Google's happy days are here again

Google CEO Eric Schmidt feels like a man with a glimpse of open highway after being stuck in traffic for hours.

Google is ready to once again hit the gas, with plans to invest in people, products, and companies over the next several months now that it feels much more confident about its business and the economy. When the last recession hit in 2001, Google was still a small growing company, but a year ago the crumbling economy spooked executives into caution mode as they tried to anticipate just how bad things might get.

Now they know. "The worst of the recession is clearly behind us," Schmidt said following Google's announcement of third-quarter earnings that were stronger than financial analysts had expected. "Because of what we've seen we can be optimistic about the future."

That means Google is about to go on an investment binge; although, it probably would object to the term "binge." The most likely scenario is that Google plans to buy a few more companies than it has in the past year, open the hiring floodgates to the types of engineers and salespeople that fit within Google culture, and make sure it has the right technology assets to continue to dominate the search landscape.

That's not good news for anybody who competes with Google. Yahoo reports earnings Tuesday, and Microsoft next Friday, so it's hard to know if they are feeling as optimistic about the upcoming quarter. But Yahoo has been focused more on big strategic questions and product rollouts during the past quarter, and Microsoft CEO Steve Ballmer told CNET earlier this month: "I don't think things are getting worse, but I don't think they're getting a lot better yet either" as Microsoft prepares to launch Windows 7.

One year ago, Google executives weren't sure what kind of mess they had on their hands, as banks failed and markets plunged, said Patrick Pichette, Google's chief financial officer. "Twelve months ago there was a massive crisis going on, and we decided at that time to be prudent about navigating these uncharted territories. (Now) we'll go back to what we do well: innovate, invest, and build the future."

Search will be the main beneficiary of this increased investment, Schmidt said. "We want to get to the perfect search engine," he said, emphasizing that Google's primary focus has always been and will continue to be search despite all the other areas the company has tackled. Mobile searches are growing at a 30 percent clip, Schmidt said, emphasizing that sector as another area slated for investment.

And where there's search, there's advertising, spurring Google to look for new ways of showing ads to searchers. "Many of our advertisers would like to find more ways to spend money with Google if our products would allow them to do that," Schmidt said.

Along those lines, Google is working on developing new kinds of ads, such as the local listing ads that Google is testing in San Francisco and San Diego that offer advertisers a flat-rate listing in the sponsored links, said Jonathan Rosenberg, senior vice president for product management. (Try "San Francisco coffee" in Google for an example.)

Schmidt would like to see Google spend a little bit more on capital expenditures over the next several months, after the company took a cautious approach to such spending over the past year. He noted that Google has been able to wring efficiency from existing servers by tweaking its software for multicore processors, but maintaining Google's army of servers is a competitive advantage: infrastructure spending "creates a very significant platform for future growth."

And Schmidt declared Google "open for business" as far as acquisitions are concerned. He said essentially the same thing earlier in the year, but took things a little bit farther in saying that not only would Google continue to look at small technology companies, it was considering larger acquisitions on the order of YouTube ($1.65 billion) and DoubleClick ($3.1 billion). However, Google is unlikely to make that big a buy more than once every year or two, he said.

Could Google be overconfident? After all, unemployment still remains high, which could mean that retailers are in for another poor holiday shopping season. And any recovery could take quite some time before individuals and businesses feel like spending money like it's 2007.

But Google seems to think that now that it has a baseline for how bad things will get, it can be more aggressive with its formidable resources. If you had taken the worst punch the economy has delivered in generations with little difficulty, you'd probably feel the same way.

by Tom Krazit

How To Keep Kids Safe

Teachers, Principals And Parents Can Help

School violence has become a dismal fact of life, yet many educators continue to respond with not-in-my-schoolyard denial. Not George Sams, an ex-cop who in June 1990 became director of safety and security for Chicago's 410,000 public-school students. With his former police comrades, Sams launched a program called SAFE: Schools Are For Education. Since the program began, he says, there hasn't been a single shooting in the district during school hours.

