She is on Twitter, at least; not only does she follow the Google CEO on her @teflonblondie account, but the Burson Marsteller flack also tracks him on the much more selective @momnet, where he joins Demi Moore as one of just five followed accounts. We've been told the @momnet account is Simon's, and that seems obvious enough: It's owned by "marcy" and Simon retweets its content the very instant it goes online.

Her relationship with the nominally married Schmidt, whether professional or something more, does seem to be humming along again: Our tipster says the pair were spotted together in Los Angeles, at the opening of The Little Seed, the organic cosmetics company co-owned by Punky Brewster actress Soleil Moon Frye, who Simon and Schmidt both follow on Twitter.

As interesting as Simon's make-up shopping may be, we're more intrigued in the bridal jewelry retailer she's become a fan of on Facebook. A client? A friend's shop? Or is something more interesting brewing? We might feel uneasy asking such a personal question if this wasn't totally innocent, public information (per Facebook), and if virtuous people like Simon had any use for secrets (they don't, per Schmidt).

Schmidt once dismissed Twitter as a "poor man's email system." But as the microblogging service has picked up more users, more activity and more search traffic, Google has been forced to take it more seriously. Today, Schmidt's engineers announced that Twitter-style "real-time" searching of tweets would be integrated into Google's core search service. I guess that's what you'd call a Poor Man's Real Time Search Engine, mmmm? Whoops.

Even worse, Schmidt's attempt to join Twitter itself proved something of a disaster this morning. He first logged on with the handle "eschmidt0", prompting a cyber-diss from high-profile New York tech executive Anil Dash:

Oh, snap! Surely a big-time CEO wouldn't let a zinger like that get under his skin right?

Except that within a few hours Schmidt had duly changed his handle and moved over his old content:

It looks like Schmidt also received some help from the Poor Man's Email Service's Rich Man's Identity Authenticator, because he's now got a "Verified Account." Throwing his (semi-)celebrity weight around at Twitter Inc.? Schmidt's starting to get the swing of things. Now just tweet about your next lunch choice, Eric. We promise not to mock. Too hard.

The generous explanation for Schmidt's statement is that he's revolutionized his thinking since 2005, when he blacklisted CNET for publishing info about him gleaned from Google searches, including salary, neighborhood, hobbies and political donations. In that case, the married CEO must not mind all the coverage of his various reputed girlfriends; it's odd he doesn't clarify what's going on with the widely-rumored extramarital dalliances, though.

Schmidt's philosophy is clear with Bartiromo in the clip below: "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place." The philosophy that secrets are useful mainly to indecent people is awfully convenient for Schmidt as the CEO of a company whose value proposition revolves around info-hoarding. Convenient, that is, as long as people are smart enough not to apply the "secrets suck" philosophy to their Google passwords , credit card numbers and various other secrets they need to put money in Google's pockets.

It's enough to make one pine for the more innocent Google bursting forth in the c. 1999 group picture at the top of this post, also gleaned from CNBC's special. The hair might have been sillier — dig co-founder Sergey Brin and VP Marissa Mayers' cuts, top center — but no one was yet audacious enough to argue against the very idea of a secret.

Speaking to reporters today in New York, founder Sergey Brin and CEO Eric Schmidt (pictured) said people shouldn't come to the company to get rich, and shouldn't expect fancy food, Peter Kafka at All Things D reports.

Brin:

There was a period of time where the [Google] culture, as it were, was misinterpreted... When there were a few of us working in the garage... occasionally [cofounder] Larry [Page] would Rollerblade in with a few sandwiches for food. And that grew up into everybody's expectation: "Oh, they should have all the gourmet food they want, at any time." ...We decided to... significantly cut down all the snacks that had been available.

Schmidt:

Google pays very well. Google is clearly a growth company... We don't want them to come to Google for those reasons. We want them to come to Google to change the world...



....The tightening that [CFO] Patrick [Pichette] in particular did, who I think is the current Google hero, really did change the culture in a much more pragmatic way: "We're happy to work here. We're happy to be employed. We love what we're doing. Our friends, you know, have been laid off."

So, to summarize, a CEO who is a multibillionaire due to his Google stock says that you shouldn't come to the company to get rich, but to change the world. And the co-founder who has got Google investing in and renting space to his wife's company and hiring his mother in law as a consultant says Google shouldn't breed a culture of entitlement. OK.

