Ladies and gentlemen, please welcome Executive Chairman of Alphabet, Dr. Eric Schmidt.
Good morning. We were wondering about the music as a sort of wake-up music. Thanks, everybody, for coming. It's a delight to be here, and welcome to our 2016 shareholder meeting. My name, as you know, is Eric Schmidt. I'm the Executive Chairman of Alphabet, and I'm presiding over the meeting. Everybody here should have registered. If you have not registered, please register before you leave, just so we know that you were able to attend. Everybody here has an agenda. On the reverse side, we have a set of rules and procedures and so forth, and please abide by those, of course. We're going to call this meeting to order. It is my distinct pleasure to introduce a number of people that I have worked with for a very long time and who are close friends and extraordinary leaders.
John Doerr is over here on the corner, my friend for at least 35 years, and one of our key directors, of course, David Drummond, who will be with us shortly. Sundar Pichai is here, and Ruth Porat is here, and you'll be hearing more from them later. Also with us is Maura Stanley, a representative of Computershare, our transfer agent, and she'll act as our inspector of elections. And Barbara Martini-Ellis and Matthew Taggart, representatives of E&Y, our independent accountants. Where are they? Can you say that? Right here and over here. Okay, good. Hiding in the corner.
As has been our policy for those of you who've been here in the past, we're going to have our formal part of the meeting, and then what I'll do is I'll come in and talk for a bit, and then we'll have a hopefully very interesting and impactful Q&A as we go. So what I want to do is introduce David. It's hard to describe the contributions that David has made to this company, to the industry. David, of course, was the person who signed the incorporation documents of the original company. He also signed the incorporation documents of the new company, right, David? So here to take us through all of the formal things that we have to do, it's important activities. David Drummond, our Chief Legal Officer, Corporate Development, and Secretary. Thank you, David.
Thanks very much, Eric, and welcome everybody to another annual shareholders meeting for now Alphabet, and we really appreciate your being here. We'll get started with the business of the meeting. Just a quick note before we begin, in terms of procedure, stockholders should not address the meeting until we actually get a chance to recognize you. We'll provide a Q&A period at the end so you can come up and ask questions to management, and that'll be after the formal business of the meeting. When we get to the Q&A period, if you want to ask a question, please move to one of the mics. We'll have those set up at the.
Then when you sort of stand up, ask your question, identify yourself first so we know who you are, say whether you're a stockholder or you're a stockholder representative, and then ask your question. Thanks very much for adhering to these rules. Now, I've received the affidavits of mailing from Computershare and Broadridge, which state that the notice for this meeting was duly given. All stockholders of Class A and/or Class B common stock, as of the close of business on April 11th, 2016, are entitled to vote at the meeting. In addition, I've been advised by the inspector of elections that holders of our outstanding Class A and Class B common stock, representing at least a majority of the voting power of that Class A and Class B common stock outstanding, and that which are entitled to vote is represented today in person or by proxy.
So therefore, a quorum is present, and the meeting is duly constituted, and we can proceed with the business. So first item of business is the election of directors. We have 11 directors who will be elected at today's meeting. Those directors will serve until the 2017 annual meeting of stockholders. The nominees are Larry Page, Sergey Brin, Eric Schmidt, John Doerr, Diane Greene, John Hennessy, Ann Mather, Alan Mulally, Paul Otellini, Ram Shriram, and Shirley Tilghman. Now, our bylaws require that stockholders provide advance notice of their intent to nominate persons as directors. We didn't receive any such notices, so therefore I declare nominations of directors closed. Now, the next matter being submitted is the ratification of our independent accountants. This is the appointment by the board of Ernst & Young, our registered public accounting firm.
Our board has recommended that our stockholders ratify this appointment of Ernst & Young for the 2016 fiscal year. The next matter being submitted is approval of amendments to Alphabet's 2012 stock plan to increase the maximum number of shares of our Class C capital stock that may be issued under the plan by 11,500,000 shares of Class C capital stock, and secondly, to cap the aggregate amounts of stock-based and cash-based awards which can be granted under that plan to any non-employee member of the board of directors in any calendar year with respect to the service on the board, to cap that amount at $1.5 million. Now, our board of directors has recommended that our stockholders approve these amendments to the stock plan, and those are described more fully in our proxy statement.
The next matter being submitted to our stockholders is approval of an amendment to the Fourth Amended and Restated Certificate of Incorporation of Google Inc., which is Alphabet's wholly owned subsidiary, to remove a provision that requires the vote of stockholders of Alphabet in addition to the vote of Alphabet itself, which is the sole stockholder of Google, in order for Google to take certain actions. Our board of directors has also recommended our stockholders approve this amendment to the certificate of incorporation, and again, that's described more fully in our proxy statement. Now, the next six items being submitted are all stockholder proposals. Our board of directors has reviewed all of these proposals and recommends unanimously that our stockholders vote against these proposals that will be presented today. Now, the first stockholder proposal is being brought by Mr. John Chevedden, Mr. James McRitchie, Ms.
Myra Young, and the NorthStar Asset Management Funded Pension Plan as co-lead filers. And I believe we have Ms. Abigail Shaw, there she is, of NorthStar Asset Management, who's going to present the proposal. Ms. Shaw, you have three minutes. The floor is yours.
Good morning. My name is Abigail Shaw from NorthStar Asset Management in Boston, the beneficial owner of over $3.8 million of Alphabet common stock. As Alphabet shareholders know, our company has three classes of stock: Class A with one vote per share, Class C with zero votes per share, and Class B with an overwhelming 10 votes per share, which is closely held by management insiders. This discrepancy hands over a super majority of control of the firm to insiders, essentially making it impossible for stockholders to weigh in. Yet the concern we raise here is not just about fairness. We are also concerned that insiders and management seek to insulate the governance of the firm from shareholder oversight. Studies have shown that excessive voting control given to insiders leads to poor performance over the long term.
In fact, a study has reported that the more control that the insiders have, the more they can pursue strategies that are at the expense of outside shareholders. Studies have also shown that, on average and over time, companies with multi-class capital structures underperform those with a one share, one vote standard in which owners' economic risk is commensurate with voting power. In a world where our company's primary purpose is to expand access to information and knowledge in an open and democratic way, limiting substantial shareholder input is wildly counterintuitive. We feel that shareholder value is best derived when insider voting control of the firm is separated from insider economic ownership. Economic ownership provides enough of a reward for management when stock prices rise. The current tri-class structure eliminates shareholder checks and balances over management decisions.
Without a tally of one vote per share, claiming that stockholders accepted or rejected a proposal means little more than that Mr. Page, Mr. Brin, and Mr. Schmidt voted for or against it. We are very concerned that the use of insider control at Alphabet will inhibit shareholders from weighing in on company governance and policy issues, with detrimental effect on shareholder value over the long term. We urge you to vote for proxy item number five.
Thanks very much, Ms. Shaw.
Thank you.
So we'll move to the next stockholder proposal, which is being brought by Walden Asset Management as the lead filer, joined by a number of other organizations as co-filers. And I believe we have Ms. Danielle Ginach of Sonen Capital will be presenting the proposal. Ms. Ginach, you have three minutes.
Thank you very much, and congratulations on pronouncing my name correctly. Good morning, Mr. Chairman and fellow shareholders. I'm Danielle Ginach of Sonen Capital, an impact investment firm based in San Francisco. I'm representing Walden Asset Management, the primary sponsor of this proposal, which owns 44,500 shares of Alphabet. On behalf of Sonen Capital, Walden, and approximately 25 co-filers, I'm pleased to move resolution number six, which has been voted on by Alphabet stockholders for the last several years. As you can see, this resolution seeks information on how Alphabet directly and indirectly works to affect legislation and public policy. This request for transparency has been made to hundreds of companies over the last five years, having been acknowledged as best practice by the investment community. Lobbying is big business for Alphabet.
