. we need new laws to adjust to this stuff. but, you know, i think in the end, the aclu's suggested rules here, which is, you know, when they take pictures, throw them away, don't retain them. well, i think if we're looking for a serial killer, maybe we'd like to know if he walked up the street before the night of the murder. 3,000 people died at the world trade center. you know, surveillance might have been very helpful if we could have avoided that tragedy. >> how much are you willing to give up? >> and i think we're willing to give up a little bit to be safer in this country. >> all right. katherine, paul, thank you very much. viewers, let us know what you think. please reach out, facebook and

twitter. an issue that obviously matters to all of us. still to come, the father of michelle parker, florida's missing mother, comes out front as the search continues for her. and google chairman eric schmidt opens the doors to the company's new york headquarters for the first time ever in an exclusive look. and you won't believe what google guys get for free. left ? [ female announcer ] purifying facial cleanser from neutrogena® naturals. removes 99% of dirt and toxins without dyes, parabens or harsh sulfates. so skin feels pure and healthy. [ female announcer ] from neutrogena® naturals. is best absorbed in small continuous amounts. only one calcium supplement does that in one daily dose. citracal slow release... continuously releases calcium plus d for the efficient absorption my body needs. citracal.

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we do this at the same time every night. our outer circle. we reach out to our sources around the world. and tonight we go to iraq, where

a ceremony was held to mark the official end of the war. u.s. troops lowered the flag of command that flew over the iraqi capital. arwa damon is in baghdad tonight. arwa, as the final u.s. troops leave, what concerns do iraqi civilians have? >> reporter: erin, their concerns are endless. they're worried about the lack of national unity, despite what is publicly said by officials within those who are leading this country. they're worried about corruption, they're worried about the lack of basic services. but perhaps still more importantly, they are worried about security. because even though the numbers are down for iraqis, this is not a numbers game. and they continue to fear that every single time they leave their homes and say good-bye to their loved ones, they may never see them again. erin? >> all right. arwa, thank you very much. well, it's been almost a month since florida mother michelle parker was last seen. that was on november 17th, when she dropped her 3-year-old twins off with their father, dale smith. smith and parker were engaged, but as we told you, they'd had a public falling out, which

happened on the tv show, "the people's court." the couple had sorted out a dispute over the engagement ring. police still say smith is the primary suspect, but he has not been charged. "outfront" with us tonight, michelle's dad, brad parker, and his family's lawyer, matt morgan. good to see you again, matt, and brad, thank you so much for coming on the show. >> thank you. >> the family just moved the command post from sanford to kissimmee, about 25 miles away. can you tell us why and what's going on tonight? >> you asking me or matt? >> to you, brad. >> oh, to me? we're reaching out, 25 miles to east or west. the first command center was orange avenue in oakridge. there was over 70,000 flyers posted in oakridge. it was saturated, and we moved to sanford, for two weeks.

we put out flyers up there. now we're moving to kissimmee, and we'll probably be down there two weeks. and we're going to saturate the kissimmee area. >> and, matt, what about michelle's twins right now? there's obviously been the custody battle. we've been telling our viewers about since she's been gone? where does that stand now, and are they still with dale? >> yeah, we do have good news on that front. martin nejame gave him their word that he wanted what was in the best interests of the children. so over two weeks of kind of going back and forth, we were able to iron out an agreement where yvonne will get very liberal visitation to the children. so we're very thankful to mark nejame for his efforts and yvonne is beyond happy to be with those children when she gets to see them. >> and matt, obviously, last time we spoke, michelle's phone had been found, her iphone. has there been any other traces of her or any more information

that you have found out of what was on that phone that could help you at this point? >> i believe that detectives have said that there was information on that phone, which is going to be useful towards their investigation. they haven't released exact details yet, erin. but i have been informed that there was information that they are going to use. >> brad, what do you think happened here at this point? i mean, i know you're hoping that your daughter is okay. do you think that dale had anything to do with her disappearance? are you frustrated that he has not been taken into custody or not charged? >> i'm very frustrated. i mean, michelle dropped the kids off there, and that's the last day she had been seen, in broad daylight. she had a nice hummer. it was a nice hummer, and michelle was a pretty girl. >> okay. >> and she just disappeared.

and all the evidence with the orlando police department -- >> all right -- >> -- leads them right back to dale. >> we all hope, sir, that this ends in a good way and we'll talk to you both again soon. >> thank you, erin. >> thank you. thank you for having me on. >> all right, thank you, sir. google is next. un-stuff your nose. really? [ male announcer ] alka-seltzer plus liquid gels fights your worst cold symptoms, plus it relieves your stuffy nose. [ deep breath ] thank you! that's the cold truth!