But that puts to lie Google's old line, which was that it made crucial productivity gains by keeping programmers in the office longer with perks like free haircuts, a climbing wall, free internet-enabled buses, and, yes, free gourmet food. Here's what Brin and co-founder Larry Page wrote in an open letter to investors ahead of Google's 2004 IPO:

We provide many unusual benefits for our employees, including meals free of charge, doctors and washing machines. We are careful to consider the long term advantages to the company of these benefits. Expect us to add benefits rather than pare them down over time. We believe it is easy to be penny wise and pound foolish with respect to benefits that can save employees considerable time and improve their health and productivity.

Brin also defended the perks in a 2001 New York Times article, saying that, compared to routine corporate costs like marketing campaigns, ''these things cost nothing." Apparently "nothing" really adds up.

Speaking to reporters this very minute, CEO Eric Schmidt and co-founder Sergey Brin said the Mountain View, California company is through with its recent belt-tightening, which included layoffs and cutbacks in the company's famously posh perquisites. "We're increasing our hiring rate and investment rate in an anticipation of a recovery," Schmidt said, according to Peter Kafka of All Things D, who has been liveblogging Schmidt's meeting with the press.

Pressed further, Schmidt, net worth $5.5 billion, added:

From our perspective, the low point was somewhere in the spring. Which is why I said worst was behind us in May, June. Noticed recovery "Juneish". The conventional wisdom is that US recessions are 18-24 months. Bernanke sees a recovery too, which we agree with.

Added Brin ($15 billion), "And we're good indicator for consumer spending, and you can see for yourself by looking at Google Trends."

Meanwhile, national unemployment stands at 9.8 percent and Alan Greenspan, an actual economist and former Federal Reserve Board chair, predicts the economy will just get worse and then stagnate for a good long while. But he cited absolutely zero Google statistics for his prediction, nor does he get free food and laundry and transportation and snacks and internet access and literally actual trips to Disneyland provided for him free at work, so can you really trust it?

We were surprised to see a carefully-calibrated communicator like Simon drop Schmidt's name on her Twitter stream (see screenshot below); she's been tight-lipped about Schmidt in the past. And isn't she supposed to be pimping TV gigs by Burson's actual clients, like Microsoft?

We're guessing some sort of new relationship is afoot, if not between Schmidt and Simon, then between Google and Burson:

Simon, we hear, joined Schmidt on his jet for a flight last Thursday from California to Teterboro. Apparently she wasn't put off by his taking her last month, as we heard he did, to The Island Mermaid on Fire Island when the couple visited together there in August. That's the same place where Schmidt took actor Stanley Tucci three years ago; we'd urged him to find a new haunt.

But between this Simon-Schmidt sighting and the earlier ones in Aspen and California, it's sounding increasingly like Schmidt is a creature of habit. Which shouldn't affect Google shareholders — unless it causes Schmidt to inadvertently expose something of himself to the PR firm of his lethal enemy (we're talking about proprietary information here, pervs). Or unless it leads to a relationship that finally puts in play Schmidt's Google shares, via a divorce from the wife from whom he's reportedly separated.

If you know anything, including why Punky Brewster was also tweeting up Schmidt, we'd love to hear from you.

The AdWords contextual advertising system on Google's flagship search engine is responsible for the majority of the company's $20 billion plus in annual revenue. Its key selling point: it is relevant, user-friendly — and unobtrusive, keeping people from defecting to other search engines or blocking the ads. Now, reports Ad Age, Schmidt is offering "a select group of entertainment advertisers" — i.e. the Hollywood studios — the chance to buy video ads that would run alongside search results, territory once reserved for text ads. Miramax has tested the system, but otherwise Google has been shunned by the top Tinseltown dogs, selling to the likes of the Travel Channel and videogame maker Electronic Arts.

Google is hardly the only geek dissed by the glitterati: Yahoo tried hard to become a media convergence hub and failed; scores of music startups have gone down in flames or languished for want of workable licensing deals; even Apple has had big problems dealing with Hollywood. Heck, America Online bought a bunch of studios when it acquired Time Warner, and it still couldn't win over the moguls.