In the last five years, Alphabet spent over $79 million in federal lobbying and has been one of the top five companies lobbying in the last few years. While Alphabet discloses a summary of their direct federal lobbying on its website with links to reports they provide the Senate, these Senate quarterly reports are very difficult to navigate. It would be very easy to summarize these dollars spent quarterly and highlight the major issues Alphabet lobbied on, along with the links, adopting a best practice in disclosure and transparency. Alphabet also does not disclose meaningful details on dues and grants provided to over 100 trade groups and advocacy organizations it is part of, nor how it evaluates whether the lobbying positions of these organizations are consistent with Alphabet's priorities and values, as well as the company mantra to do no evil.
In order to better understand Alphabet's role in trying to affect legislation and regulation, additional disclosure is needed. Once again, we'd like to congratulate Alphabet for the company's public decision to withdraw from ALEC, a known climate-denying group actively working to combat renewable energy standards at the state level. Alphabet acted on its stated values when it withdrew from ALEC, an action we enthusiastically commend. Now, over 100 companies have followed suit. However, there are other trade organizations whose actions conflict with Alphabet's values. For example, Alphabet is an active member in the U.S. Chamber of Commerce, a group which has spent over $1 billion on lobbying since 1998 and has currently sued the EPA to block the EPA's Clean Power Plan to address climate change. Clearly, this creates an outright conflict with our company's stated environmental position to address, limit, and mitigate the effects of climate change.
Apple, for example, was so offended by the Chamber of Commerce's policies and actions that they publicly withdrew membership. As a logical expression of Alphabet's stated policies, we ask that the company also speak out to proactively distance itself from the Chamber's actions which impede climate policies at a national and global level at a critical time following the Paris Climate Conference. We're pleased to see Alphabet join with other companies in endorsing necessary forward-looking legislation and regulations on climate change otherwise. Our company remains a national leader in articulating and working to live by positive social and environmental values. Alphabet's vision and environment echo the environmental ethics of many of its employees and deserves to be reflected on how lobbying dollars are spent.
Our final point: for several years, investors have written to top management and filed resolutions on the topic, simply seeking an opportunity to meet and talk with management and hear Google's perspective. But our letters and calls have gone unanswered. We are perplexed. Alphabet has a strong investor relations record in general, so why wouldn't the company simply agree to meet or talk on the phone with investors who simply want to hear and better understand Alphabet's policies to find a middle ground and make shareholder resolutions such as this one unnecessary? Thank you very much.
Thanks very much, Ms. Ginach. So the third stockholder proposal is being brought by Clean Yield Asset Management on behalf of John Fedor-Cunningham. I believe we have Mr. Michael Passoff of Proxy Impact to present this proposal. Mr. Passoff, you have three minutes. Thanks.
Thank you. Good morning, everybody. My name is Michael Passoff, and I've been asked to read the following statement on behalf of the filers of the proposal, Clean Yield Asset Management. Our proposal, number seven on the proxy ballot, calls on Alphabet to fully disclose the extent of its political spending. Specifically, Alphabet has refused calls to disclose what it contributes to the so-called dark money nonprofits, such as trade associations and 501(c)(4)s. These are entities that can receive payments from corporations but do not have to disclose the source of these contributions. In the 2012 and 2014 election cycles, dark money groups spent more than $474 million to influence electoral outcomes. Two years ago in this venue, a shareholder made the same point to Mr. Schmidt, and he responded, and I quote, "Let me summarize your request. We need to be more transparent. Is that right? We get it.
We've heard that from a number of other shareholders, so let us come back with some ideas. We get a very clear set of messages from a number of shareholders about this transparency issue already." But there have been no ideas to date, so we'd like to know why it's okay for Alphabet to contribute the company's money secretly to groups that can spend it however they wish, even in ways that conflict with the company's values. Alphabet showed real spine when it quit ALEC, but it still has an expansive political footprint, supporting about 140 trade associations and other nonprofits across the political spectrum. The reputation risks are not hypothetical. Alphabet has come under heavy criticism in the media for its aggressive lobbying of the European Commission. These activities contribute to the public's worst suspicions that the U.S.
Political system is rigged in favor of large donors, which is a key factor in the political instability we are experiencing in the U.S. Please vote in favor of proposal number seven. Thank you.
Thank you, Mr. Passoff. The fourth stockholder proposal is being brought by the Firefighters Pension System of the City of Kansas City, Missouri, Trust. Mr. Glenn Johnson of Marco Consulting Group will be presenting this proposal. Mr. Johnson, please proceed.
Thank you. Good morning. The Firefighters Pension System of the City of Kansas City, Missouri, requests the board of directors to amend the company's governance documents to provide that director nominees be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders. The plurality vote standard would be retained for contested director elections. Under the company's current vote standard, a nominee for the board can be elected with as little as a single affirmative vote, even if a substantial majority of the votes cast are withheld from the nominee. The firefighters believe a majority vote standard in board elections would establish a challenging vote standard for board nominees and improve the performance of individual directors and entire boards.
With a majority vote standard in place, the board can then consider an action on developing post-election procedures to address the status of directors that failed to win election. A majority vote standard combined with a post-election director resignation policy would establish a meaningful right for shareholders to elect directors and reserve for the board an important post-election role in determining the contingent status of an unelected director. We urge shareholders to vote for this proposal.
Thanks very much, Mr. Johnson. I believe for the fifth stockholder proposal, you have an encore performance. So this is brought actually by the Marco Consulting Group as the lead filer. Please proceed.
The Marco Consulting Group Trust asked the board of directors to adopt a policy that the board chairman should be a director who has not previously served as an executive officer of the company and who is independent of management. The chairman is responsible for protecting shareholders' long-term interests by providing independent oversight of the chief executive officer and management in directing the corporation's affairs. Chairmen of the boards of publicly held companies enhance oversight and accountability of management and ensure the objective functioning of an effective board by setting agendas, priorities, and procedures for the board. The Marco Consulting Group views the alternative of a lead outside director, even one with a robust set of duties, as adequate only in exceptional circumstances fully disclosed by the board.
If you agree with the proponent of this proposal that oversight of company management can be diminished when the chairman is not independent, please support this proposal. Thank you.
Thanks very much, Mr. Johnson, so our final stockholder proposal is being brought by Arjuna Capital as the lead filer on behalf of clients Anne Alexander, Michael Baldwin, and Margarita Baldwin, as well as the Sustainability Group on behalf of the William B. Perkins Trust and Proxy Impact on behalf of CV Wealth Generation LLC, all as co-filers, and I believe we have Mr. Passoff to come back for another three minutes.
Yes, thank you.
Thanks.
So I'm here to move proposal number 10, the resolution asked Alphabet to report on the company's policies and goals to reduce the gender pay gap. This is a particularly important issue to the tech industry, which struggles to attract and retain women workers, and where male IT professionals reportedly earn nearly 10,000 more than female IT professionals on average. Glassdoor's 2014 tech company comparison by gender reports senior software engineers at Google earn $25,000 less than their male counterparts. Intel set the bar for what criteria should be included in a gender pay gap report, as they provided information on base salary, bonuses, and stock awards. Using this formula, they found a pay gap and publicly stated how they would address it. Other companies, including Apple, Amazon, and Microsoft, have been less forthcoming than Intel.
