small businesses can help us get things back on track if they have the right tools that is why today's hearing is still timely it will explore how the best how to best help and to berners continue the small business sector was at an all time high seven point seven percent more all over twenty five percent of downsize managers over the age of forty start their own companies during this time we approved in the house yesterday with overwhelming bipartisan support it is also clear in the development and construction of energy efficient homes as well as the marketing tracking and shipment of small business group of the national association of home builders since one thousand nine hundred one i've worked with home builders to improve the production of energy efficient new homes consul is consistently recognized as the builders energy advocate at the local state and national level dedicated to assisting homebuilders achieve the highest level of quality construction and energy performance of my business is closely linked to the health of the housing industry and its technological future in energy efficiency and sustainability thank you for the opportunity to testify today about the urgent need to restore the health of the housing industry and small businesses like mine as well as to discuss the importance of incentives for producing more energy efficient housing currently the housing market is in the midst of a historic downturn characterized by falling home prices climbing home sales constrained mortgage credit and a painful contraction in the residential construction sector and california my company's largest market new construction permits falling forty six percent from their two thousand and five levels and researchers predict they'll fall an additional twenty four percent in two thousand and eight small businesses like mine that depend on the health of the housing industry have reacted quickly keep solvent for example consuls revenue is down thirty percent in the last two years i've been forced to lay off thirty one employees thirty percent of my company's workforce i know many other small businesses in our industry has had to take similar steps and he has made several recommendations for stabilizing the housing industry in the immediate term such as creating a temporary homebuyer tax credit among others my written testimony provide specific details on how this and other proposals can help the housing market and the overall economy recover from the current downturn with respect to energy policy in the housing industry in the long term it is important to improve the promotion of residential energy efficiency section forty five l of the tax code for example contains a new energy efficient home credit which is a key market incentive that ship builders toward significant energy savings in new home construction the program which expires at the end of this year provides a two thousand dollars tax credit to a home builder to construct a qualified new energy efficient home certified to achieve a fifty percent reduction in energy use this credit is particularly beneficial to small home builders who often have the most flexibility to react to the marketplace preferences such as increased energy efficiency or green home building however home builders also report and i know this firsthand  increase construction costs required to meet the requirements of the tax credit dramatically exceed two thousand dollars the senate recently passed a two year extension of this credit along with its housing stimulus legislation but the house has not acted on it it is crucial that leaders in both houses of congress work together to not only renew the credit as soon as possible or make it permanent but also to increase the dollar amount furthermore many businesses in the construction sector experience losses and therefore unable to fully utilize discredit mechanisms need to be developed by which the credit can be transferred from a builder to investors or other stakeholders similar to the model in the low income housing tax credit i would like to quickly highlight the work done by an h p to promote green building the first national consensus standard on residential green building in the united states will soon be approved by the american national standards and as a member of the consensus committee that helped develop construction this in turn will create new market opportunities for small businesses like mine that provide residential energy efficiency services and h b appreciate the efforts by congress to address the housing crisis support small of the committee thank you very much for inviting me to talk about this very important topic and i am delighted to respond to your specific question know how amazon dot com drives the growth of small firms and about the effect that small companies have on the economy but i'm sure a woman i would like to offer you and your committee three essential observations this morning the online economy has evolved dramatically since its inception in the early one nine hundred ninety s bringing unforeseen benefits to small businesses second these benefits arise not only from the new markets that can be reached online but also from the myriad retailing services now available online to small business from amazon dot com and others in third the demographics if today's online economy be surprising particularly with respect to the share of the online economy held by small businesses with these observations in view we may safely conclude that the online marketplace is a very important avenue through which small businesses may help stimulate the overall economy  chairwoman the internet is a great enabler of small business in its early days the online economy was a haven for innovative technically savvy small businesses and today it has evolved to become a crucial sales channel for all kinds of small businesses not just those with technical expertise several different e commerce business models now coexist and vigorously compete on the web one model is platform retail whereby large companies such as amazon dot com e bay and others provide e commerce services to other companies both large and small through amazon dot com platform over one point three million sellers most of them small businesses and individuals now have easy access to over seventy nine million active consumer accounts worldwide you've asked me for an indication of how my