Our advice to Google: Hire some serious Hollywood talent, since Southern->Northern California transitions tend to work better than those in the other direction. John Lasseter, the creative leader at Pixar, was a Disney vet who moved to Northern California to work for George Lucas and then Steve Jobs, returning to Disney only when Jobs sold the company. Judging from Jobs' success launching the iTunes Music Store, it would appear Hollywood appeal is contagious. Maybe even for a guy as nerdy as Eric Schmidt.

(Pic: Schmidt, then-Yahoo CEO Terry Semel and Gov. Arnold Schwarzenegger, June 2007. Getty Images.)

There is no ambiguity about the facts now: In response to an FCC inquiry, Apple has released a statement absolving its carrier partner, stating, "Apple is acting alone and has not consulted with AT&T about whether or not to approve the Google Voice application." AT&T confirmed, "AT&T had no role in any decision by Apple to not accept the Google Voice application for inclusion in the Apple App Store."

For users, the death of Google Voice on the iPhone — via the removal of some iPhone apps and indefinitely delay of another — meant more expensive text messages and international calls, and more snafus in trying to get friends to use the Google Voice phone number. It kept them locked in close to Jobs and his software, a relationship the Apple CEO guards jealously, some say anticompetitively. Jobs, for example, tried to lock Palm out of Apple's iTunes music jukebox; apparently tried to lock employees out of lucrative offers from competitors like Palm and Google; and tried (successfully) to lock competing browsers and podcasting software off the iPhone.

And yet blame was consistently placed on AT&T over the past few weeks. A Wall Street Journal op-ed, written by a Silicon Valley hedge fund manager, explained excatly "Why AT&T Killed Google Voice" (because "AT&T is dragging down the rest of us... and stifling innovation"). TechCrunch, the Valley blog that broke the Google Voice news, immediately declared that "it's not hard to guess who's behind the restriction: our old friend AT&T."

Prominent Mac-news writer John Gruber was the most certain on his Daring Fireball website. "Trust me," he wrote, "it was AT&T's decision." Gruber cited "an informed source:"

A reliable little birdie has informed me that it was indeed AT&T that objected to Google Voice apps for the iPhone. It's that simple.

Of course, it wasn't. Gruber did not respond to our emails, but so certain did the well-connected indy blogger sound that we can't help but wonder if he wasn't snowed by Apple itself. The company would not necessarily have anticipated that a swift, aggressive and public FCC investigation into the Google Voice incident would have proven AT&T blameless. And it's not like the company's flacks haven't been down this road before; Jim Goldman's sometime source and former CNBC coworker is an Apple flack, and Goldman's Apple sources had him reporting for weeks last fall that Jobs' health was "fine," before Goldman was suddenly forced to acknowledge it was very much not fine. (Gruber pointedly trumpeted CNBC's party-line reporting at the time while pissing on ultimately-vindicated posts from our colleagues at Gizmodo; in the interest of disclosure, we should note that this trend continues to this day, and that we find Gruber as reliably entertaining when he's wrong as when he's right, albeit for entirely different reasons.)

No matter how Apple's defenders were rallied this time around — we suspect, as a rule, that it had more to do with anti-AT&T bias than some pro-Apple whisper campaign — one can only hope this incident will further erode the myth that Apple is fundamentally any less inclined toward spiteful self-defeating authoritarianism than any other corporation of its size, be it AT&T, Google or, only slightly larger these days, Microsoft. Apple is uniquely molded to the whims of a single man, it is true, and already apologists have begun to excuse the Google Voice decision as fallout from Jobs' well-intentioned obsession with control. But Jobs, like his competitors, must be judged on actions, rather than intentions. And this one is pretty disgraceful.

UPDATE, Aug. 26: Gruber responded to our email:

I saw your post, and I think it's great. Totally fair.

My source (a) was wrong, not lying; and (b) from the enlisted ranks at Apple, not an officer. I am strong believer that when anonymous sources go wrong, readers deserve to know as much as possible about why, so, based on a few emails today exchanged with this same source, I plan to write about it briefly on DF. [Summary: The Apple source had his own Apple source, who he misunderstood.]