Apple, for instance, says it has no gender pay gap, but they only reported on base salaries, which makes this conclusion questionable. When we spoke with Alphabet a few months ago, the company said it would only report on base salary, the same as Apple. We told Alphabet that reporting on base salary is a good first step, but any true accounts of a potential gender pay gap must include base salary, bonuses, and stocks. And if Alphabet were willing to publicly commit to doing that by a specific date, then we would withdraw the resolution. Alphabet came back and said it was not willing to commit to a report or a timeline. So my question to you is, do we want to be an industry leader or a laggard?
Will Alphabet follow industry leader Intel and provide a full financial account and identify steps it'll take to address any problem, or will you copy Apple and eventually doing the minimal amount and try for a big headline that we have no pay gap, which no one will believe since we haven't disclosed all the pay elements? ISS, the nation's largest proxy advisory service, has already made up its mind, as their vote recommendation states, "A vote for this resolution is warranted, as Alphabet lags its peers in addressing gender pay disparity. By not addressing this issue at the same level as its peers, Alphabet is put at a competitive disadvantage in recruitment of candidates and retention of employees." Alphabet can do better than this.
So I'd like to ask you now, in front of everyone, to commit to a gender pay report that includes base salary, bonuses, and stocks, and to commit to a timeframe of when it'll be completed.
Thanks very much. Are you finished? You have 30 seconds.
Can we get a commitment?
If you'd like to discuss this in the Q&A, we can discuss it. So thanks very much, Mr. Passoff. So because no further business is scheduled to come before the stockholders, we're going to open the polls for those of you who haven't had a chance to vote yet. Obviously, if you've previously voted by proxy, you don't need to vote today unless you wish to change your vote. And I should advise you that we've received sufficient proxies before the meeting to know that the proposals we've discussed today will pass or fail in accordance with the recommendation from our board of directors that's in the proxy statement. But we want to make sure everybody gets a chance to vote. So if you'd like to vote and you have a ballot and you requested one, or if you need one, please raise your hand.
We have some folks who can get one to you. Okay, it looks like everyone who's requested a ballot has had a chance to receive one. You can go ahead and, when you complete it, you can go ahead and pass it down to the folks collecting those. But at this point, I can declare that the polls for each matter that voted upon at the meeting are now closed, and I'd like to direct the inspector of elections to collect all the ballots, and it looks like we've got all of them. Yes, so results of the voting, the inspector of elections has advised me that the nominees for election to the board have been duly elected.
I've also been advised that the majority of shares of our Class A and Class B common stock that are entitled to vote and are present today at the meeting or here by proxy have voted in favor of the ratification of the appointment of Ernst & Young as our independent registered public accounting firm for the 2016 fiscal year, and second, the approval of the amendments to our 2012 stock plan. Now, I've also been advised by the inspector of elections that at least two-thirds of the voting power of the issued and outstanding shares of our Class A, Class B common stock entitled to vote have also voted in favor of the amendment to Google's Fourth Amended and Restated Certificate of Incorporation. So therefore, each of these proposals has been approved by our stockholders.
In terms of the stockholder proposals, I've been advised that a majority of the shares of Class A and Class B common stock entitled to vote and present at the meeting in person or by proxy have voted against one, the shareholder proposal regarding equal shareholder voting, the stockholder proposal regarding a lobbying report, the stockholder proposal regarding a political contributions report, the stockholder proposal regarding the adoption of a majority vote standard for the election of directors, and the stockholder proposal regarding an independent chairman of the board policy, and finally, the stockholder proposal regarding a report on gender pay. So therefore, each of these stockholder proposals has not been approved by our shareholders. Now, as soon as possible, after the meeting, we'll have a final vote tabulation, and we'll provide the vote results on our investor relations website, also in a filing with the SEC.
So that ends the official business of the meeting, and I declare the formal portion of our meeting adjourned. Eric is going to come back and make a few remarks, and you'll have an opportunity to ask any questions that you might have. At this point, I need to make the fun disclaimer that our remarks and presentations and answers to questions that you might ask may contain forward-looking statements about our business outlook and other matters. The actual results and outcomes for these things may, of course, differ from the forward-looking statements that we might make because of risks, uncertainty, the way of the world. Now, these risks and uncertainties, we've spelled out in quite a bit of detail in our public filings with the SEC. So with that, I'll turn it over to Eric.
Okay, Google, show me the trailer for Angry Birds.
How old is the Taj Mahal? Whoa, take me there. What's the cocktail's full name? Pablo Diego José Francisco de Paula Juan Nepomuceno María. You're on the fastest route. Play Laughing Owl. Okay, Google, get out of my cell. Hello? Show me my graduation photo. Post-its on my block. It's 29 degrees and clear. Your order has shipped. Thank you very much, David, for all of that. And we have a lot of fun with our videos and so forth.
You can see from our video how important voice has become. I wanted to spend a couple of minutes talking about where sort of the world is a little bit and the state of our industry. And I want to start by saying that I'm a fan of the quote from Alan Kay that the best way to predict the future is to invent it.
I think we start from that premise here at Alphabet and Google and all the others. It starts fundamentally with entrepreneurs. I've become convinced that we need to produce more entrepreneurs everywhere, right, in every industry all around the world and all that kind of stuff. We should take a minute and thank all the entrepreneurs that have created the great companies all around us, right? Starbucks, SAP, Microsoft, Tesla, Apple, Facebook, Google, you name it, right, and earlier generations of these companies as well. Because these are people who somehow believe that they can make the world different and better.
And they're willing to take their own lives, their own time, and so forth, and their own risk capital and put it together to create literally millions of jobs and ultimately trillions of dollars of wealth for all of us as shareholders and all of the people that we know. The reason I want to emphasize entrepreneurs is that entrepreneurs are how we get out of a lot of problems in the world. Because entrepreneurs, as a general group, are the people who are going to invent the next solutions in chemistry, in medicine, in transportation, in information. And I want to talk a little bit about that. But we have a role too, those of us who are not entrepreneurs. And I'm not an entrepreneur, but I have great respect for them. We need to set more ambitious goals as a society.
Somehow, in the last decade, we've lost something that we used to do. We used to sort of say, "Here's a grand challenge. Here's something which will change the world in an amazing way." People here who are old enough will remember the development of the interstate highway system, which was originally justified for moving military missiles around. Now, imagine if we hadn't done that, what would have happened to the GDP and the growth of the states of our country? So there's example after example of the sort of great challenges, right, whether it's man on the moon, literally a true moonshot, but many others, the Human Genome Project, the race. And how did these things happen? What was interesting was that the technology for these things was developing. And there was a point at which there was a consensus that developed among a number of people.
It wasn't just one person. We always like to celebrate the one entrepreneur. But in fact, these are ecosystems of people who ultimately came together to build all of the piece parts. In our industry, this is the PC Revolution, the Internet Revolution. There's no single founder of all of this. It's a set of people who knew each other, who figured out a way to grow this and make it happen. The U.S. government can help here. For example, Obama has announced a brain initiative. Vice President Biden has announced a cancer initiative. Sean Parker just donated $250 million because there was a new breakthrough in immune therapy, excuse me, involving boosting white blood cells at the cost of red blood cells that works. There was a consensus that somehow we could make substantive forward progress right then and there.
So there are these moments in time, and I want to highlight some of those and explain how that ties to what we're doing here. But it seems to me that the core issue is a lack of imagination and a lack of asking, "What can we all do?" If you go back to the John F. Kennedy quotes, "What can you do for your country?" What can we do as citizens, as political players, as donors, as shareholders, as leaders to try to address these? I am personally tired of the zero-sum game that everyone says, "Well, nothing can change." I think we've got evidence that an awful lot is going to change and get much, much better.