Operation SAFE hasn't cleared all the guns out of Chicago's schools, but its success has intrigued other districts. Nearly a quarter of all major urban high schools now use metal detectors; what's different in Chicago is the surprise factor. The district moves its three walk-through detectors from school to school on a random basis. "A lot of school districts want to put detectors in every school and use them every day," says Sams. "It won't work. If kids know they have to pass through a metal detector, they'll get the guns into schools through windows or back doors." Another key component is cooperation between city cops (150 of them paid for by the district to patrol Chicago's 70 public high schools) and 412 unarmed security officers. While as a rule police searches require probable cause, in school settings authorities can act on the less stringent standard of reasonable suspicion. In Chicago, once a guard's suspicions prove on target, a police officer can make the arrest.

Legality aside, many school-safety experts worry about turning campuses into armed camps. Arguably, the message search-and-seize tactics convey to kids is: don't get caught. Instead, many educators believe schools won't be safe unless they can find a way to instill basic values of right and wrong, and teach young people to respect themselves and others. Some of the best proposals from the nation's experts:

• Teach the teachers:

Teacher training needs to prepare instructors to deal with disruptive students and to break up fights-before they escalate into murder. The Nation Safety Center (NSSC) has developed a training program in crisis prevention, management and resolution. Too many teachers come to class unprepared-like the one who told NSSC executive director Ronald D. Stephens, "I got my training the day the kids pointed the gun at my face."

• Teach the children:

Schools need to identify fight-prone kids when they're young and introduce them to nonviolent alternatives. Schools can help by offering peer mediation, clear-cut standards for behavior and consistent discipline. But the lessons have to begin at home. Researchers believe that children who witness violent altercations among parents are likely to use weapons themselves. In certain communities, such violence is far from rare. In a study published in 1990, Chicago psychiatrist Carl Bell found that 74 percent of the 1,000 inner-city schoolchildren screened had witnessed a killing, stabbing, shooting or robbery.

• Get involved:

Schools need more adults on campus to provide supervision. Paul Kingery, director of health promotion at Texas A&M University, believes principals should have parents conduct "safety watches," especially at tense events such as football games. Businesses can help by giving time of for employees who want to participate in school programs. And parents should pay attention to signs their kids may be hanging out with a bad crowd-if teens suddenly have a lot of cash to throw around, for example.

• Keep weapons away from kids:

An estimated 80 to 90 percent of gun-toting kids get their firearms at home. Les Burton, a man whose job as chief of police for Houston's schools is itself a sign of the times, believes communities should conduct programs to teach parents how to handle and store their guns. Several states, including California, Iowa, Connecticut and Florida, now have laws that make adults responsible for crimes committed by children wielding their weapons. But while it's important to keep firearms away from kids, forbidding toy guns might actually backfire. Children need to discharge their aggressive feelings, not bottle them up. "Shooting games provide outlets for accumulated frustrations and thus are apt to reduce them," wrote child psychologist Bruno Bettelheim

• In the meantime, be ready to duck:

Cities like Oakland and Los Angeles, and even small towns such as Cokeville, Wyo., have started DBS (drive-by shooting) drills and "drop drills," teaching kids how to hit the floor when gunfire breaks out. It's a sad day when DBS replaces the ABCs, but for too many kids, the No. 1 lesson is staying alive.

BARBARA KANTROWITZ, JOHN MCCORMICK and BUREAU REPORTS

Welcome to Potopia

A nine-block section of downtown Oakland, Calif., has become a modern marijuana mecca—and a model for what a legalized-drug America could look like. Why the stars are aligning for the pro-weed movement.

On the corner of Broadway and 17th Street in downtown Oakland, nudged between a Chinese restaurant and a hat shop, Oaksterdam University greets passersby with a life-size cutout of Barack Obama and the sweet smell of fresh marijuana drifting from a back room. Inside, dutiful students flip through thick plastic binders of the day's lessons, which, on a recent Saturday began with "Pot Politics 101," taught by a ponytailed legal consultant who has authored a number of books on hemp. The class breaks for lunch around noon and resumes an hour later, with classes on "budtending," horticulture, and cooking, which includes a recipe for "a beautiful pot pesto." There are 50 students in this class, the majority of them Californians, but some have come all the way from Kansas. In between lectures, the university's founder, Richard Lee, 47, rolls in and out on his wheelchair greeting students, looking the part of a pot-school dean in Converse sneakers, aviator glasses, and a green "Oaksterdam" T shirt.