* * *

As for Goldman, I do not believe that he was spun back in December. Here's the nut paragraph Goldman wrote in December:

"I can tell you that sources inside the company tell me that Jobs's decision was more about politics than his pancreas. Sources tell me that if Jobs for some reason was unable to perform any of his responsibilities as CEO because of health reasons, which would include the Macworld keynote, I should "rest assured that the board would let me know.""

Clearly, we now know, wrong. But wrong about what? It was wrong that there was nothing seriously wrong with Jobs medically. But I am not convinced at all that anyone at Apple or on the Apple board was aware of how dire his condition was at that time, other than judging by his gaunt appearance — which at that point had been obvious for 8 or 9 months.

My hunch is that it is far more likely that Goldman's sources were unaware of Jobs's medical condition in December than that they lied to him about it. Think of it this way: Apple didn't benefit at all from December's "Jobs is fine" coverage, other than in the very short run. Come January, when he was forced to take his medical leave, these reports from just a few weeks prior made Apple's PR situation far *worse* than if they had said nothing at all to Goldman.

I suspect Jobs himself was not aware of the life-threatening magnitude or specific cause — his liver — until January.

Our spies in 2006 told us Schmidt spent time on Fire Island, where Simon has a house, the year before; later in summer 2006 the New York Post reported a sighting of Schmidt leaving the restaurant Island Mermaid there with actor Stanley Tucci. By the end of 2007, the couple had broken up amid talk Schmidt was also seeing Kate Bohner, the business writer.

But now one tipster, a self-described friend of Bohner's, tells us that relationship is finished (commitment issues), while another says Schmidt visited Simon's place on Fire Island "a few times" last month. Meanwhile, the married CEO still hasn't divorced his wife. For all this cycling through old flames, one hopes Schmidt's vacations at least involve new restaurants.

Got anything to add? tips@valleywag.com

(Pic: Dave McClure)

By January 2008 the two companies were competing in cell-phone operating systems, wireless hardware and Web services, and half of Apple's board was Google insiders, a draw-dropping instance of Silicon Valley inbreeding that Apple nevertheless shrugged off. So what's changed? Google has since launched "Chrome OS," but it's doubtful Apple sees the unreleased Linux window manager as a real threat.

The real worry: Two federal agencies are now investigating ties between Apple and Google. Micrososft's high-powered flacks, experts in antitrust who have retained Schmidt's ex-girlfriend, may deny lobbying on the matter. But after effectively buying the future of Google neighbor Yahoo, the Redmond, Washington company must be thrilled to see its longtime detractors in Silicon Valley further splintered.

(Pic: Jobs and Schmidt at the iPhone introduction, Macworld, January 2007. AP.)

We hear Eric Schmidt and Simon have been spotted together in several different places recently, including at the Aspen Ideas Conference in Colorado (both attended, Simon even Twittered) as well as back in Schmidt's home state of California.

Of course, with Simon flacking for the PR firm Buson-Marsteller, there could well be professional reasons for the face time. And not just from Simon's point of view: having parted ways with the well-connected flack both personally and professionally, Schmidt would be wise to make her an ally again.

For both Schmidt and Simon, a purely vocational reunion may be the wisest way to get back together.

Eric Schmidt of Google and Carol Bartz of Yahoo both submitted to interviews with Fox Business Network this week. And they both came across as peeved about having to answer any questions about Microsoft's upstart search engine in the first place. But it's no wonder why they took to the airwaves right as Bing was making it's big publicity push: With fickle user bases that can switch to competing software with the flick of a mouse, mindshare is becoming almost as important to tech companies as it is to celebrities. Hence, Twitter on The View and Oprah Winfrey Show.

In this case, the executives need not worry, as they happen to be right: A five-day ratings blip for Microsoft's Bing is evidence that people sampled the new search engine, not that they're switching.

The Financial Times is reporting an interview in which Schmidt told the paper Google "considered buying a newspaper" and "using its charitable arm to support news businesses seeking non-profit status" before rejecting the ideas:

Google had looked at buying a newspaper but was "trying to avoid crossing the line" between technology and content, Mr Schmidt said. It was instead working with publishers to make their websites "work better" for online advertising.

(Annoying registration-required article at FT.)

Schmidt's just being polite: Newspapers aren't much of a growth industry these days. He seems to have more hopes for the movie business.