Now, before I talk about some of the general themes, let me highlight some of the things that I just literally made a list of things that had happened recently at Alphabet, and we can talk about this in the questions. We have a project in a company called DeepMind that is an attempt we started off trying to play the game of Go. If you don't know what Go is, it's a very, very hard game. It's thought to be sort of incomputable. And the underlying algorithm, which mimics human intuition, was used to call the choices and ultimately win against the best human in the world after all in Korea in March, four to one, right? An enormous accomplishment, both for the game of Go, right, because everyone now playing is playing much better, but more importantly, the development of those algorithms.
This happened because of curiosity. It happened because people cared about it. Google Fiber is now in five cities. Once you're on it, you never leave, right? The power, the strength of that platform. By the way, the cities are Kansas City, Provo, Atlanta, Nashville, and Austin, right? I wish I lived in one of those. That's how important that is for us. Self-driving cars, right? I'll talk about this some more. We're now testing in Kirkland, Phoenix, Austin, and Mountain View. We've done a deal with Fiat Chrysler to do 100 modified minivans, right, to begin developing this into real products. Verily, our life sciences group, Verb Surgical, is a joint venture which Johnson & Johnson does through joint ventures, is developing surgical solutions that incorporate a leading-edge robotic capabilities using machine learning, right? Extraordinary. Think about what that will do for reproducibility of these results.
There's a promising collaboration with Biogen we've just announced and Brigham and Women's Hospital to study multiple sclerosis. There's an idea that these entrepreneurs have that we can take the digital world that I'm more familiar with and apply it to areas where people have been doing bespoke work and that we can systematize, for example, the diagnosis and treatment of multiple sclerosis. There's a feeling that this can be done for other diseases, for example, certain mental diseases and so forth. As an aside with respect to Verily, I want to say that we have put in place a very, very strong oversight group. There's been all this stuff in the news about other companies. In our case, we're very, very confident of not only the approaches, but also the controls, reviews, and processes that will ultimately produce some amazing medical breakthroughs. Nest, right?
We have millions of people using Nest thermostats in more than 200 countries. We have a whole product line now. We have 12,000 retail stores doing it, and it's growing at 50% year over year, faster than the overall company. We have these balloons, right, and balloons are floating around the Southern Hemisphere, providing test signals for LTE signals for people in an incredibly rural area, and when you study the globe, the hardest area to get your cell signal in the most impoverished areas is over the Southern Hemisphere in places like remote Brazil and in Africa, in the ways everybody here knows that stuff actually works. We have a group under Alphabet called Sidewalk Labs, and they've decided to rethink the way cities work. Now, most people live in cities. Cities are the engines of growth. There's more productivity in cities. There's lots of crowding, lots of issues.
We think we can apply new technologies of one kind or another in conjunction with, in this case, a group called Transportation for America to do this. In fact, there are now Best Cities initiatives, which we're competing in. We're sort of educating people on what is possible using the merger of digital technology and the problems that have bedeviled cities for a very long time. This is a platform that's, again, innovative and revolutionary. Of course, I have to talk about Google. I tried to make a list of Google accomplishments, and it's so long, it sort of takes too long, right? We can just talk about it in the Q&A. We have seven products, right? It's extraordinary, with more than 1 billion monthly active users, right? Search, Maps, Gmail, Chrome, Android, Google Play, and YouTube. I probably missed one or two smaller ones, right?
In my career, I never thought we would get to one billion in one. Certainly, when we started here, when I started here, it was inconceivable we would get to that. It gives you a sense of the impact that Google has had overall. To give you an example, in the one billion club, there are now more than one billion users of Chrome on mobile, right? If you're not using Chrome, you're missing the party. Also, you're more vulnerable to security attacks. It's faster. It's also free. That's the ideal price. I'm a huge user of Google Photos. Now, Google Photos, oh, you know, Google Photos, no big deal. It's a huge deal because you upload your photos. You do this exactly once in your lifetime. Then the algorithms that we use organize them. This is completely private to you.
and they'll do face recognition, and you can organize by all your friends and family. It'll do various event recognition and so forth. All, again, incredibly private and incredibly under your control. This is just the beginning of machine learning applied to your life, right, in the sense that I love this. I have my entire life, literally from pictures my parents took when I was born. And I can sit there and look at the evolution of me, right, the good and, by the way, the bad, which I will not discuss because the pictures are pretty horrific, like when I was a teenager. In the enterprise space, we have more than 2 million paid businesses using Google Apps for Work, right? So again, the scale of this is amazing. Now, why do we do this, right?
If I go back to this moonshot idea of a sort of notion that I said that we're not dreaming big enough. Since a year ago, this company has said, "We're going to do our part to set a broader agenda," right? That we're literally going to say, "These are solvable problems." And we've created these other initiatives. Some will do great. Some will do poorly. They're led by very strong CEOs. It's a dynamic environment, right? We'll change them. We'll address them. But we're very serious about it. And we spend a great deal of time trying to manage these as independent businesses to build real businesses that scale.
Over the next three years, you'll see the ones that will grow very quickly and the ones which will add and the ones which will sort of go and try to resuscitate because the product didn't work as well as we wanted. And that's how innovation really works. So to give you some examples, and I'll do this relatively quickly, of what the future could hold. And these are not necessarily things we're currently working on. I was trying to make a list of sort of the five or six most interesting things that are going to happen in the next five or 10 years. And I was thinking first about what I call nerds over cattle. Now, I like cattle as much as anybody else does.
But the fact of the matter is 10% of global warming comes from beef and beef byproducts and the fact that cattle exists. And if you could figure out a way to do things like meat from plants and from growing from cellular organisms and so forth. And there's now a huge industry, right? Google is not a direct player in this, but it's an example of what is possible. Can you imagine if, in fact, you could build, you could grow, and there are startups doing this now, a perfectly great steak that's grown organically in such a way that it isn't full of pesticides and those kinds of things, and particularly with antibiotics? Very interesting. Again, even if you don't like the idea, imagine if it tastes really good. We'll see. 3D printing of buildings, right? We hear about 3D printing all the time.
There are people now building 3D printing of buildings where they say, "We think we can build buildings much, much more quickly," right? Retaining the dynamic nature and differentiator and then all not going to look like white boxes and so forth. But imagine if we can get the cost of those buildings down by a factor of three or four or five using new materials and allow you to remodel them very quickly and things like that. There are people working on this. Google, in fact, has a large effort in virtual reality. And the idea here is that many people are working on high-end aspects of virtual reality, but they're too expensive. We want to do things. We have this product called Cardboard, which I'm sure you've seen. It advances a whole suite of products to author video and entertainment.
We think that this is going to be a very large future revenue stream, for example, in the entertainment industry, sports, games, that kind of stuff. We're also working on augmented reality. Augmented reality is when you look through your normal eyes, the two that you have, but we give you additional information around you rather than giving you a completely different world. There's evidence that we can now do that in ways that really improve your productivity and make you work better and so forth. Google Glass was a first attempt of that, with much more coming. I'll give you another example having to do with medicine. It's pretty clear that the mobile phone is going to be something that will be a lifesaver for you in the sense that it will be your primary health monitoring device. Now, it'll have things attached to it, right?
Devices of one kind or another, for example, the equivalent of a wristband, will be able to monitor your health. And transdermal monitoring is now possible. Again, our Verily group has projects of this category that they've talked about with respect to diabetes monitoring, right, where literally there is a contact lens which has the world's smallest battery, which then essentially Wi-Fi's out the status of your glucose level. Now, if you're one of the very many people who will have diabetes in America, and by the way, it's worse in many other countries, this is going to be a lifesaver, right, in terms of keeping you alive, especially as the disease progresses. Does this matter? Absolutely. It's pretty clear, for example, that imaging and radiology is now a solved problem by computers.
