welcome to the program, it is summertime and we look back at some of the interesting people who have come to our table. tonight, two leaders from the world of technology. larry page, ceo and cofounder of google. >> the exciting part to me is, you know, once you are through all the business stuff, you know, like whose data you are using and what are the terms of that and all of that, you get to make thing that really work for people, and i think that, you know, our understanding of search and the kind of things people are looking for is improving all the time and you don't think about it, but, you know, we didn't used to have maps, you couldn't type an address and get directions somewhere and that is something you come to expect now, i type an address i can navigate or i can get a really great high resolution image of that place or whatever, and so i think that

search is really a moving target, you know, it is always getting a lot better, you don't always see it because it is like every day to make it better i think the next big change in search will be really search understanding you. >> rose: and mark around, marc andreessen the leader of netscape and in silicon valley. >> the whole point of capitalism is unleash potential and money is marker to quantify the success and that creates resources financial resources that can be put back into society. again, for the same mission to boost the human potential and then the people you are helping can then create businesses and create wealth and the cycle continues. so it is a positive feedback cycle in human society. the whole thing is interesting. >> rose: larry page and marc andreessen when we continue. funding for charlie rose was provided by the following.

>> rose: additional funding provided by these funders. >> and by bloomberg a provider of multimedia news and information services worldwide.

f captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: larry page is here, while still a graduate student at stanford in the mid 1990s he and sergei brennan invented a new way to categorize information on the worldwide web, a mere 14 years ago that idea became google, today it is the world's largest search engine value add over $200 billion, page once again became ceo of the company he founded last year and the height of its strength google nevertheless face as host of challenges the rise of facebook and the social search, competition with apple and the mobile technology battle and stay one step ahead of the disruptive young startups from silicon valley, i am happy to have you here to talk about all of these things, welcome. >> thank you. >> rose: i want to show you this. thithis is when you were here l, 11 years ago when you and sergei came here in 2001, roll the ta

tape. >> we are both actually kind of obnoxious and when we were recruiting to the ph.d. program, and larry had to comment on every single thing. >> be difficult in every conversation and we had to debate every single point which i guess are things i tend to do as well, so while we are continuously arguing, i guess that is also our upon facility and we got to be friends pretty early upon in the ph.d. program. >> rose: there you go in 2001, has the relationship changed over the years. >> you know, i think i have had a great relationship with sergei and i continue to, and i think it has been really good for the company that we have had that close relationship and ann we don't always agree on everything but we work well together, and we are able to discuss and get through it. and that is really a continued and i have been happy that has continued really well as we have gone through this transition and i have become ceo again, after a long, long period of time and i

think sergi is really thriving and really excited about what he has been working on and actually i think that has all been very positive for the company. >> rose: is it different because you are ceo, google? you know, i think looking at our velocity our business is very complicated and many aspects of our business, and i think we are struggling with that a bit. to get everything done really well, and produce great products for end users. so i have tried to streamline that a bit and rein in a little bit of the unbounded creativity and get us focusing on some of the things we think are really, really big. >> rose: i don't know if he advised you but i once was in the conversation with steve jobs and he said, you know, to some young entrepreneur, stay focused and do what you do well and is there a conscious -- he may have told you that. >> he told me that many times. you have too many things. >> rose: is that part of what you want to do as ceo to make sure you are in these core

businesses? >> ye yes, i was talking with or people here in new york today and i told them, you know, i think it is really important that we make sure we are focused on the things that are really -- that are really big and important and that are going to change the world and we do those things, really, really well. and that doesn't mean we are necessarily going to do 1,000 different things. >> rose: yes. and if you do something big as you have said, even if you fail you are more likely to find something that will make a contribution to what you want to do? >> you know,, that is absolutely true and, you know, i think we have had great success, many of the things we have started, you know, even many years ago now have been grown to be really big, i remember when we acquired android as a company, it was eight people and now it is a huge phenomenon, right? and chrome, a similar thing we started it took many, many years and now it is very big. and so, you know, the areas that i am really focused on and i have people now reporting to me directly who run those businesses and i think that is really great and i think those

things are still even at their earliest stages it just was a story today that chrome is overtaking ie today as the largest browser on the internet and i am real excited about that, and i think, you know, obviously i have had a lot of growth and done a lot of great things on the product but much more to do. >> rose: it is a very different world, i mean when you started, and people talk about apple, amazon, facebook and google does that mean that the the future is you will see those four companies in a sense in the business competing or simply building a moat around your own company. >> i think our industries evolve and get older they tend to have more complexity, if you look at laptops, there is something, you know, you might have, you know, in the past like ibm may have made laptops and hard drives for laptops and obviously it is somewhat a complicated relationship with the other people that make laptops and somehow they manage that and you see that with samsung and apple, samsung as a supplier to apple and i think mature industries tend to have that and i think

the companies that can manage those kinds of things do well. so i think there is a lot of that that goes on and i think that it would be mice, i think it would be nice to see a bit more openness to partner between the companies, and then we could focus more on what we do really well. but it is also, you know, difficult, you want to have produce great products for all of the users that use these products for all of you, and in order to do that, you know, it is nice to have control over the different aspect of what you need in order to make a great user experience. >> rose: people say that we may be hooking at a different way of engaging in search, which is more personal, because of social media. do you fear that as competition for you? >> one of the big things i have done in the last year is push really hard on our social efforts, you know, we have google plus has come out, it is about to hit its one year anniversary, and in a year i mean i think we have accomplished really a lot, just looking at what our users want,