company drives the growth of small firms well simply put amazon dot com strives to provide our small business seller customers by a wide variety of retail tools so they can concentrate on the areas of their business they know and like best for example with product ads by amazon small businesses can easily and efficiently advertise on amazon dot com the specific products available on their own website for bit small businesses that don't have their own websites we offer several types of services like selling on amazon which allow small businesses to post their inventory on our website without any individual item listing fees through web store buy amazon service we even create and run complete e commerce websites for small businesses and whether or not a small business has a website we can provide a global reach provides g reach of our physical distribution network to our fulfillment by amazon service that's for small businesses with media products we make additional services available one simple way creators and small publishers can use our retail platform is to our amazon an advantage program in which they need to print or manufacture only a few books or disks small publishers then can offer these copies to the entire amazon customer base of more than seventy nine million active customers a digital delivery of course is another low investment way to get media products to consumers we have a rapidly growing digital music and video business that allow individual creators and small publishers to sell their audio and video work online without ever reducing them to physical form moreover as you may have heard we have also introduced the amazon kindle which is this little device here it's a portable reading device that wirelessly can download books blogs newspapers and magazines this way authors and small publishers easily can attract an audience to distribute their works without the upfront investments in printing and physical distribution that often act as significant barriers to entry on my own candle i have several books from individual authors and publishers who don't need to have any physical books in print the significant under counting of sales by small business is that the proportion of e commerce by small business is greatly underestimated the sales by sellers with annual revenues on the order of one hundred thousand dollars likely could account for as much of as a quarter of all consumer e commerce in the u s obviously a surprisingly high proportion of e commerce conducted by small businesses means that such a business is going to have a greater effect on the online economy they may be generally assumed conclusion madam chairwoman the internet is a great enabler of small business the online economy has evolved magically since its inception in the early one nine hundred ninety s bringing on forseen benefits to small businesses these benefits arise not only from the new markets that can be reached online but also from the myriad services now available to small businesses by amazon and providers lastly the demographics of today's online economy can be surprising particularly with respect to the large share of the online economy held by small businesses with these observations in view we may safely conclude that the online marketplace is a very important economy google is committed to helping small businesses prosper on the internet indeed much of google's success is predicated on the success of our small business customers and partners and we place tremendous value on this relationship with these entrepreneurs for many of them their success is fundamentally linked to the continuing growth of the internet today hundreds of thousands of businesses are using google advertising to reach customers and hundreds of thousands of web site owners are generating revenue by placing google ads on their pages a significant majority of these partners are small businesses and our tools are helping them compete and succeed in the global marketplace in my testimony this morning i'll first explain how online advertising enables small businesses to connect efficiently and cost effectively with new customers second advertising partnerships provide new sources of revenue for web site owners and last offer some comments on future trends in the internet economy and important implications for policymakers online advertising enable small businesses to afford it affordably and efficiently find their customers whether it's a local plumber reaching a new customer down the block or a nice shanty deal or connecting with a collector connecting with a collector overseas small businesses are using google's advertising program known as ad words as a sort of matchmaking service for new customers through simple online tool businesses create short text ads for their products that appear when a google user conduct a search for example a google search for the word flowers will show you both relevant search results as well as ads from local and national forests we found that our advertising system give small businesses a level playing field to compete efficiently with with much larger companies and a business can get started with just five dollars here's one example of america brooklyn new york based lighting fixture company got started in one thousand nine hundred eight with just two employees it's grown to over twenty five employees with six point five million dollars in total sales in two thousand and seven today the company attributes about sixty five percent of those sales or over four million dollars last year to google advertising chairman velasquez bold america is just one of thousands of businesses in your district and across the u s that are finding new sources of revenue through advertising program but google advertising isn't just helping small businesses find customers more efficiently it's also helping to find a whole new breed of online entrepreneurs in two thousand and three google create a program called ad sense which pays web site owners to place our ads on their pages every time someone clicks on one of those ads the advertiser pays google and we share a majority of that revenue with the website owner our business model enables entrepreneurs educators bloggers and others to generate revenue by sharing their expertise and opinions with the world in many cases these individuals are able to dedicate themselves full time to their websites because of the support