Google's YouTube, after all, has held talks with William Morris Agency about buying up rights to original celebrity videos to drum up traffic and advertising on the site. There's been no deal yet, but over several months Schmidt hasn't dismissed the arrangement the way he has for newspaper publishers.

That's probably because Schmidt, who last year bought a house in Southern California and has been cozying up to Hollywood players there, is eager to blur the line between technology and content where video is concerned. He's cut deals to acquire content from MGM and, as of last month, Sony and Lions Gate. Sure, he hasn't gone so far as to have Google itself make video, but the deals put to the lie the idea of a clear line between distributing content and creating it.

Obliterating old boundaries, be the technical (search, email) or social (privacy), is what Google's all about, after all. Provided it's interested in what's across the line.

The FTC, which polices antitrust violations along with the Department of Justice, is investigating Apple and Google for a potential violation of a 1914 law against overlapping boards which may hinder competition.

People in Silicon Valley have long wondered at the close ties between Apple and Google. When Google CEO Eric Schmidt joined Apple's board in 2006, Apple had yet to launch the iPhone and Google wasn't a player in the cell-phone market. But the depth of ties seemed curious, even without that conflict. Genentech CEO Art Levinson already served on both boards, and two Apple board members, Bill Campbell and Al Gore, served as Google advisors. That's a block of four directors — half the board, able to stalemate any Google-unfriendly strategic move.

It's an obvious thing to investigate. But why now, since it's been the case for years? Schmidt campaigned for Barack Obama, and was recently appointed as a science advisor to the president. Fat lot of good that's done him. This is the second antitrust case Google is facing, following one over a settlement with book publishers which critics say would limit competition in book search.

The Obama administration, despite its ties to Schmidt, has signaled that it will be more aggressive in antitrust enforcement (as Democratic administrations usually are). But what else do Google and Apple share, besides directors? A common enemy in Microsoft. And Microsoft has hired Burson-Marsteller, a PR and lobbying outfit which lists "position[ing] technology firms in antitrust cases" as one of its specialties. A Burson-Marsteller executive has denied lobbying against Google on Microsoft's behalf. So modest! At the same time, the firm, run by loathsome unterflack Mark Penn, went as far as to hire Eric Schmidt's ex-girlfriend to help out its tech practice. Revenge is a dish best served with a summons from the antitrust cops.

Dowd begins:

Eric Schmidt looks innocent enough, with his watercolor blue eyes and his tiny office full of toys and his Google campus stocked with volleyball courts and unlocked bikes and wheat-grass shots and cereal dispensers and Haribo Gummi Bears and heated toilet seats and herb gardens and parking lots with cords hanging to plug in electric cars.

Despicably winsome, isn't Google? But the most awful thing about Google's Schmidt is his unwillingness to write a check to the newspaper industry.

In a typical Dowdism, the New York Times columnist asserts unproven opinion as fact:

Google is in a battle royal over whether it has the right to profit so profligately from newspaper content at a time when journalism is in such jeopardy.

This profligate profit apparently comes from linking to headlines and driving traffic to newspaper websites. Dowd never explains the mechanism by which Google makes money; Google News only recently started carrying ads, and it's a tiny part of Google's overall business. But Schmidt doesn't bother to parry Dowd's lame logic. He merely lectures her about how newspapers should come up with new products — and then explains why they probably can't.

Dowd finally asks him if editorial judgment still matters. Schmidt replies:

We learned in working with newspapers that this balance between the newspaper writers and their editors is more subtle than we thought. It's not reproducible by computers very easily.

Dowd shudders:

I feel better for a minute, until I realize that the only reason he knew that I wasn't so easily replaceable is that Google had been looking into how to replace me.

Really, can one blame Schmidt for wanting to try?

Schmidt spoke today at the Newspaper Association of America's annual convention. (Can you believe they still have those?) During a Q&A after his speech, he was asked what newspapers did wrong. His response:

I think the sites are slow. They literally are not fast. They're actually slower than reading the paper, and that's something that can be worked on on a technical basis. I should also mention that at Google we're working hard to try to address the technological question that you're asking but we don't have easy answers here. This is something where better development tools, better hosting tools, and so forth from the industry as a whole will make a big difference.