i think one of the things i have been really frustrated by in search is that, you know, i have this trend at google, smith, you can't really search for him, but now i can actually, because we understand, you know, the friends that i have, the people i am related to and so when i search for that ben smith it gives me a little picture of him and that appears on the search box. >> rose:. >> yes but that is because of google plus. >> yes. >> rose: so that suggests that social media may very well be a better way of searching than -- >> i think it is important that in order to do search well and we have under released those functionality it is important that we understand you, and so we understand which ben smith you know. >> rose: right. >> now it is not important for the research you do but it is important for some of those searches, and so, you know, i think we just have been looking at ways of really meeting that user need and meeting it really well. >> rose: so you are worried or not worried about-face book's competition in search? >> i think that it is something we take seriously, like social

media, i think it has been unfortunate facebook has been pretty close with their data and i think we would certainly -- we are in the business of searching data we don't generally turn it down when it is offered to us. so i think in general i think we would like to see content on the internet being made more open and so on, and we had an issue with them over contacts. >> rose: right. >> where they, you know, from the user's perspective you say it is great i am joining facebook i want my contacts and google said fine you can get them from google, and the issue we had is facebook said, no, google you can't do the reverse, and so we just said, well users don't understand what they are doing, they are putting data in and they don't understand they can't take it out, and so we said, well, we will participate with people reciprocity and we are still waiting. >> rose:. >> for them to offer reciprocity. >> yes. >> rose: and do you think they might in the future? >> i mean, i hope so, i imagine they will be forced to

eventually if -- you know, if they don't choose to, but i think the idea that, you know, you hold your users hostage kind of in the, you need to have some reasons for it, that don't make sense. >> rose: what are their reasons. >> they claim it is privacy issue, but it is not really because they do it with yahoo, they just don't do it with us. but i think, you know, you don't want to be holding your users hostage and we have really, you know, we felt that, you know, we want there to be a competitive market, we want other companies to be able to do things so we think it is important that you as users of google, can take your data and you can take it out if you need to or take it somewhere else. >> rose: apple is a closed garden as well. >> yeah. that is pretty much true. >> rose: they are the two primary closed gardens and so the question is whether her the wave of the future or whether an open google is the wave of the future. >> > you know, i think it is very hard, because there is, -- these are very complex systems and so

on, and i think that we hope there is a way for people to cooperate and users do what they want, users want to do things that really work for them and building those products is hard but that is something we really focus on. >> rose: i mean, if you look at success in silicon valley it often has been because people in first and did really well and therefore they kept building their own up and their software is better and better so you had a wide advantage in search, they had a wide advantage in social media, facebook did. i mean wha what do you learn frm that? >> there is always different kind of partnerships we need to do, we did a lot on travel, we bought ita, when people do a search they really want to say, i want the this -- this place and go from here to here and get the right answer, in order to do that you need to have partnerships with all of the different people with data on the airlines and so on, and there is a lot of hard work, i

mean, they have been at that for years and years to make all of that work. the exciting part is once you are through all of the business stuff, you know, of whose data you are using and what are the terms of that and all of that you get to make things that really work for people, and i think that, you know, our understanding of search and the kind of things people are looking for is improving all the time and, you know, you don't think about it but we didn't used to have maps, you could can't type an address and get directions somewhere and that's something you come to expect now, if i type an address i can navigate or get a really great high resolution image of that place or whatever, and so i think that search is really a moving target, you know. it is always getting a lot better, you don't always see it because it is like every day that we make it better. i think the next big change in search will be really search to understanding you, which does, which it doesn't really know. >> rose: and how will you do

that? >> well, i think that, you know, we are already doing it and i think we are probably not doing a good job of marketing it, but -- >> rose: mean by, you mean by google plus or something else. >> both things. i think google plus gives you the identity that is you, that you are logged in, and we know about your relationships and we might know some of your interests. it is very easy, right from the search result to say i followed something, i am interested in it. you know, i want to hear from that again so that now let's improve our search algorithms for you and other information for you like in google news and other places. >> rose: is privacy an issue for you legally or fill philosophically. >> having privacy is a big issue for everyone, obviously and that is as we have gotten on line systems, you know, out there, you know, you can do changes and your life changes as a result and you can communicate with more people, you can, you know make a you tube video, and 10 million people watch it the

next day, you know, and that affects your brief situate. >> rose: would you in any way move away from consumer generated video? >> i think we are really excited about getting the people who are professionals, to really participate and they are coming to us incredibly excited saying how do i get my things on youtube? how do they get distributed worldwide instantly you know, with less business friction? than you would get as you made a normal television show or whatever. so we have been participating with those people, we put a bunch of money, over $100 million i think into funding, our content is specifically for you tube by people who are more professional, and we are very, very excited. >> rose: multiple youtube channels. >> yes. but we already see the professional content now is largely coming from you tube, that's where it is being discovered, you discover new amazing producers or filming careers or whatever, new, you know, actors and musicians and so on. and so we see that, you know, we make to make that process easier to just expand on youtube.