they receive from our advertising programs in two thousand and seven for example google paid out four point five billion dollars to our partners thousands of whom are small businesses chairman vasquez in the twelfth district of new york alone and we paid out more than fifty one dollars fifty one million dollars to more than six thousand ad sense partners last year as the builder dot com is just one example of a small business success story based in cincinnati ohio tim carter delivers practical tips for handymen across the country into the in april of two thousand and four carter added advantage to his website and immediately experienced a jump in revenue of four hundred percent today tim carter receives a monthly check from google that averages about forty two thousand dollars and he is just one of two thousand businesses in the first district of ohio with whom we share a total of one point six we shared a total of one point six million dollars last year thousands of small businesses are using online advertising to create new economic opportunities and flexibility we have to go are very pleased to help support this proliferation of economic activity free speech and entrepreneurial spirit i'd like to conclude with a few thoughts about the future trends we see emerging in the internet marketplace and how they might impact  this committee's work first in fact majority of our advertising customers and partners hosting our ads are not fortune five hundred companies but small firms pretty nice products for specific audiences the web allows users with individual taste to find these nice products and services more efficiently and the economic potential of this content is driving some of the most innovative online businesses today we believe that the continued growth of small business is dependent on fostering activity among a million of in the millions of individual users and companies who make up the vibrant online community the committee continues its important work as a champion of small business i would encourage you to constantly consider how any new laws and regulations will affect these online entrepreneurs finally we must continue to preserve the internet as an open platform just a decade ago google's founders were graduate students at stanford university when they launched their small business a new approach to searching the internet a free and competitive online network an open standards enabled the success of google search engine preserving this openness online is critical to ensuring the success of a new last members of the committee thank you for this opportunity to talk with you this morning about the role of business in stimulating the economy again my name is dennis and i represent babson college as well as the global entrepreneurship monitor  now has expanded to include forty two countries in two thousand and forty four countries in two thousand and eight some of the information that i will share with you today is derived from this research as well as the research of my colleagues  businesses fourteen point one percent interestingly enough there are gender differences in this with about sixty two percent of the early stage entrepreneurs in the us being men and thirty seven and a half being women early stage entrepreneurs in the us are very confident people they believe their business has high potential with twenty two percent of them expecting to create more than ten jobs and fifty percent growth in the next five years compared to only seven point one percent growth projected by current business to us signifies opportunity and a positive outlook over forty nine percent of early stage companies plan to offer products that are new customers contrast saying with only thirty one percent from established business owners more than thirty seven percent of early stage companies will use the latest or newest one to five year technology in their business as compared to only ten percent of established businesses what this says to us is that entrepreneurs innovative they are innovative in their use of technology as well as their creation of new business models new services and new technologies they're also young most are thirty four years of age or younger forty one point six percent and about sixty two percent of these early stage entrepreneurs have some degree of a college education so a dynamic young educated workforce in the united states most of this activity is centered around the consumer oriented services sector about forty two percent followed by the business services sector closely followed by transforming and very little in extractive services in other countries of course we see very different combinations of these sectors experts in entrepreneurship overwhelming we believe that there is sufficient equity funding debt funding and private funding for the new and growing firms government support for entrepreneurship is believed to be stronger at the local level than at the national level with fifty five percent claiming support from local sources and only forty five percent claiming support at the national level the findings from this indicate that these entrepreneurs are consumer focused they do believe they have the capital to start their businesses and they still seek most of their support at the local rather than the national level terms of current issues the slump in the housing markets is causing distress not only in the home building industries but the overall financial markets as well and many small businesses and nascent entrepreneurs will be affected if this slump continues for a prolonged period of time the federal reserve has been responding with significant interest rate cuts which have provided some stimulus venture capital investment has continued to grow in this country with about a fourteen percent year to year increase in the annual amount invested in portfolio companies in two thousand and six and eleven percent increase in the first six months of two thousand and seven some of the new tax legislation proposed before congress could potentially change the treatment of venture capitalist profits from capital gains ordinary income thus affecting early stage companies that represent not only the highest investment risk but as the committee has has stated and some of my colleagues have also create the most jobs and opportunities for the american economy the findings from this is that there has been a negative