Locals refer to the nine-block area surrounding the university as Oaksterdam—a hybrid of "Oakland" and the drug-friendly "Amsterdam," where marijuana has been effectively legal since 1976. Nestled among what was once a rash of vacant storefronts, Lee has created a kind of urban pot utopia, where everything moves just a little bit more slowly than the outside world. Among the businesses he owns are the Blue Sky Coffeeshop, a coffeehouse and pot dispensary where getting an actual cup of Joe takes 20 minutes but picking up a sack of Purple Kush wrapped neatly in a brown lunch bag takes about five. There's Lee's Bulldog Café, a student lounge with a not-so-secret back room where the haze-induced sounds of "Dark Side of the Moon" seep through thick smoke and a glass-blowing shop where bongs are the art of choice. Around the corner is a taco stand (Lee doesn't own this one) that has benefitted mightily from the university's hungry students.

PHOTOS

Pot Propaganda

An education at Oaksterdam means learning how to grow, sell, market, and consume weed—all of which has been legal in California, for medicinal use only, since 1996. For the price of a half ounce of pot and a couple of batches of brownies (about $250), pot lovers can enroll in a variety of weekend cannabis seminars all focused on medicinal use. But "medicinal" is something of an open joke in the state, where anyone over age 18 with a doctor's note—easy to get for ailments like anxiety or cramps, if you're willing to pay—can obtain an ID card allowing access to any of the state's hundreds of dispensaries, or pot shops. ("You can basically get a doctor's recommendation for anything," said one dispensary worker.) Not all of those dispensaries are legally recognized, however: there's a growing discrepancy over how California's laws mesh (or don't mesh) with local and federal regulations. But Oakland is unique in that it has four licensed and regulated dispensaries, each taxed directly by the city government. This past summer, Oakland voters became the first in the nation to enact a special cannabis excise tax—$18 for every $1,000 grossed—that the city believes will generate up to $1 million in the first year. Approved by 80 percent of voters, and unopposed by any organization, including law enforcement, the tax was pushed by the dispensary owners themselves, who hope the model will prove to the rest of California that a regulated marijuana industry can be both profitable and responsible. "The reality is we're creating jobs, improving the city, filling empty store spaces, and when people come down here to Oakland they can see that," says Lee, who smokes both recreationally and for his health, to ease muscle spasms caused by a spinal cord injury.

Nevertheless, like much of the country, Oakland is suffering economically. The city faced an $83 million budget deficit this year, and California, of course, is billions in the red. So from a public-coffers perspective, if ever there were a time to rethink pot policy, that time is now. Already in Sacramento, there is a legalization measure before the state assembly that the author claims could generate $1.3 billion in tax revenue. And while analysts say it has little hope of passing (it faces strong opposition from law enforcement), the figures prompted even Gov. Arnold Schwarzenegger—who's vetoed every marijuana-related bill to come across his desk—to proclaim, "It's time for a debate." On a federal level, marijuana is still illegal—it was outlawed, over the objections of the American Medical Association, in 1937. But in February, Attorney General Eric Holder stunned critics when he announced that the feds would cease raiding medical-marijuana dispensaries that are authorized under state law. "People are no longer outraged by the idea of legalization," wrote former San Francisco mayor Willie Brown in a recent op-ed. "And truth be told, there is just too much money to be made both by the people who grow marijuana and the cities and counties that would be able to tax it."The arguments against this kind of operation are easy to tick off: that it glamorizes marijuana, promotes a gateway drug, leads to abuse. Compared with more-serious drugs like heroin, cocaine, or even alcohol, studies have shown the health effects of marijuana are fairly mild. But there are still risks to its consumption: heavy pot users are more likely to be in car accidents; there have been some reports of it causing problems in respiration and fetal development. And, as the director of the National Institute on Drug Abuse, Dr. Nora Volkow, put it recently, there are a number of medical professionals, and many parents, who worry that the drug's increased potency over the years has heightened the risk of addiction. "It's certainly true that this is not your grandfather's pot," says Mark Kleiman, a drug-policy expert at the University of California at Los Angeles.

By Jessica Bennett