>> rose: and the capacity to monetize it? >> it has been very good we have monetization comparable comparable to television now, in sort of the ad hours basis, something like that so we are doing a quite well we don't have a right to monetize all of the content we have now and we are working on that and very excited sort of like in television where you are forced to watch an ad. we are actually doing a very large number of our ads now is skipable and we think that is really exciting because it creates an incentive to make really entertaining. >> rose: do the advertisers think it is funny? >> they think it is funny and working for them, i mean, it is a huge percent percentage of our revenue in youtube and i think the majority very quickly. >> when you look at the various businesses you were in, we talked about google plus and talked about the whole range of things, google maps, where do you put this entry into mobile and the virtues of motorola? >> well, i think, you know, we

were luckier i guess when we bought android or press yentl, many, many years ago, and i think that has been a tremendous success, and, you know, i think the motorola obviously is in the context of that, you know, we saw a lot of people again just attacking android, shut it down, you know, using patents and so on and we said, you know, we really believe in android and we are going to protect it, and obviously motorola has a history, developed the first cellphone and all of that and hold all of those pants. >> rose: right. and they have been up and down. >> yes but they have been doing, they made a big bet on android and they went all android when nobody had heard of android and as a result i think they have been a tremendous partner for us. >> rose: what did you see in android that made it, one in 2005 want to buy it, and now you see the realization of that instinct, you were prescient? >> yes. >> what was it that you saw.

>> i think we were glg and getting our products to work on phone. >> rose: right. >> and it was a disaster, you know. we has a closet of 100 phones and, you know, literally none of them worked and they are all different, you couldn't develop software for them and, you know, they were a horrible user experience and we said this doesn't make any sense so this is going to, we are going to fix this and looked at the land escape and we didn't really see it was likely to get fixed so we said, you know, we need software on phones that work, we need an operating system that works and we need a development environment that war works and end user experience that is good that would be amazing you can do a search from your car anywhere in the world, the ability to google. >> rose: what conversation do you have about steve jobs about buying android and motorola? >> look, i think obviously we didn't tell him we were going to -- >> rose: no but after you did they knew. >> yes. i think, you know, i think unfortunately, you know, they have taken, again, a very closed view of the world and many of the things i think they feel

they have a very strong feelings about and so on but we also view, we bought the thing in 2005 or whatever and it has been running for a long time and we put a lot of effort into it too. i think that was difficult for steve to understand. >> rose: because it is direct competition too. >> yes. but when we started android we had no idea they were going to do it and they had no idea we were going to do it. >> grapevine, thinking alike or something. the future is mobile, yes? >> well, i think that the future is everywhere. >> rose: well there is mobile in the cloud, and the cloud. >> i think it is clear everyone in the world is going to have a mobile device that is connected to the internet. >> rose: right. >> and that will happen relatively quickly and i think that is a very, very big deal. that is going to be most people's first computer and, you know, the experience you get is pretty good. it is always on, it always has your e-mail on it, it is a

really great experience in a lot of ways to use your mobile device. and i think that that kind of, you know, just works kind of mentality needs to be applied to the whole computer industry, you know, your pc doesn't work that way, there is no reason it shouldn't and that's why you see partly the birth, the explosion of tablets is that they just work, they are always on, they can download hinges for you. they turn on instantly and so on and have a much better experience and they don't have everything you can do on your desktop, that is coming. >> is the pc over? >> you know, i don't think the pc is over, i think the pc as a bad experience, you know, where you have got, you know, 50 cables you have to plug in and like not clear it out to make it work, i think that is over. >> where are you with respect to china?. well, you know, we had, you know, an issue obviously with china and -- >> rose: having to do with

their censorship. >> censorship. >> rose: of google searches. >> and security issues, whatever. >> rose: hijacking. >> one thing people don't understand, we are talking about privacy, is that security is really related to privacy too, i mean if your data is -- you know, you are a dissident and your data is hijacked by a foreign government that is out to get you, that is a really serious privacy issue. >> rose: yes indeed very serious invasion because it can put you in jail. >> away or in daipger our your friends in danger or whatever. and i think we have taken taken it more seriously than other companies, and really focused on that issue of making sure our user's data is really well protected you know from a security and a privacy point of view. >> rose: was it necessary/mess to get out of china to do that? >> well, i mean, i don't know if it was mess or whatever but i think that, you know, we felt pretty strongly that this was a major issue that, you know, our users are being targeted and so on, and we don't feel good about

providing, you know, 7 storing results for political reasons and other things. >> so you made a decision to leave? >> well, we made a decision hot to leave, actually. we saw a lot of people in china who worked for google, and we made a decision to offer google from our hong kong -- >> rose: right, exactly. >> from our hong kong address which is uncensored,. >> rose: and hong kong is china but you moved it? >> yes. and i think we were hopeful that we would be able to serve pretty well from hong kong within china and that turned out not to be the case, the firewall has been blocking most queries that occur from hong kong, and so they made our service pretty slow and unreliable. >> rose: so what is going to happen? >> i think, you know, the chinese seem to prefer to have one local, local search engine there. >> rose: which is growing rapidly. >> yeah, well with china. >> rose: yes, exactly well that is a bill, three, four and growing. >> billion three, four and growing. so the conventional wisdom there was a conflict with you and sergei on one decide and eric