ripple or trickle down effect from the overall economic crisis however as has been mentioned by chairwoman of alaska's and ranking member so by enacting a first time tax credit for home buyers what would that that would stimulate the purchase of new homes and that would help the home building industry but the home building industry just looking at the association is really about a third of their membership a lot of the members here like me so it also stimulate the retail industry the building supply industry the energy services industry which i'm a member of the financial industry so i think it would have a very large effect on companies small tax credit that's going to affect affordable market i think the proposals that have been in the senate in the ways and means committee been around seven thousand dollars so that really only addresses the i would say affordable housing market  first time home buyer so i think that would have the impact and right now the the housing economy needs any sales but the sales that are critically absent right now are the first time homebuyer the person who's trying to afford that home for the first time thing that i would say about small businesses overall and that this committee surely knows well is some of the biggest challenges small businesses face are in time and resources that it's often one person or just a handful of people trying to drive a business and so we see more and more people coming online but part of what's allowing that is tools of the sort that google offers that other companies offer to make it easier for companies to establish an online presence which is a critical step obviously and then as that happens we're seeing more and more businesses start to advertise their site and we see many many success stories through advertisers who come online and are able to take a small business and often grow it significantly we describe the difference between coming they describe themselves as having the dark ages before they came online and now they serve describe themselves as being in a renaissance because they said they've been able to target people much more specifically through advertising to find people who are searching for rentals on the outer banks whereas before they might just have to buy a newspaper advertising or do something or brochure mailings in a much broader way and so is that targeting that's really allowing small businesses to reach out to their niche audience very effective that google does is is take that first critical step of helping businesses come online who may not be online and as i said often time is a big constraint so google's local business center allows small businesses to come and actually register create a presence online and be found through google through google maps and when you search in your neighborhood for the local plumber or bakery or electrician so that they have a presence and they have a basic website and then we offer free and that is free and we  offer other free tools that allow you to build out a more dynamic web site as much as much as you want to build and then the advertising that enables you to both move into advertising online advertising which i mention there's only a five dollar sign on c n n you control your budget we give you a great deal of ability to target exactly the audience that you want to reach and to manage your budget as appropriate for your business and out of that we see many examples of people generating very high return on investments and then finally i would point to our ads program called ad sense where we allow you to place our ads on your website and i was some of the examples that i mentioned earlier and generate revenue that way as well and that again is not only free it actually generates revenue but all of these we aim to set up tools that that people can access free of charge as much as great question sheryl on the the advantage of a small business has they can focus today on what they do and like most what they do best unlike most they can focus on their businesses as opposed to trying to customers who might not normally find them this combined with the fact that the relative investment is insignificant if any at all to establish an online presence many business owners to start their businesses in but in the traditional than yours as well especially during difficult times especially in these times yes i think the f b i or grants are very important our experience at babson college my experience advising small companies we need to focus significantly on science and technology and engineering that is largely supported in part by government programs at the national level more so than at the local level i think  innovation needs to be continued to be supported in our country both from a policy perspective through tax credits as well as through educational efforts and finally encouraging women and minority ownership of entrepreneurial  venture venue's activities companies is essential as our country's demographics are shifting dramatically and there's more of a need to be inclusive of these different demographics in the new economy  builder i think here california from florida member of congress in florida but in vegas have been hit the hardest in terms of some of the areas with but look at some of the incentives you know you think the recession down four percent five ten percent business but home builders at least in our area many more down fifty sixty seventy percent it's simply a supply and demand issue or way overbuilt we just don't have the demand right now some of these incentives  you're talking on behalf of yourself and the home builders association what do you think are the top two or three that really can make a difference i mean when you have tax credits as you mentioned to give to the buyers but from the builders standpoint unless you have a way of selling off those credits or generate some cash many i'm having losses i'm not sure you know where we go with that but i want to talk to you a little bit about what more we can do to help without goofing things up up here but actually be a real help to small home builders and builders in general because it's a huge issue well to be limited just a few but let me give you top give me your top two or three you're absolutely right market is down sixty seventy percent from two years ago and we're predicting a market to go even lower in two thousand and eight just