That if I have a scan of a dermatological scan or whatever, I really want the computer to read it, and then I want the human to sort of see if they agree. Now, you say, "Well, why would you want to do it that way?" Well, I'll give you an example. We have a project. There's a disease called diabetic retinopathy where the diabetes gets bad enough that the back part of your retina gets screwed up and you go blind. It's a horrific disease, especially in the developing world. We can detect it 99% of the time. The average, sorry, the best ophthalmologists get it right about 90% of the time. Now, how is that possible, right? I mean, I'm not an ophthalmologist, right? Our engineers are not ophthalmologists. How do they do it? The answer is really simple. They see more eyes.
They saw a million eyes, whereas the average ophthalmologist sees 10,000, 20,000. So you sit there and you go, "What a key insight that we can now do," right? And these are projects in various states in our research labs for things that we care about. There's a revolution in genetics. There's a technology called CRISPR-Cas9, which allows you to sort of add and delete genes, right? And you can do it in a particular way. There are projects now to start beginning new genetic sequences with an eventual goal, for example, of the ability to construct a chromosome. Because of the merger of machine learning, databases, and then the science work, which is Nobel Prize-winning from a number of players, it's possible now to really unlock the keys of life. Do you care about this?
It's the reason that you're going to ultimately get a drug that will cure cancer, right? The cancer that you have or the other genetics-related diseases that are possible. And if you've spent any time recently with somebody suffering through this, you understand how important it is. Now, what's Google's role here? It turns out that we have platforms that do the manipulation of this data. Now, we're not scientists in this area, with the exception of Google Life Sciences. But we have an initiative called the Google Brain Initiative, where we try to sort of take this kind of data, and Google Brain does this for many things, including examples that I'm using. You put it in the database, and you manipulate it for a while, and you get insights that humans can't get because of scale. And that's where the real sort of amazing things are.
When we look at what could we do, our DeepMind, for example, just announced a partnership with the National Health Service. There's a disease in Britain called acute kidney injury, which is one of the highest rates of death in hospitals. And it's where your kidney stops working. And I don't understand the medical part of it, but I've been told that it can proceed very quickly, very badly, or not, right? And the outcome matters a great deal to you as the patient and obviously to the hospital. We have early evidence that we can predict quite accurately, based on blood tests and your history, the rate of decline, right? Does that matter? You betcha. And especially in a tough triage kind of situation where they're trying to figure out how to apply limited resources to save the most lives, it really saves lives, right?
Again, the application of these technologies to problems that have bedeviled us for a very, very long time. I mentioned self-driving cars. I don't want to be cruel in the first part of the morning, but I'll say it as bluntly as I can. There are 32,800 people who are scheduled to die this year on American highways. We just don't know who, right? That is a horrific number. And by the way, that's considered the best number ever on a miles-driven basis. How could you accept that? Why is this not a national crisis, right? We're halfway through our quota. I mean, it's just horrible. And these are often young people in the prime of their lives. Everyone ends up in a funeral and so forth. I am frankly beside myself over the lack of consensus on how important this problem is. We have activities here.
I highlighted the testing that we're doing. We have a number of other companies that are working on this well. This should be a national priority to basically figure out a way to get this technology to save lives, right? I mean, I can joke about how the computer will drive much better than you are, especially if you're drunk. But the serious point is that we're talking about 30,000 people in America, plus or minus, and 1.3 or more million people worldwide this year who are going to die, in my view, unnecessarily. Let's say we could cut that by half, right? Imagine the impact of that compared to the other things that we've found. Where is the national priority? Where is the goal? Where is the funding, right? These are ideas that are ready. Remember I said earlier, it's ready, right? Our technology is ready.
The guys that the other folks are doing is ready. It's time for this to take off. We're doing it for that reason and not for any other. There's an opportunity in education. Again, there are startups working on this, a couple that I know well. What they're doing is they're basically saying, "What we're going to do is we're going to keep the teacher in the classroom, but we're going to use computer learning and machine learning to help the students get more individualized lesson plans." The teacher teaches differently, but the teacher is crucial. The students learn much better, and those are the early results. Does that matter? There are three million schools in America. We all understand how important it is to get a stronger education system for the many challenges that lie ahead in economic growth in our great country.
But perhaps the one that I think is the most profound is where we have spent most of our time. And I'll finish up with this as an example. Larry, a few years ago, said that what he really wants to go is from search to suggest. He wants to go from you typing a query in and getting an answer to us really helping you, right, on a day-to-day basis. And out of that came an initiative which is internally known as the Assistant. And again, we can talk about this with Sundar in just a sec. And the idea is that we want to build systems that assist you in everything you're doing. So that you just saw in a little funny video is all based on that.
We just introduced a product called Allo, and people have said, "Well, it's an instant messaging app." Yeah, but it's an instant messaging app that actually understands your idiom and learns your idiom well enough to help you reply and help you answer, right? It knows a lot. And again, completely under your control and completely under your own privacy and so forth. We just introduced, it's not shipping yet, a home device that's voice actuated, which uses the same technology. Now, how does this apply, right? Where would we use this? Well, we use this to everything, right? Doesn't this also apply for search? Doesn't this apply also for YouTube? Doesn't it apply for so forth? So the strategy is, although you're seeing it in these particular snippets, the funny story was that six months ago, they tried this on email, right? So they ran this thing.
The term is Smart Reply on email. And who would not want the computer to reply to all of their emails so they don't have to, right? All of us have this problem. So they ran it. They turned it on, and its most common reply was, "I love you." Not the correct email response, especially in a corporation. So let's just say that there were some bugs. But we got that one fixed. But the important point is that imagine a situation where the computer is helping you not just understand, but really get through the day. And everybody has these problems. And imagine if it's a mom, right, overloaded mom or an overloaded college person or an overloaded executive or an overloaded worker in a corporation.
Or imagine if it's a scientist who's about to make a major discovery, and the assistant is so good at looking at the chains of information that the assistant can make a suggestion. And that key suggestion is the basis for the intuition of a human. It's the first time a true partnership can really emerge between the kinds of things that computers are very good at and the kinds of things that we are very good at. I'm very much looking forward to that. I think it will be transformative for our company. I think you'll all benefit as shareholders from this in innumerable ways. So with that, I hope that was a short sense of what we were trying to get done at Alphabet. And I think we'll bring up our panelists, and I'm looking forward to your questions. David, do you want to come up?
Ruth, do you want to sort of come up? Is Sundar here yet? Okay, Sundar, come on up. David, I've already introduced. We need like two as usual, we're disorganized. Let's get a couple more chairs. Ruth, come on up. Ruth is an extraordinary leader in our industry. She had quite the career on the financial side. And I think you all know the impact that she has had on our investor relations and our financials. And upon arriving here, she took on the challenge of rationalizing and building real businesses in Alphabet, and she can speak for that. To say that Sundar is the best CEO, speaking as the former CEO, would be an understatement. And I've watched him. He's been here for a decade as an executive, but recently a CEO for about a year.
And to watch him navigate the challenges in space, I go, "Oh my God," right? We are so fortunate to have Sundar, literally as the CEO of our favorite part of Alphabet, Google, which is why you're all here. So with that, perhaps we have comments or questions. Can folks line up at mics? Any question is fine. Who would like to start first? Yes, ma'am. Go ahead.
I'm Linda from Fresno. First time coming to your meeting. Welcome. I noticed that a lot of other proposals dealt with your financial obligations. I thought we were going to get a cute little bag or cap or mug. I know to you it's not that big, but to me it is. Can you bring it back?
Who is in charge of this? David or Ruth? This is a real failure on the part of you all. [I agree.] Duly noted.