schmidt on the other side. >> i think it was a difficult set of business decisions to make. i think if you look at the trend there, i think there are lots of difficult issue, obviously that the world faces with china and the business side. i think it is very difficult for face book is currently blocked in china, youtube is blocked in china. >> rose: right. >> most major sites that exist are blocked in china. i think, you know, it is practically speaking very difficult for western or outside internet companies to operate there in places where there is sensitivity. >> rose:. >> you know, search, media, news, things like that. >> rose: so you have to wait until either the regime changes or something, some technology changes? >> well i think we have a tremendous number of really great services that are really, i think, important to the internet and to the world and we hope that the chinese people will be allowed to access this. >> rose: what do you worry about? >> let's see. what do i worry about? i mean,

i come back to the users, and i look at what is possible to do with technology, and i think we are still, you know, one percent of the way there. >> rose: do you? one percent? >> yeah. >> or where we can be? >> absolutely. >> rose: tell me where we might be. tell me what 15 percent looks like. >> rose: i mean this is the kind of things you and sergi talk about all the time. >> yeah. yeah. no, it is a little bit difficult to accurately predict but i think any problem we tried to attack, we succeeded. no matter sort of howdy, you know, we recently have been working on the automated cars. >> rose: oh, yes. >> you know, have driven more than 100,000 miles. >> rose: sebastian was here as you know and talked about it. >> that is an amazingly hard problem, but you took a step back and say can a computer drive my car? no way. but, you know, a little bit of work, a few years go by -- >> rose: that is your pet project, isn't it? >> something i have been interested in for a long time. >> not serious but you are interested and driven -- >> i was interested in that even

back at stanford when i was a grad student so i guess i have been interested. >> rose: so how might it work. blue sky it for us. >> well, i think, you know, we have a great video on line of a blind man, being picked up by a car and, you know, going and getting his lawn triand getting a burrito and being driven back home and that could happen. >> rose: and when can it happen? >> i think it can happen pretty quickly. >> rose: really? >> yes. >> how will it be developed. >> i think we have a great team now working on this. we have gotten some legislation in nevada, we have got special license plate now, for an automated car with an infiniti symbol which is a great thing, so i think, you know, i it will just happen. you can, you know, if you come to campus you can ride in one of these cars today. >> rose: google x, what is that? >> i think google x was our answer to research and, you know, we looked at what a lot of opinions do in research and they are just saying roughly what you do in university and we think

that is a great thing. that is my background, i love that research, but we try to do something a little different and something that is not going well, these things that are possible, but really need a really focused effort, kind of like a moon shot, like an apollo program or something. where you can take research type people and focus them on a really important effort that really needs to get done, and just go do it, no holds barred, you know, get the resources you need and go do it and that has been very successful, you know, i think that great progress on automated cars, google glass, you saw which is the glasses you can wear is another one of those projects and i think we are very excited about the model and there are probably a hundred other thing that ca can be done like that. >> in the end it is human resources that make a difference, isn't it? >> yes, it is people who make this technology, and it is followed by people. >> and how do you engender that

as google because two things, you used to give 20 percent of their time and work on projects. >> yes. >> is that still in effect? >> yes and we have 20 percent time but also we just try to treat people like family, and i think that if you look at companies, my dad's father was an auto worker an he was in the sit down strikes and they had the manufacture weapons to protect themselves, you know, and i hope our employees don't have to do that, right? and you think about the two generations to now where people have all of the services they need at work, they have a opinion that really treats them as family and i think that is a really important thing and i think that will become even more so like that. >> rose: is do no evil still part of the google philosophy? >> absolutely. >> rose: and is it more difficult to do no evil today than it was in the past? with the competition as tougher and big ideas have run into governments? >> you know, i think you get that perception from reading, reading stuff and so on, i think, you know, we face a lot

of difficult issues as a company and, you know, we are again very important company in the world. we take it very seriously and don't be evil is coined by one of our earlier engineers and we really used that in our decision making and we think what is good for the world and i mentioned the issue of reciprocity around data access and so on and i think that, you know, sometimes you have to take a long-term view of that and you say what is really important thing for the world? from a long-term point of view? how is this going to work? how can we be practical about this and achieve the business out comes we need and so on, but that is absolutely very, have very important to us and i think for us to be trusted as a company with your important data, with your important searches and things like that we must be, must be above reproach and really maintain our reputation. >> rose: there is also this. one, the political impact that is being had by technology, social media and more, and the possibility of how what is happening in silicon valley can

change science and change medicine and change the way we live our lives. >> yeah, i think we were amaze, we have this guy whale who is leader of the egyptian liberation that worked for us. >> yes. was here at this table. >> yes. he is an amazing guy and i think that just thinking about that is an amazing thing. and i think that for me, it is incredibly exciting as a person if you think about all of the resources of the, that the world has to solve the problems we have, we have plenty of resources to solve the problems we have, you know, we have plenty of food and all of the basic things we need, materials and so on, we are not organized to do that, and i think that one thing that i think about is the internet technology, companies like google can really get people organized to solve the big problems in the world and at a much faster rate than is happening now, you can get at least everyone in a reasonable standard of living and solve a

lot of the issues we have. >> rose: that's a lifetime work, thank you. >> thank you. >> rose: pleasure. larry page, from google, it really is good, you don't do much of this and i thank you for coming to see me. >> i appreciate it too. >> rose: back in a moment. stay with us. >> rose: marc andreessen is here, he is a founding partner of the venture capital firm and horowitz established in 2009, a company has 2.7 billion under management, it has stakes in grew group upon, skype and twitters, and others, marks yet another phase in the remarkable career of marc andreessen, cofounder of netscape, first commercial web browtioner sold to aol in 1998 for 4.2 billion and created a cloud computing company called loud cloud and sold to hewlett packard for 1.6 billion as well as taking an active role with horowitz he sit on the board of ebay, hewlett packard and facebook, esquire magazine called him the man who makes the future, he is in new

york this week for the for philanthropy summit i am glad to have marc anderson back at this table. true or false, google, facebook, will maintain their dominance because their software -- they have a software head start. >> i think it is a little bit different tan that. i don't think it is so much the head start, i think it is the core idea we have the core this thetheory we have is the fund negligent output of a company is innovation and that's different than a lot of businesses. fundamental output of a car company is cars and tech company is innovation, the value of what you have built so far and are shipping today is a small percentage of the value of what you are going to ship in the future. if you good at innovation, so the challenge tech companies have is they can never rest on their lawyers with today's product and always have to think this terms of the next five years of what comes next and if they are good at running internally r&d machine that produces innovation, they tend to do quite well overtime, it is when things go goes wrote

internally and stop innovating which happens a lot that then the wheels at some point tend to come off flew is that what happened at microsoft. >> you know i think it is too early to tell at microsoft. >> rose: too early to tell when you reminded me and sat down at the table in a conversation about my great friend bill gates that since the with war that took place between met escape and microsoft, that their market price hasn't changed. >> yep. that's true. >> rose: stock piece. >> on the other hand, here is the other thing i didn't mention that is also true of the s&p 500 broadly and also true of most of the big tech franchises. that is actually a different point opoint i would bring heres microsoft specific and more general in the last 15 years technology valuations really haven't bulged like at all. >> rose: really? and the pe radios haven't changed. >> they have come down dramatically, the most amazing story is sisco which is an extraordinary company one of the bellwethers of technology, the pe ratio if you take out cash in the bank is four, so unbelievable.

>> why is that? >> so .. number one, many investors have many questions about the companies and it goes back to the innovation part we are talking about. >> rose: whether they can sustain the performance. >> whether they can sustain the performance. microsoft, will windows phone, will it be big in phones and will this microsoft tablet work and who will they get along with google and so forth. but i just think people are in a really bad mood and particularly in a wad mood about, bad mood about technology. >> rose: bad mood? >> i think we are living through the psychological scarring of the dot-com crash. >> rose: that is su thousand 1. >> absolutely. so from the time of the great, the crash of 29, to the relight okay the stock market is something you would want to invest is in 25 year, it was basically to the mid fifties, right? and so one of the things we learn from the great depression is equity investors who got hit by the great depression never believed in stocks ever again, they just didn't and it took a new generation of stress stores who hadn't gone through the crash to get excited about equities, warren buffett was one of those and he started. these days, what we see in the

valley is the people who lived through the crash, they are starting in many ways defined by it, remember, they remember how horrible it was and hard to get out of this thing that somehow we got cheated or we got lied to, the press suffered suffers from this -- >> rose: but you can argue they overcome it because of what happened to valuations, can't you in terms of -- i mean, look at the facebook ipo, look at market valuations of google, the company's, look how much google made since its original ipo. >> the google pe ratio without cash is 11. >> rose: how about google stock price. >> apple darg. >> rose: google stock price went on up but you say the earnings -- >> >> rose: the really between the two has gone down, because earnings have gone up. >> the same thing with microsoft and chris sew. for the, cisco. this is unprecedented for a company that size, pe ratio,. >> rose: the company on the other hand, their pe over that

time period chanced and the pe less cash is like eight right now. >> rose: it is bigger at that people don't trust tech companies. since 2001 they have memories of the scars. >> they are upset about the crash and here is why i say this. because now we are starting to see people enter tech and seeing entrepreneurs, executives, press, and investors who entered tech who didn't go through the 2,000 crash, and so mark zuckerberg is representative of that and now today's 22-year-old was in junior high or elementary school during the do dot-com bue and they have a completely different mind-set and completely un-- they don't even know what happened, it is a like -- >> you know, you go through a roller coaster. >> rose: tell me what the downs were. >> i mean, i have come to -- i don't know, i have come to expect it, i am a big believer, you are never as stupid as they

say you are and not as smart, it is somewhere in middle, one year you are being told -- >> rose: you were. >> covers like that and the next year you are being told you are -- >> rose: hello, netscape, what you did at netscape was at the follow natural. where is netscape by the way, today? >> it doesn't prevent the other side of the story. so i just love being in the industry, i don't particularly have a problem wit and i plan to be in this industry for the rest of my life. >> rose: so no scars for you? >> i try hard to have it not -- i try hard not to have think lingering effects because i think it compromises your ability to see clearly what is happening now. >> rose: we are not talking about the investor class. >> the investor class and the entrepreneur class. >> but. >> rose: did it have an impact, impact on john dorr. >> i wouldn't talk job specifically. >> rose: you don't have to. >> a lot of venture capitalists i will give you an example, they wrote offer what is called consumer internet, so consumer internet, so internet companies that sell something to consumer, content -- like 2002 and 2006 or

2007, just simply would hot touch those companies and of course that is when face become started and twitter was started a, twitter started. >> rose: twitter has not gone public. are you saying that, in fact, these companies are undervalued their pe ratio is too low, and if, in fact they had an appropriate pe ratio, their evaluation would be even more strat feefk? >> >> rose: it sound like it. >> you want to be careful, i want to be careful when i second-guess the market because you are with the crowd or -- >> rose:. >> to the extent this last ten minutes you are telling me that the reason that the pe ratios are so low because of an aftermath of 2000, of the 2001 bubble. >> yes so one of two things is true, either i am right about that in which case there will be a recovery, then the recovery the pe racial owes will expand more to the normal range. >> rose: so go buy google and apple. >> in that case they are all huge bargains of all-time and we will look back at this like the

mid seventies for stocks and you have to be in stocks. >> rose: and if i do that -- >> it is a possible scenario we are in. and there is an easy explanation for it that would be the case. the other possibility is the market is correct and is looking at big establish tech franchises and together disintegrate which by the way with my venture capital hat on that is fine because the companies we are funding now we would try to pick up the slack. i don't know. i mean, i think, you know, you just take companies any of these companies, that are incredibly strong companies, great management teams and there is a lot of innovation coming out of most of these companies, even the companies not doing well now, they are punching hard and trying to make things happen. so -- >> rose: i think as you have gotten older you have gotten less candid. >> we call it more polish. >> rose: i can remember you saying the most outrageous things when i first met you. i mean it was like anything you said i would say, you have got to get an andreessen take on this, so having said that, having put you up on that

pedestal, what did microsoft lose? what have they not had as google and other companies? have gained traction and phenomenal success? missing the search, missing this and that. >> you know, there is a whole bunch of things, i think the government -- i think in retrospect, even microsoft would say the government prosecution had a big impact. >> rose: in what way? >> i was an intern at ibm in 19 mint and the u.s. department justice went after ibm 30 years earlier. >> rose: not only after that, it took them nine to ten years before they settled that suit. >> yes that's right i was two decades after that ended and thertheeffects were still profod there were all of these lawyers and a bill paul, i think that is why ibm got in trouble, because there was this paul, there is no impact of vl having your government come at you like that and there are all kind of rules. >> rose: herds the government came at them you think they lost something.

>> i think that didn't help, i think they had a generational change inside the company, the technology landscape changing like i started out saying it is too early to tell, these battles come about overtime. >> rose: and do you think ash dab. >> there are some people that retired and literally on the beach, are unavailable. >> rose: are doing other things. >> are doing other things. >> rose: like nathan and others. >> you know, they are, you know, hell-bent to come after the window phone 8, they just announced windows phone 8, surface to surface surface, they are building tablets and bought skype, they bought yammer this week which is a great new enter praise web services company. >> what do they do. >> social networking within companies. >> rose: so each company can create its own social network. >> that's right and tie them together. >> rose: and allows you to do that. >> david sacks is one of the best guys of paypal mafia. >> rose: paypal mafia is

something. >> they are from they justice go on and on and on. >> that's right, that's right. >> rose: what was it in the water at paypal? >> you know, peter, it was peter and mosk, he was his partner. they were just -- >> rose: and going to the moon. >> exactly. very successfully. and so they just had to shift in new -- >> rose: do you have one of those. >> not yet. >> rose: means maybe soon. >> i am holding out. >> rose: why? >> i will see what comes to mark. so they were just a magnetic effect they brought in a tremendous group of talented people, steve chatham. >> rose: it is an amazing alumni. >> yes very smart people and all over the valley and doing all kind of things. it is basically iq test 101 is paypal mafia comes in and you say yes, like it is not -- >> rose: really? in other words, it didn't take a lot of brains somebody are paypal used to be part of that mafia or an alumni they say here.

>> here is the blank check. >> rose: is that what you do? >> i mean. >> rose:s is tort of like that. >> you don't quite do that but there is a strong bias and, you know, the google mafia and focus time there will be a facebook mafia. >> rose: what happened to cheryl stand burgh? >> i understand she is doing well. >> rose: doing quite well, isn't she. >> since she left google. >> rose: explain to me what you think the genius of mark zuckerberg is. >> oh, i would say, he is the genius is comprehensive, he is encyclopedic in what you want in a founder ceo. >> rose: encyclopedic meaning he knows everything. >> he taught himself to be food at everything he didn't start out that way but he applied himself to learning how to be a ceo. he put more work into being a ceo than we realize and a much better ceo that we realize i think he is one of the best ceos in the world at anal 28, by the way. >> rose: he is one of the best ceos in the world. >> yes. and so. >> rose: you are hot just comparing him with other 28 years old you are saying with a guy that runs a company with a