as an example if i may we do the front end of construction work and we do energy design and mechanical design etc two years ago we were doing around twenty one thousand permits through our office and it sounds like a large number but let me kind of give you a perspective on that and that means that we did about eight hundred master plans in that those are homes that are models that other homes will be built from and that was in two thousand and five this year we've done eight so new construction has stopped and builders really are not taking the risk because of the foreclosure market products coming down the road and the inventory that they have been in in our market and i expanding the carry back period for the net operating loss that would allow capital immediately into this year into the builders books and allow them to take credit for that the second is allowed and that how far you look in the carrier and i believe currently it's a two year carry back and i'm and it's been proposed for four years and that is what we're supporting the second which is more dear to my heart necessarily as i'm an energy efficiency advocate and try to push builders to go beyond just code and what's very difficult in our market now is the federal tax credit for energy efficient new housing it was passed for three years and extended for a year mentality of the home builder is if i want to do something and change for market differentiation so i can sell my product as opposed to a different product is i need a long term risk assessment so when i'm building a product that's a look at where that product going to be two three years down the road and if  for a year i'm not going to make that judgement call because i don't want to product i build in two thousand and eight to look different in the product a bill in two thousand and nine or ten so we really support an extension i know the house and the senate have passed different versions of two years i think personally that's far too short it should be a long term effort a five or ten year credit or make it permanent and make it above code so you're always driving energy efficiency so those would be my top t o i know in our area the whole concept of green housing and more efficiency is not just in our area but some we need to do as a country we're talking about tax incentives for buyers i assume that's what you're referring to what you're talking about there the tax credit i was talking about specifically is forty five l and a congestion of that and that actually goes to the home builder so the person who makes the decision in that what about the purchase or the purchaser we're also supporting the data extension i believe that also didn't propose for a two year extension because i think there's a lot of people that will buy homes if there are some tax credits is a way of stimulating the market move out of what they've got a thing cut their energy costs in half and that's a good thing for everybody absolutely that i believe is covered and one seventy nine on the commercial side and i'm i'm not a tax person so i'm not sure what the residential i think it's twenty five with a letter after it say i'd like to get your general feeling on the just real quick on the sub prime how did that affect your area they said twenty percent of homes that were sold the last couple three years were prime lending occasionally gets national publicity one of those was about six weeks ago as being the foreclosure capital of the nation so we have very direct experience and it's approximately forty percent of our market was sold in zero five and zero six and about two out of every five homes were sold in the subprime market with some time market type loans so that's coming back to really build inventory and inventor supply and demand so what we're finding is that that's going to depress our market through two thousand and eight probably through two thousand and nine we're not looking for any turn in our market thousand ten thank you  to amazon and now wants to buy a particular product say a frying pan they'll come and see a picture of the frying pan they'll be a description of the frying pan and perhaps we'll have for sale for a certain price but right next to our sale price is the price from other sellers competing directly with us and oftentimes it's lower and people buy as i say thirty percent of the units sold through us were not by sales by amazon dot com and so we're seeing sustained growth there the number of active customer accounts is now seventy nine million that's people that have bought something in the past year from us so that plus the overall demographics which i mentioned before which i think are so important that  it systematically small businesses are being undercounted in their online sales so it really is a good news story i think at present it's a great story let me ask you just practically i know a lot of companies have doing business in a way online i mean i think it's come a long way you look at the overall numbers but there's a lot more sites but my own experience if i was to think of one hundred sites there's probably five ten that really have a way  in some sense of figure it out really been a great tool but i think most of them are up there and they don't get that but how does a small business really take advantage of it and i think obviously you've got some great opportunities and obviously google does but i want to can be i'm sure there's five or ten that really do a good job but ninety percent are not doing what they'd like to do with their sites that's just my experience i don't have statistics on that but i think that you're probably in the right ballpark i think part of it is a legacy of the experience of the mid ninety's in the mid ninety's get online was to create your own web site and run it yourself that was the only option but now there are so many other options people starting to switch over so that a lot of the services that are technically difficult payment processing for example or advertising or search functionality or fulfillment all these things are difficult to manage but now service providers are stepping in and allowing small businesses again to concentrate on what they do  most we have worldwide fulfillment network involves gigantic distribution centers throughout our country and around the world why not allow small businesses to come in and allow their products to sit in our warehouses