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google. a verb, a word almost everyone on earth knows. i took an exclusive tour of google's new york headquarters with executive chairman, eric schmidt, where he opened up why he thinks america is still the nation to beat. >> america is the best innovator in the world today, and that's going to continue. america has 18 of the top world's research universities. it's still a place of the best innovation. america is the world's innovation center. it's still possible for two people, throe people with a graduate students and so forth to create a brand-new company that will change everything in the world today. it's every reason to believe that america can grow very, very

successfully with a focusen in on innovation. >> reporter: there is a reason eric schmidt is so confident about the future of america. even in hard economic times, google is thriving. revenue surged more than 30% last quarter, putting schmidt in a good enough mood to give us a rare glimpse behind the scenes. so this is inside google. second biggest office for google in the world? >> that's right. >> in manhattan? >> yes, right in downtown manhattan. about 3,000 people, one large building and an adjacent building. what's interesting, about half and half, high-quality engineering and sales and marketing. nobody thought you could build the world's best engineering center right in the downtown of manhattan, but you can. >> reporter: situated in the heart of the meat packing district of new york, google's unique office space spans two building and an entire city block. >> the old model was you would have your office and the door would be closed and so forth. people are used to it. if they want privacy, they put on their headphones and listen to music while they're programming. but they're staring at computers all day.

>> there's calf tier yas and snack stations with free food every 150 feet. >> the only asset that matters is people in a company like this. so keeping them here, keeping them motivated. frankly, they work incredibly hard. we give them internet connections at home, of course, and they work pretty much all the time. and after all, they're trying to change the world, so they really care. i don't need to worry that they're at work. i know what they're doing. we can also measure, by the way, what they're doing, because we can see the productivity and know whether they're making progress or not. >> you can literally watch it in realtime? >> and we do. >> people get all worried. they say china and india are churning out engineers. are they churning out better ones? >> they certainly have some of the best in the world. we try to hire them. we would much rather have those chinese engineers working here in america for us, producing great products and benefits for america. >> reporter: google is doing everything it can to hire the best and the brightest all over the world, with 60 offices in 30 countries. what countries would you say right now are the least office to what you do?

>> the most shocking country of all is north korea. north korea is very difficult to operate in, but it's a country where there's so little conversation and so few people peering into it that people really do believe that their leader really is god-like, even as people are starving in the streets. and some time in the next few years, north korea will open up to -- it's too. it's the last one. >> and a country like china, do you feel you have the opportunities you need in china? and it's amazing when you look there, it's not youtube, it's youku, or it's not necessarily google. they've encouraged and built their own companies in the biggest growing market in the world. >> in the chinese model, there's a chinese equivalent of every american firm. there's a facebook equivalent, there's a twitter equivalent, there's a google equivalent, which are doing well. the chinese laws make it very difficult for american companies to enter china and operate. you have to operate through a joint venture and you're subject to these horrendous sensor censorship laws. after five years of trying to

make this work, we decided to move to the other china. they say one country, two systems. we prefer the open system of hong kong. there's a firewall literally called the great firewall, which blocks content they don't like between hong kong and the mainland, forcing them to do the censorship. we just could not abide by their rules. >> so is this really going to be the century for china? >> china is the world's manufacturer and they do it very well. they do not yet have all of the advanced society functions that they need, an independent judiciary, the kind of political dynamic and creativity, the kind of advanced universities that are needed to do what we've been able to do in the united states. there's an open question as to how long it will take them to get there. >> i met a little boy in china this summer and his name was bill. they'd named him after bill gates. we had sort of done this question as to whether the next bill gates or steve jobs would be born in china or in the united states? and part of that's luck, but part of it really isn't luck. where do you think the next one of those people will be born?

>> i think the next one of those people will be born in america and will be a successful american entrepreneur, because it's not just the person, it's the system that they're part of. innovators create millions of jobs in america. we need to create them and we also need to welcome them from other countries when they want to come and relocate to america. >> and we're still not doing that to the level we need to be, are we? >> of all the crazy rules in our government, the craziest of all, bar none, is that we take the smartest people in the world, we bring them to america, we give them phds in technical sciences and we kick them out to go found great companies outside of america. this is madness. >> more than 31,000 people work for google and new york is the company's second largest office after its sprawling headquarters in mountain view, california. here the motif is classic new york city. hallways with fake subway grates, conference rooms that look like a meat locker, and razor scooters to get from one

end of the building to the other. video conference rooms lie on the fake city streets, and huddle rooms designed after city apartments are there to make people feel at home. >> a woman's apartment. a bra hanging from the bed, and a cat, really? and a cat? while privacy is always an option, schmidt says the best ideas come from people working together in extremely close proximity. >> what's the future for google? you've got the google tv, you've got the phone, you've got the search, but you also have wind diagnostic, all sorts of thing. your finger's in a lot of pies, which could be a sign of strength, or a sign of a lack of direction. which is it? >> it's, of course, both. one of our strengths is lack of direction. we let people invent new things and we see how far they go. and if they work wonderfully, we'll continue them. and if they don't work so well, we'll try something new. google is the largest systemic inknow vater of scale that i know of. we try to bring out new things and see if they work.