We will reconsider that and maybe change that next year. Thank you. It's a little thing, but. No, no, we get it. Thank you. It's a big thing to me. Excellent suggestion. Okay. Okay. Never again. Never again. Okay. Thank you. Thank you very much. Yes, ma'am.
Thank you. I'm Danielle Ginach with Sonen Capital. I wanted to bring up Google's work in renewable energy. Google has taken on, and Alphabet has taken on a remarkable leadership in addressing the need towards moving to a clean energy future, especially in emerging markets. We do commend that commitment and the capital that's been activated and the leadership surrounding that.
Sonen Capital, my firm, was one of over 30 investors that wrote to Google last fall asking for a better understanding of how the company assesses and responds to the impact large energy developments have on local human rights, indigenous peoples, and communities. As you'd imagine, renewable energy installations and equipment being erected in emerging markets have consequences that are sometimes unintended, and so what we didn't receive was any response from the company that helped us understand your approach, and so the remaining question is how you think about human and indigenous people rights as part of the clean energy program. The response we did receive pointed to IFC guidelines, which are just that, a simple guideline.
And we'd like to urge you and kind of reiterate that in the question to ask, what are the knowledge sets and partnerships and policies that you'll be pursuing in regard to protecting these rights around renewable energy development?
Ruth, where is the investment side?
So on the investment side, we are very committed to sustainability. It's very core to the way we're running our businesses. And the team that leads all that we're doing in data centers has a very strong lens on that in particular and are proud of the way we've looked at sustainability and our footprint. And to your point, we've invested in a number of important initiatives around the globe. We're proud of what we've done in a number of areas.
And so sustainability overall is an area you've seen us, I think, be a real leader and something that is core to our founders and the senior leadership team, and we've remained very committed to. In terms of the other points that you've raised, I'm not sure if you want to add something that's duly noted, and we will look into further.
Yeah, we'll look into that and maybe give you some more feedback on how we look at the impact on local communities and so forth. But certainly, it's something that's important to us. We have worked with our partners on the ground because most of these projects are done with folks in those communities. And so we do work with them locally. But we can find ways to give you more feedback on that.
`That'd be great. Thank you.
Sir, I believe you've been at every shareholder meeting, or I was told you have been. So you are especially welcome this month.
Thank you. The first one I went to, you and I, you sat down with us at lunch. Now we don't have lunch anymore.
Thank you for coming after breakfast.
My name is Shelton Ehrlich. I've been a shareholder for quite a while. I wanted to defend our corporation against some of the criticism by the proposers. I bought my shares knowing that this company was going to be run by an elite, the people who founded it and built it. It's an interesting experiment that a public corporation can be managed on the whim of three or four people with lots of input from others. Still, whatever you guys want, you do. We knew it when we bought it.
To criticize it now, given it's one of the largest corporations in the world and we've all made a lot of money, is ridiculous. I wanted to make a comment on lobbying. Lobbying is not just dollars. It's face-to-face meetings. I believe that Google is the number one corporate visitor to the White House. Is that true?
I think we have no way of knowing exactly what's true. I mean, that's been reported. We definitely have made visits to the White House.
You get there often. People. Instead of telling us how many dollars you spend, how about writing down the notes, publishing the notes you take of the meetings so we know what's going on? Of course, I have to always say this. Environmentalism is a religion here. Germany, Denmark, and England have decided to reduce their investments in windmills.
We should be doing that here because they're chopping birds up into little pieces. And I wish you'd rethink your policies on climate.
Well, thank you very much for your comments. And I think we're very much looking forward to your participation next year. Any comments on Shelton's comments? No? Okay. Yes, sir.
Yes. My first question is to the lady CFO. And based on your evaluation, having experience working in Wall Street, do you consider Alphabet stock as being undervalued or overvalued? And what do you base it on? And my second question is to Mr. Drummond. When you said reconsider, does it mean no or yes?
Okay. Ruth? I know how lawyers are. Our CFO, Ruth, please answer.
The one thing I've always advised when I was a banker my clients and as CFO leaders is don't focus on the stock price.
Focus on doing the right thing, and the stock price will follow. And I'm very confident that we're focused on the right things. What we're focused on doing is continuing to invest in the great business that we have and making sure that, to quote Larry, incrementalism leads to irrelevance. We are not just doing the incremental. We're also doing the big idea so that when we're here next year and in five years and in ten years, you're going to be really proud of all of the investments we're making, very much to Eric's opening comments. So excited about the future.
David?
I believe the question was about what we affectionately call swag. And the answer is yes, we'll bring it back.
Okay. We got a clear answer. Okay. Yes, sir.
I'm Roy Finkelstein. I'm a stockholder.
I'm also getting on in the years and realize I'm not going to be driving forever. I'm very interested in what you think the timeline for self-drive cars will be in terms of what will be available, when will it be available, how will it be implemented partially, fully, freeways, local traffic, parts of the country, whatever
and maybe a number of us can talk about that. We have announced a collaboration with Fiat Chrysler to begin that, and a lot of this depends on the regulations at the state and federal level. Who would like to add? The only thing I would add is, having seen the tech industry for a long time, nobody views this as Eric framed the importance of addressing this problem, so for me, it's much more than just us one company doing it.
It's very important we have set the wheels in motion a set of things. And I think now there are many, many people, and the entire ecosystem across the world is beginning to think about it, address it. And so I think it's going to tremendously accelerate the change we see. In a 10-year timeframe, I do think these things are going to look very, very different. And so we remain very optimistic. I might need to apologize for my sort of almost angry tone when we talked about the deaths. But let's review the dates, right? The first projects for self-driving were funded in the DARPA world in 1996, 1997. The Stanford Challenge, the original challenge that Stanford won, was won in 2004 and 2005. Now, by the way, that was 11 years ago. And you and I are still not driving in self-driving cars today. So it's time, right?
It's late in the sense that we've been developing these things as an industry for more than a decade, right? And many of the people who are working at Google, right, in the self-driving world, have been working on this in their own careers for 10 or 15 years. It works. It's time to make it legal, to literally be testing it, find the models that work, and offer it because of the many reasons that you cited.
Do you have any estimate of timeline in terms of best guess? And I realize it's a guess and there's a lot of things beyond your control. But I mean, do you see me in 10 years calling up the car, having it come over, pick me up, and drive me to where I tell it to go, or is that a 20-year or 30-year?
It's very hard to know.
The consensus, I think, within the company is it's some years, not decades, but it is very much dependent on regulation. And it also depends on where you are. It's obviously a great deal easier to do this in areas that are somewhat, for example, have ample parking, things like that.
Thank you.
Yes, sir.
Hi. Michael Passoff with Proxy Impact. I just wanted to follow up with the question I asked when discussing the proposal on gender pay gap. This issue has gotten a ton of press, particularly about the tech industry. A lot of companies have started to move on it and make commitments. They're doing it at different levels. As I said, Intel's looking at more elements than others. So we have leaders and laggards. And where's Alphabet? It's just not even up to the laggard stage.
With respect, I actually disagree with the framing of your question. We have our company meeting in this room, and what we do is we call up unsuspecting executives and tell them to answer the question. That unsuspecting executive has been the leader in this area and is, I think, the national leader in gender equity and pay gap. His name is Laszlo Bock. He is joining us on stage. Come on up, Laszlo.
Thanks. That's a testament to being unexpected, [and you're exactly not dressed for us.] I apologize for underdressing.
No, this is the normal outfit at Google.
We actually, in April, I authored an editorial in The Washington Post disclosing publicly that we have no pay gap at Google among genders, whether you look at salary or bonus or equity.
We went a step further and actually posted on our site that's called re:Work, talking about how any company can actually set up a structure that guarantees that there's no wage equity gap. What we see at Google is that absolutely in society, there's a material gap. And in fact, when we hire women at Google, on average, they get a 30% greater salary increase than men do because out in the real world, women are paid way less than men. So we address it. And there's a number of steps you can take, which we detail on the site, which we can chat about afterwards. But the idea is we care deeply about this. And it is not sufficient to actually solve the problems of inclusion and diversity if you still have structural differences in how you reward and compensate people. We don't have those differences at Google.
And we monitor every single pay cycle to make sure that they don't creep in. And we monitor at the promotion cycles as well because we want to make sure that you're paid based on the impact of your work and not because of how you look or how you identify or where you come from. I read that op-ed. I like that op-ed. But I have the same question then as I do now. Where's the data to back it up? If we have all this information, why not just put it out in the report? I'm going to turn that into, Laszlo, publish more. I just told him privately. Since I disagree with the premise of your question, I think it's a fair challenge to us to try to prove to you that we're not lying to you.
Since our job is management of the company and our job is to make sure that we have the absolute best talent and they're fully and completely rewarded, we spend a lot of time on this, and I'm happy to work to convince you that this is true, but I actually know this is true, so same message as I said privately. Let's publish more and get out.
Can we get a commitment? Give us a date that we can expect this by.
Not to worry. He sends out a commitment. That's the same problem we have. This is not a management meeting, but I can assure you we take this incredibly seriously.
When we have a commitment, hopefully, well, since you're not an employee, I will not make you that commitment.
But I can assure you, so we're very clear, we make this commitment to our employees and we take it very seriously. Yes, sir.
My name is Brad Bates, and I'm a former mayor of Turlock, California. We're in the valley just to the east where we actually milk the global warming cows and grow things. I've been a shareholder since the IPO. And so I'd like to thank you first for breakfast and second for putting two of our daughters through undergrad at UC. It turned out that Google was actually a slightly better investment than your standard college plan. So my question.
Can I say that we care a lot about education? So that is a great story. That is a great story.
My question, your folks over at Google Fiber have commented recently on getting closer to solving the very big last-mile connection problem.
And I think they're talking about doing that with a fixed wireless solution. Well, as an investor and hopefully as a future fiber customer, I think that's a pretty big deal. And I'm just wondering if you can share any more about how that project is coming.
To give you an idea of how serious this is, we had a lengthy meeting, Ruth and I and the usual suspects here and Larry and the leaders of that literally yesterday on this question. The simple answer is that there appears to be wireless solutions that are point-to-point that are inexpensive now because of the improvements in semiconductors that these point-to-point solutions are cheaper than digging up your garden and so forth. And they can carry the gigabit performance that was before that. And the reason that is true is miniaturization as well as beam targeting.
And I think that's where the wins will be. We don't have anything to announce there. There's a lot of initiatives in the industry around that. Do you want to say anything more about that?
Just that we're pleased we've announced 22 cities at this point, and we're continuing to execute against it. And every time we go into a city, we're working closely with cities. And I think that partnership is another part of it. So we have the approach to the city and the business model on the one hand and then the technology on the other. And so look forward to you being a happy user there as well.
I'm hoping I don't have to move to Portland. Thanks.
Good. We have the same goal.
Yes, ma'am.
Hi. So I have a comment before my question. I'm sorry to put another shareholder on the spot, but Ms.
Porat is actually the CFO, not the lady CFO. And I would like to take this opportunity to commend Google on its diversity in the board and in management. Certainly something we are very proud to see as shareholders. And I personally am very happy to see and hope other companies will follow suit. And my question is on the Chamber of Commerce point that I raised when reading Walden's comments. Just curious about what that conversation sounds like. It seems like there must be a debate about Google's membership and the benefits of remaining a member of the Chamber of Commerce. So just curious if you can give us some insight into that conversation.
Sure. I mean, the membership in the Chamber is something we've talked about and we've actually debated here. There are a number of positions that they've taken we don't agree with them on.
For instance, they're sort of lined up behind Hollywood and sort of their copyright maximalism, as we call it, that we think stifles innovation. And we've made our views known about that. We've made our views known about some of these climate issues, the climate issues as well. We've decided on balance that there are a lot of things that being a member does help Google a lot, right, in terms of a lot of things that are pro-innovation that the chamber pushes for. But it's not like a slam dunk obvious call. So it's something that we do evaluate from time to time. So we value the input from shareholders on this point. And this is something we'll continue to sort of evaluate whether on balance it makes sense.
And on your diversity comment, we've spent a fair amount of time convincing ourselves that we were always right on this question, that a diverse workforce, one which is inclusive of gender, sexual preference, race, so forth and so on, actually produces better shareholder returns. So even if you don't really care about that on a moral basis, which we do, it produces better results. So I can assure you we're committed to the point you made. And speaking as your male Executive Chairman, I celebrate the others who are male and female in our company. But it's funny that we work so closely together, it doesn't even occur to us. And that's the best kind of diversity. It's really a phenomenal way to run a company. And I feel very strongly about it. And I know these guys do as well. Yes, sir.
Hi, Eric.
My name is Robert Clothier. I'm sorry I didn't have this question when we had lunch together in Portugal years ago. But I'm an octogenarian, and I'm really concerned about the next 10 years. What I've heard about Calico is so encouraging. And I wonder if you could enlighten me a little more without violating the top secret.
I actually asked Calico, and they're so concerned about staying focused. They've really not tried to do much press about what they're doing. They did announce a partnership with Jackson Laboratory, a biomedical research foundation to study the genetics of health and longevity. But the way to understand Calico is they're very much basic science. They're trying to look at how cells change as we age. Everybody is subject to that. They believe that there are ways in which they can affect that in various complicated ways I don't fully understand.
But they're very much a research lab for aging of biology and cells, and so hopefully for you and I, the results will come out pretty quickly.
It's thrilling.
Yeah, it's very exciting, and by the way, the quality of the work is astounding, as best I can tell. Yes, sir.
Hi, my name is Daniel, and I haven't been here for several years. One of the reasons that I decided to show up in person because the last time I was here, along that wall there, there were several kiosks with employees showing products and answering questions and features, and I'm really disappointed that's not there because one of the things that I do is I help a lot of people with technology, especially who are retired and older.
There's a lot of people out there who could use your products or would use them more if they were easier to use, if the features were well-known, if actually errors and bugs could be reported easier. There's an element of facelessness when everything is done through email. You send it somewhere. You hope someone replies. Sometimes they do. Sometimes they don't. I really miss the in-person interaction where I can learn and I can actually pass that on to other people. I'd even be willing to help you do that to improve your products as an impartial outsider. That's a great idea. They're back. Yeah, thanks. I mean, we do have forums like that. For example, just recently, we had our developer conference in which we had 7,000 people. In settings like that, we do a lot of it.
But this is good feedback. It's a perfectly fine suggestion. Right. I mean, everything is moving to digital online. But there's a lot of things where reading The New York Times, holding your hand, it's really different. But I wouldn't say it's going to go away, but it's different. And there are a lot of people who have this, let's say, a dual mindset, analog-digital. We agree. And I would encourage you to use your Android phone to read your New York Times. The app is excellent. Yes, sir.
Good morning. I'm Chino, and I'm a teacher from Burlingame. And I just wanted to know how much do you guys prioritize education? And if you can, say a little bit more about your efforts in education. I know you mentioned the teacher in the classroom, but do you have any other efforts to support that?
I've always seen education as one of the closest things related to our core mission. Our mission is to bring knowledge to everyone in the world, and obviously, education is a foundational way to do it. All through the years, we've always strived hard to see how we can. We see us as building tools that enable educators, teachers, parents, children, and so we've always been pushing the boundary on what's possible. Today, if you go not just in the U.S., but schools all around the world, Google Apps, things like Gmail, Google Docs, and other products are what a lot of students use and teachers use to drive it, but a few years ago, we launched Chromebooks as a way to really change how education can be done with technology in classrooms, and it's had great adoption.
We are now beginning to think about how do we use our platforms like Android and YouTube? How do we make it easy for educators to create content, digital content, which are available on these platforms that will help educators as well? So there's a journey. We are organizing ourselves better internally, and you'll see us do a lot more. We even do education symposiums every year now with education ministers from around the world. So we're looking to work with governments and the community to see how we can do all this better. There's actually an article this week about how Chromebooks are now the number one PC category, which I was shocked and astounded by. It's a testament to you drove that project. I think you undersold how incredibly impactful Chromebooks would be, partly because they're incredibly powerful and relatively inexpensive. So they sort of combine both.
The other that you didn't remember is Google Classroom, which in fact, we have something like 60,000 schools are using this now. It's going very, very quickly. And that's a teacher tool. And in your role, I would take a look at Google Classroom. Yes, sir. I'm sorry. Is there a gentleman in the back? I know. Okay. Let's go with. I'm sorry. With at the mic first, and then go ahead. Thank you. I just wanted to compliment you and thank you for continuing to hold an actual shareholder meeting. I am so upset with companies like Meg Whitman and Hewlett-Packard that go to virtual reality baloney that they don't want to take the time to, in fact, meet face-to-face with the people that put their money into the company to have it succeed. And I want to compliment you and thank you for continuing to do that.
Please do not change. Thank you very much. Let's see. Yes, sir.
All right. My name is Dennis DeSalvo, and my questions are not well prepared. One topic. That's okay. My answers are not well prepared either. The first. I have two topics. One is about the self-driving car you all know. It's about AI in general. The self-driving car, I do remember that Carnegie Mellon already drove a car coast to coast 20 years ago. So as you said, the problem seems not to be the technical problems. It seems to be the regulations. Now, if you look at Airbnb and Uber, what kind of pushback they get in Europe about getting their stuff out, all the cities are so afraid losing tax money or what have you. It seems to be very, very difficult to get this going.
So what is your strategy to battle the bureaucrats to push back? What are you going to do about all the truckers? Transportation is 10% of GDP in the United States. When I'm thinking about a self-driving car, they will be all gone. You will lose about 8% of the employment in this area. Can you say anything about how you're going to do it? The other one is about AI. Can we go ahead and answer that question? Who would like to answer that? All right, then. In general, we think about technology a bit differently. In most cases, we do it to aid and improve the lives of people. And I think that's true in self-driving cars too. Eric talked about the impact on lives.
But if you look at the time people spend driving and the loss of productivity in an economy, those are really important attributes as well. In terms of generally the regulatory environment, when I look at our track record, we've been very, very successful in getting the products we need in the hands of users. And even in newer areas, we work closely with the regulatory bodies to drive change and be things like Google Fiber or self-driving cars. We always believe in engaging and driving change in a positive way. And I think we'll continue to do that. How about the employment in this business? I mean, if you do not own a car anymore, then 95% of cars are standing idle. So you can't available this stuff. I think in general, we would say that the kind of questions you're asking are very difficult future questions.
But right now, we want to get these cars in the hands of people who can not drive them but have them be driven. And that's our highest priority. There are many, many benefits of that. You had a second question? Yeah. If you look at IBM, it was beating the world chess champion in 1997 or so. And that was considered a big deal. But from the perspective of theoretical AI, academic AI, it had no impact. It was really irrelevant. Now you claim the same thing about Go. Again, I think from academic, pure, deep AI, it is irrelevant that you can do it. I strongly disagree with what you just said. And I'll explain. The algorithms that were invented to power AlphaGo are generally known as reinforcement learning. And reinforcement learning is a new way of machine learning working.
Traditional machine learning is a classifier where what you do is you sort of look at pictures and you say, "That's a cat. That's a dog," and what have you. Reinforcement learning is where things change and you change the weights as you learn. So it's an experiential process. And it's much more like humans. And I think most people in the industry would say that the achievement of AlphaGo was to prove that reinforcement learning could work at a scale that was previously thought not applicable. There are many, many research developments and so forth to come. But people today will say that reinforcement learning, and in particular, AlphaGo, was historic from a computer science perspective. Well, I have much more to say about it, but that was it. Okay. Thank you very much. Yes, sir. And sir, we'll have you have the last question in the back.
Yes, sir. Good morning. My name is Mel Werner. And I'm sure you're aware that Facebook and Microsoft are planning to lay a 4,000-mile cable between Virginia and Spain. I vaguely remember that Google at one time was involved in a project like this. And off the top of my head, I'm in the business of education. I don't know technology very well. But in today's world of technology, I'm just wondering how prudent it is for them to be doing something like this and what your opinion is of laying a cable.
We should not comment on the activities of our competitors and partners. I can tell you that at the right time, we funded, in collaboration with other companies, the construction of a very large network of cables, which we now use through the Pacific and in the Atlantic and around the world.
And when you use Google, you're using the benefit of that infrastructure that was done some years ago. Thank you. Yes, sir. And you'll have the last question. Hi. My name's Eric Sprague. I'm a shareholder from the Sacramento area. Wanted to get your thoughts on share-based compensation. I see it as a real expense that, in some ways, if it's too high, it can limit capital allocation because if you're always having to buy back shares to combat dilution. On the other hand, I think it's necessary to a certain degree to keep the best employees and to get new employees that are the best. So I was wondering what your thoughts are on it, where you see it going as the company matures in the next 10 years.
In comparison to net income, it's higher than at a company like Apple, but it's a lot lower than a lot of other companies in Silicon Valley. So I just wanted to get your thoughts.
You've done a great job laying out all of the issues and the considerations. What we start with is talent is what drives the creation, innovation, and returns that you've seen. And we want to make sure there's a really strong alignment of interests and that everyone here from day one has had a stake in the company that they're creating and building and loving. And so that's a very important part of it.
One of the things we've really moved to in the last year, to your point, is highlighting in all of the budgeting that we're doing that expense by pushing it down to the business leaders so they're looking at the overall expense of running the business as we're talking about resources and resource allocation, and so it is very much front of mind as we think about what are the opportunities, what's the impact on the income statement, but the most important thing is driving the alignment of interests. We do believe that's very valuable. Another part of your question was about cash and how we're using it and share repurchase and what we've done there.
And really, the opportunity we had and we spent time with our board is to look at what are the requirements to continue to invest and grow the business, what are all the capital expenditure opportunities that we have, how do we think about investments again to continue to invest in all we're doing in Google and across the other bets. And that enabled us to announce the $26 billion share repurchase program. So there was an offset by retiring shares, which we've been doing since the fourth quarter of last year. And so we're balancing all of the different objectives again with the lens to how do we continue to create shareholder value in the near, medium, and longer term.
Thank you.
Thank you.
Laszlo has an important announcement. Well, the question from the shareholder from Fresno affected me deeply.
And so I went ahead and asked a colleague to go and pick up about 100 hats from our store. They should get delivered here in 5 or 10 minutes. Someone will be just outside the door. So on your way out, let's just say that you can see why the usual suspects here. We've got Ruth, David, Sundar, Laszlo, me. It is a privilege to work in Alphabet and Google. It is a life calling for me. And I think for the rest of us, I can assure you we'll be here next year. And we really want you to be here too. Thank you very, very much. Thank you.