Also, Schmidt applauds newspapers for adopting blogs ("That was great, you guys did a superb job") but thinks they haven't done anything since then. He asked the rhetorical question:

How do you avoid being just mediated with a set of stories that are aggregated with your brand on them, which is what's happened to some newspapers?

Exactly the question some newspapers are asking, which is why AP chairman Dean Singleton wishes people would stop Googling the news.

Luckily, Schmidt and Singleton aren't the only voices in this conversation. One of Eric Schmidt's Google underlings explored this question in depth in a related blog post today. Associate General Counsel Alexander Macgillivray's well-reasoned conclusion: He likes Phish.

"People are talking about some senior level offsites happening this weekend to discuss an upcoming round of major layoffs," our source tells us. Googlers have been expecting substantial job cuts for some time, beyond the hundreds of recruiters, marketers, and salespeople laid off earlier this year.

One reason for a sudden, panicked push to slash jobs: Google CEO Eric Schmidt spent most of last fall blithely ignoring the economic carnage. When Google started to feel an impact, it tried to limit cuts to its vast ranks of contractors. (Google has never confirmed the numbers, but some in the Valley believe it fired as many as 10,000 contract workers.)

The company still has 20,000-plus employees, and continues to hire, even though Wall Street analysts think the company could carry on without a hiccup at half that size. The question is when Google's engineers, a powerful clan which effectively rules the company, will start feeling management's knives.

Google doesn't have its own corporate jets — good thing, since that transportation perk is so déclassé these days. Instead, the company leases planes, including a set of jets jointly owned by Schmidt and Google cofounders Larry Page and Sergey Brin. Peter Kafka at MediaMemo notes that Google paid for $106,201 worth of travel to have Schmidt's "family and friends" accompany him on business trips.

Which made us think: What happened in Schmidt's life last year? Schmidt, who is married, has had a series of girlfriends on the side. (Good for him!) But he started getting serious with his most recent one, Kate Bohner, in late 2007. Bohner, who was briefly married to author Michael Lewis and is said to have inspired the character of sex-crazed Samantha on Sex and the City, lived in south Florida until she relocated to Los Angeles last fall. During the presidential campaign, she was spotted escorting Schmidt to at least one YouTube-sponsored debate.

I asked a Google spokesman if Bohner was one of Schmidt's passengers, but he declined to comment. So did Bohner fly free on the Google party plane? If so, good for Schmidt: Not every executive, in this perk-hostile times, gets to fly such friendly skies.

Schmidt got a big scare when the Bush administration moved to block a deal to have Google sell search advertising for Yahoo, a move the companies made to fend off Microsoft. In the last weeks of the campaign, he loudly endorsed Barack Obama and signed up as an economic advisor. Schmidt and other Google executives shelled out for pricey tickets to Obama's inauguration, and Google threw its own inaugural ball. The White House even hired a Googler, Katie Stanton, to run its Web outreach efforts.

But another hire has caused consternation in the Googleplex. Christine Varney, the lawyer Obama nominated to run antitrust enforcement, said last year that "Microsoft is so last century" and the new, more compelling problem in antitrust was Google's "monopoly in Internet online advertising."

So much for Schmidt's cozying up to the administration.

Varney is a bright, respected lawyer, and may well prove a formidable opponent for the brainiacs of the Googleplex. But it doesn't take a brilliant mind to notice Google's outsized profit margins, which fund lush perks for employees and wasteful spending on pet projects sponsored by its quirky founders, Larry Page and Sergey Brin. Analysts believe that just by taking a scalpel to that waste, Google will prove able to ride out the recession with ease.

But that ease is coming at someone else's expense: Namely, anyone who advertises on the Internet, where Google is an inescapable force, especially since its acquisition of banner-ad broker DoubleClick. The rates they pay are ultimately reflected in the prices they charge, which is where consumers feel the pain.

So it seems like a hubris-filled Schmidt is tempting the gods when he calls for other companies to be broken up into smaller, manageable pieces. When will his own turn come? The government was ready to sue over the Yahoo deal before a chastened Google hastily abandoned it. A Google antitrust suit seems like a matter not of if, but when. A notion Schmidt might entertain: spending less time opinionating on other people's businesses, and more with his lawyers.

Here's the rest of his BBC interview: