[originaltext]A: But in this recession where so many people are worried about t

A: But in this recession where so many people are worried about their jobs and companies — they can’t get credit, they’re having to lay people off — how do you engender that spirit of innovation? I mean, it’s one thing for a company like Google to give its engineers 20 percent time. It’s another thing for a guy who’s having a tough time making payroll.
B: Well, in the first place a lot of the innovations are going to occur unfortunately, out of people who are in desperation and because people get laid off and so they look around and say, " Well maybe I need to go into business for myself or maybe I need to learn something new." And those are tough times and I’m not trying to minimize the personal cost of going through that but all the literature indicates that going through that often produces amazingly committed and creative leaders who say, " Hey, I’m not going to make the mistakes of the past, I’m going to try and do something different. I’m going to go out in a new direction. I’m going to try to solve a new problem." And that’s again the genius of America.
A: In ten years, given the growth in computing and innovation and the Internet, where is Google going to be?
B: Well, hopefully Google will be very similar to what it is today, just even more products and even more reach. But hopefully the Google that ten years from now will have the same values, the same focus on the end user, the same focus on creativity and innovation and of course the world will have moved on much farther in terms of what we can do. A simple rule about the rate at which things are getting better is something called Moore’s law. Roughly speaking, it’s the doubling of capacity over 18 months. That works out to be an improvement of a factor of 10 in five years and a factor of 100 in ten years. So one way to think about it is that in ten years, the computers you use, the networks and everything you use will be a 100 times faster, a 100 times more capable, or a 100 times cheaper. Think about what we can do with that kind of an insight.
A: Well, how are you going to make money on that environment? Because things are going to be so cheap that you’re just giving a lot of it away. I mean that’s your business model now, right?
B: Well, we like free ...
A: Free is good.
B: Free is good because we use an advertising model. Well I’ll give you an example. I bought a printer for $ 100 and I looked at the printer and I thought " how do they make any money on the cost of this printer?" I mean by the time you add up the cost of this and that and so forth, it’s a remarkable product. There’s no profit margin in it at all, and yet they have become profitable because these are scale businesses and they’ve learned how to manufacture things in volume and still make money. That’s the relentless pace of American capitalism. So one way to think about it in ten years is that there will be even more cost effective solutions for hard goods and soft goods, such as the digital world that I live in, there will still be mostly advertising. We’re going to have more people in subscriptions, people will pay for specialized content, people will pay for what is called " Download to Own". It will clearly be true, for example that the majority of movie sales will be on-line because it will be possible when it is 100 times cheaper just to download the movie to your computer or to your home video. You won’t need all of the infrastructure that exists today.
A: Eric Schmidt. He’s the Chairman and CEO of Google. Eric, thanks a lot.
B: Thank you very much for having me on.
This is the end of Part Two of the interview.
Questions 6 to 10 are based on what you have just heard.
Question 6
Why, according to the guest speaker, does innovation often come in tough times?
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Question 7
What is NOT true about the prospect of Google in ten years?
(Pause: 10 seconds)
Question 8
What’s the purpose of mentioning Moore’s Law?
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Question 9
Why will the majority of movie sales be on-line?
(Pause: 10 seconds)
Question 10
Who is the guest speaker?