huge market cap. >> yeah, yeah. >> rose: -- he is at the top. >> 4,000 employees, $4 billion in revenue last year. >> rose: what does he know and does that makes it so? >> across-the-board, he built an amazing team and he built that team the hard way, because there was a fair amount of churn until he stable lied on his team and he probably has one of maybe the ttop two or three teams in the valley, which is kind of across-the-board, engineering. >> rose: google? >> yep, exact will i, so he has done that, and he is a tremendous visionary and completely understands what he wants to do with ace book, you know. >> rose: what does he want to do. >> he wants to connect the world, he want to make the world more open and connected. >> rose: he will have a billion soon. >> yes. right. that's right. >> rose: but that is not enough. i mean just so he connects the world what is he going to do with the world connected? >> he is going to do a lot that's one of the questions. he is going to do a lot but other people are going to do a lot on top of that so facebook is a an enabling engine for a lt of other businesses for a lot of nonprofits for a lot of

political movements, on and on and on. and so -- >> rose: essentially will have the field to himself or will binge be a player? >> there are lots and lots of people who would love to be facebook and so there is going to be -- there will be thousand stand of startups that will come at him in the next ten years. >> rose: you see a lot of that. >> they generally don't come pitch me because -- >> rose:. >> i don't see it but they are out there, and then and then, yeah, big cheanls there are a number of big companies that i the think would like to have a more important position in that market so certainly google is competing hard. >> rose: who else. >> twitterable is doing extreme my well, microsoft hasn't yet, we will see what they do. apple now has a partnership but also has their own efforts. >> rose: twitter will remain private? >> you know, you know, that i don't know, they don't talk to me. >> rose: you are not on that board. >> facebook,. >> rose: right, right, right. because there is a question as to who might want to buy them. >> it is rumored everybody. >> if they were to be for sale i think they would be attractive -- it is a very powerful phenom

thon but totally in their hand whether they want to sell or not. >> rose: what is the potential. >> the potential i think is to be basically, think of it as -- i call it the global messaging backbone so basically the place where anybody can put out a message and anybody else can read it. >> rose: i know some people think it has more future impact that facebook. >> i would certainly never support that view. >> rose: oh, stop it. >> but it is a big deal, you this zero, it is a broad -- it is actually a broadcast meem medium, it is more a medium anybody can become a broadcaster and, you know, it is detectly, it and facebook are directly tied into the smart phone revolution with situate a really big deal all of these companies that today are useful, you look at it and say they ought to use a smart phone, in fact in ten years the addressable market will be 5 billion people with smart phones so these people have a lot of room to grow. >> rose: i would suggest a topic we have discussed eloquently on your part when steve jobs died, characterize him again for us what made him steve jobs? >> well, it was -- a whole bunch

of things, you know, obviously, vision, obviously product genius, and we talk a lot in the valley about founders easy and the role of founder ceos and we have run through the full life psyche well the founder, without the founder and then again with the founder and we kind of see how it went, so he is the great example of the founder ceo, of the visionary who is able to run the company, you know, i think one of the understood appreciated thoughts and he thought he was understood appreciated on this is as apple, he said the thing he was proudest of building in his career. >> rose: isaacson -- >> it wasn't an ipad or i-phone but creating a great company. >> a rate company which is what we started talking about what apple, the apple delivers innovation, today it is an i-phone and tomorrow it is an ipad but it is insensation and, innovation and it is going to keep changing and coming out with new products. >> rose: without steve at the helm -- >> apple has been under steve one of the best companies in the history of the old world at

being an innovation machine. >> rose: why do you think that was? was it because this was a guy who understood that if you create the best product and do everything with a maniacal will be at detail and you are some sense of taste and style and depanneding that the engineering be as good as it can be -- >> uh-huh. yes. but it also runs depper than that, it was also very deep ten molg i think the press sometimes focuses on the design part which is important but underneath. >> rose: that's why i didn't do that, i said design and engineering. >> exactly. design and gearing. behind apple a very deep technology these are very so fishisticated and bed at building sophisticated technology. >> rose: i asked this to bill gates yesterday, why is it that steve, you were into all of these technologies at the same time steve was or earlier. tablet, touch, come on, he was. >> yeah, iean the difference obviously bill stepped down from

microsoft, you know, right around -- in the same era when steve stepped back up in apple, this is my point it is very hard -- the problem is history you can't run an experiment again in an alternate experiment. we can't where steve jobs -- we don't know how it could have been different, better or worse, we don't know, we do at apple, apple at steve was not the same apple with steve. >> rose: wait, wait, wait, we know it is not the same -- >> in the interim period, between when steve got fired and when he came back. >> rose: we do know that. >> we know it was not the same. so now apple today, there is a tremendous challenge which is to keep going, but what they have is the benefit of this amazing organization and this is the other part of what steve did is at tracking all of these incredible people. >> all of these guys. >> rose: and they stayed there too. tell me what can be said about that. >> number one the venture is incredibly deep i think there will be some turnover but the bench is very deep, and look if you are an apple and doing the best work of your career and doing the best work you are probably ever going to do, there is something to be said, you

know, these -- underappreciated is the ceo, the really great founder ceos they view that if they just have enough time, there is no constraint on how big or how important of a company they can build and how big of an impact. >> rose: it becomes with tom watson and hewlett packard. >> exactly right and innovation. innovation being the output as opposed to any particular product. >> rose: explain that to me. and is innovation a culture? is it a mindset? it is what? >> it's a whole bunch of things, so a lot of it is talent so being able to get the best and 52 brightest to come work with you to build product and a lot is psychologically being able to eat your own young and to be able to kill -- basically be able to compete with yourself, this is the idea of basically when a tech holling companies gets out innovated it is not usually because it couldn't have built the thing that innovated it because it didn't want to because it didn't want to kill what it already had in the market. >> rose: they didn't want to be cannibalistic. >> not toward itself an what happens is the companies become big bys and they are public and have shareholder and end up in a

lot of cases with high caliber peacial ceos that deliver big numbers to wall street. >> rose: why do you play it so carefully? >> they are very important company and a fantastic company. >> rose: you don't want to offend them? you do not want to offend anybody. what, that's what happens when you get to middle anal. >> i have way too many conflicts. >> rose: it is true. >> yes. so like i said, it is too early to tell. >> rose: too early to tell? what will time tell us? >> we have microsoft has a whole bunch of products entering the market right now. >> rose: ah that may be able to -- >> but don't you see early on in a product, i mean, does a product simply enter the market and then later you say, oh it is going to be good. don't you know? >> you know the iphone got pardon my person, got criticized heavily i was going to use a more colorful term. >> rose: by i don't you. >> no all kind of people in the industry, they said to way of building a new cellphone, they are crazy a lot of people thought it was crazy, the first

ipod said this is ridiculous. >> rose: reviewed by serious people. >> by people my the technology industry saying looked and overpowered mp-3 player, don't you know apple is in the process of going out out of business so there is a lot of moment in the energy, a lot of heat, a lot of energy. >> rose: how long did you take before yo you figured out it waa stupid judgment. >> i always liked my ipod, i didn't make that judgment. >> rose: did it take a jean or ten years later you realize a product. >> two or three years. >> ten years is too long. the -- the windows phone seven gotten great reviews, the reviewers like it a lot, the user that use it used it a lot, android and iphone are just ahead but mike forth is, microsoft is a company that has a lot of staying power. >> rose: that depends on how you look at it, will is good news and bad news, android i think is selling more end units but i-phone is more profitable. >> rose: mobile devices, smart phones. what will they become? >> so the key thing is they are not phones, we have given them

the wrong maim. >> rose: exactly, they evolved out of phones but phone is a pun one percent of what they do at this point, the way i think about it from my background is a supercomputer in your pocket, so in a jurassic park it would be a large supercomputer, they shrunk that down to something to literally it is that powerful. and so it is a magic box in your pkt and can do anything, right, it can run any game and any application and get you anything you want, any piece of information, broadcast video, broadcast to the world, everything and so that is number one, and then number 2, everybody is going to have one, and i think that is the big thing that we are still understood estimating. >> rose: 7 billion on the planet. >> yes. >> rose: many people have two or three? >> well, you know, there is some of that but there is a very large, there is, china mobile alone in china has 600 million subscribers, just one company has 600 million subscribers. >> rose: and the population in china is a billion, three.

>> a lot of people have mobile phones that don't necessarily have running water so it is a big -- it is a big deal. and my theory is those are, all of those phones will be up great graded to smart phone smart phones in the next five of ten years n the future i don't think you can buy a phone that is not a smart phone. and a computer in everybody's pocket and five, ten, 20 times the number of people on line before and we never lived in a world connected like that. >> is there a great fear in terms of where the digital revolution is going. >> so i think, my theory is it is unlocking the human potential, it is -- the visual tech holling does a whole bunch of things, strips away inefficiencies and makes it very hard for businesses that are actually building value to exist,. >> rose: let me talk about something that is happening at rockefeller, one of the things they are asking themselves is how can the digital revolution be used to change the life of the poorest among us in the world? any ideas on that? >> this is what i mean about the

human potential. >> rose: that's what i thought. >> you have to get very -- the specifics are fast but the fundamentals of education the real fund peoples, we give you price trance parents cities one of the, transparency, subsistent farmer in third world countries that have never known the price of their product and so you basically, you zero grow the brain and take it to market and whatever the guy offers you is what you get. >> rose: right, right. >> and so now one of the big things that happened throughout the developing world they go on the phone and learn out what the ice of product is for the first time, basic economic improvements, actual access to education and access for their kid, i think in the developing world and developed world, the number of parents that are going to realize their kids can get a leg up on education by using this technologies that wave is going the hit hard in the next five or ten years, it is going to be very exciting. >> rose: and i really do think and this has been a very interesting conversation to me, i think that this kind of conversation has to take place and people understand we are upon the cusp of something truly and profound that can change the

life of so many people that were untouched by the prosperity in the world. >> yes. and that's why i keep coming back to the smart phone. >> rose: farmers can learn about climate and seeds and everything else. >> yes. >> rose: and find out access to them and get credit. >> yes. >> we have never lived in a world where people are connected the way they are today and where everybody is going to be connected the way they are, we just never liferld in that world so it is zero going to be very excited. >> rose: great to have you here. >> thank you. >> rose: thanks for joining us. see you next time.

captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org >> rose: funding for charlie rose has been provided by the coca-cola company, supporting this program since 2002. and american express. additional funding provided by these funders. and by bloomberg, a provider of multimedia and news and information services worldwide. be more, pbs.