until they sell them and then we will take care of the shipping for them so they don't have to be experts in shipping or inventory management those sorts of things so i think despite the rather gloomy view of the web sites around the internet this is where states many states have come together to simplify their sales tax because the reason why amazon currently is not required to collect sales tax in many states is because of the court decision back in one thousand nine hundred two which said that the sales tax codes in our country are so inordinately complex that it would be an unconstitutional burden on the commerce or interstate commerce for us to be required to collect we have taken upon ourselves to participate with the states to simplify their sales tax codes in an effort to get to the point where no longer would be that burden and so my guidance would simply be that if states are interested in this to join in and participate in the streamlined sales tax project which is aimed at getting to the point of simplification where companies like ours can business and you guys have done a lot in this area how does that small company get more focused i mean obviously if you're selling a product across the country it's one thing but how does a merchant in sarasota florida tampa florida  impact his local market he's not maybe you're selling a car a house they're not selling books across the country how does that work where you get the local impact that the biggest bang for the buck working through google or the congress and one of the features of our advertising program is that we allow you to target not just the type of audience the particular searchers of their queries and what they might be searching but actually by location so for example you could choose sarasota you could choose the state of florida you could choose particular areas to target and some small businesses want to sell nationwide or even target the entire world and it's more appropriate for to target specific areas and we enable them to do that i would like to just go back to your earlier question position of the national organization or my position not the national organizations position i think in h p has a very clear policy on what's cost effective in there and how they determine energy efficiency codes my niche in the market is to drive builders to code make sure they do a good job and design well and then to push them beyond code we have a product twenty percent market share in our area which is california basically the southwest and we're probably as much as anybody one two three recommendations if you were sitting in the chairwoman don't try that and what would you say something in our power that we can do to help small businesses do your job better what would be your recommendation to mr steger said here's the three things he needs health care what would be your list of three if you could do that well i think health care certainly is a burning issue for small businesses a small business owner myself for many years it was a significant portion of my payroll tax expenses in addition to paying the federal and the state payroll taxes disability and unemployment taxes so health care is a burning issue investment tax credit for small businesses is a very important issue as an owner of a technology company we did benefit from section one seventy nine benefits as well i think today they are even more important what we see at babson college in many of the colleges in massachusetts in the country is a significant interest in green technology and energy renewable technology and  many of these will require significant time to get to market penetration and get to a pricing level that they become affordable on a mass scale between the beginnings of that idea and the reaping of those products i think on both the national as well as the state level investment tax credits can be significant and probably the last one is to take into consideration the sources of capital many entrepreneurs today are not getting traditional venture capital funding they're getting more angel investing small business loans and banking loans and the restriction of credit in today's environment that financing is going to become more stringent more difficult i myself participate in an angel investors group and becoming more of a conservative group so i think to increase the  that the government paying me would withhold three cents on that dollar so you know and then you get a big file your income tax your later when i found my taxes if that turns out to be then you withholdings for your taxes and your payroll i think my peril is within a few days after i pay my rent and if that's the case then the federal government really doesn't have a concern about whether you're paying your bills or not because you're paying them upfront weekly or monthly and to withhold an additional part that's i just want to reiterate that point i'm glad that you brought it up it that's something that i think intimidates the potential of people that might want to become the entrepreneurs which i direct the next question then a doctor's true that  and testimony or you stated entrepreneurship is a complex phenomenon and you've identified a lot of it as much as i've ever seen but that complexity i don't see referenced in your testimony that corporate structure other than their own aspirations this is perhaps my favorite question of what most of my classes begin with and the question of nature versus nurture with entrepreneurship and what we found over the years by anecdotal experience and by studies across countries is that there are certain individuals who have talents that lend themselves more readily to entrepreneurship that simply means they are self chosen there are individuals who  have expressed interest and desire and entrepreneurial activity and we firmly believe and have proven that it can be taught these are skills and tools that can be taught babson college and i'm fortunate enough to be a part of this is actually working in conjunction with charitable foundation to develop a teaching curriculum for latin america for grade school teachers to teach their children the foundations of business and entrepreneurship so not only do we believe this but we're putting it into practice and those skills center around a basic understanding of business a basic understanding of where opportunities come from and how to recognize an opportunity and then from there the tools that help individuals to shape that opportunity into a moldable business revenue model that enables success if i may just finally answer your question with we're very fortunate in this country because we have a national culture that encourages experimentation and does not penalize failure much as no one wants to fail we find that many entrepreneurs often will start a business or two before they start a successful business in many parts of the world this is culturally and nationally not acceptable in this country we're very fortunate to allow individuals to make mistakes and learn from those mistakes and then proceed quite taken by this and mature years they never would have taken the leap but by the same token these tend to be serial entrepreneurs who have taken multiple and my own experience i work with a group of c e o s six to twenty million dollar companies they're all serial  r as their companies have been purchased by larger firms their tenure is six months or less before they leave the established companies and go back to yet another on to print or elective a they have the gray hair that i have so they're still not afraid to take that i've got my website and it's an interesting one but the truth is it's all about searching placement in order to get the eyes there's two different ways of doing that i've got my website it's pretty interesting hopefully you'll capture it when someone is searching for custom board somewhere in hawaii but better yet maybe i should also get an i think that enhances increases the chances of certain people seeing my in that's what i'm going to read from the search which i'm sure you've read and if it's all now but i think he was so far the teller but tell me i'm never the prince the pronunciation neil moncrief couldn't afford to have a bad quarter in fact even a bad month make things a bit tense at home  running your own business is like that when things go south at the office you take it home with you as a small businessman moncrief lives on the edge of profit in the last month means avoiding his local banker putting off home and car payments and having less meat on his family table but cashflow google in particular thanks to the traffic that google drove to mike rieves online store front which i think was too big or something my great no longer worked for the man my creep is one of the tens of thousands of merchants who have taken to the and insurance agencies but in merchants and stroller stores these digital cousins of america are the very beating heart of the united states economy small business writ large across cyberspace you think taken together drove more than twenty five billion across the net that's a mere according to the united states government figures that's the power of the internet with a very very long head e bay amazon yahoo may get all the attention but the real story is in the lives but while the web may offer access to hundreds of millions of customers you still have to let them know you exist which is getting to my point when folks went looking for something they usually started at a search engine and through some combination of luck good karma and would seem like fair play when folks point or similar keywords into google site came up first it never purchased an advertisement although search engine referrals were organic quote we are the right answer for the search so why now all that came to a crashing halt because he was no when he went into the search people did he was no longer at the very top and the question was why and i do want to get to that particular point google will have to determine what should come first when someone is looking for instance hip hop who gets to be first in such a system who gets the traffic the business the profits how do you determine all the possibilities who wins and who loses because we all know when we go into a search it's huge and hopefully you picked up  gonzales custom surf shop but truly i don't know if i'm going to be on page one or page one hundred i'm on page one hundred no one's ever going to get two so the question then goes have we evolved where it's just not a web site anymore that's not going to be enough you are going to have to go online with advertising and then the question is how do you determine when down to serve shop comes up next to a particular search in my relegated to page one hundred two they have to get to page one hundred before gonzo comes up and my ad also pops up at the same time congressman at its core google of course is a search company and above all else we aspire and aim to have the best possible search results available and that's a constant work in progress since day one and google now being almost ten years old we've constantly evolving we're constantly improving working to improve our our search that we run our search engine and it's for us at the church and state issue you can't buy your way to the top of the organic search results but you can purchase ads if so you could have the best web site it might be really relevant and if you do then you can shop for free like the example you mentioned out of the book but you also have the opportunity to buy in happy to go longer but i recognize we're out of time so i'll stop there and we can follow up and provide more details if you're interested thank you  example particularly interested in promoting green energy efficient homes so this is a question directed to mr hudson i commend your industry for stepping forward and really pushing the whole process of supporting green building you mentioned a call to action for forty five l now that is just a credit for new homes new home building does it up to remodeled homes thank you forty five dollars for new homes there is also a retrofit section for energy efficiency improvements for rehab or remodel or renovation and is that an extensively used section popularity of that of that code another question i understand that there are national and standards on green building and there are a number of areas that these standards cover and i'm wondering whether you think that it would be a good idea for federal legislation maybe perhaps another code section that incorporates the assay standards so that although it's voluntary any builder who builds to a y standards with regard to green buildings should maybe get some other kind of credit tax credit the green standards that have been developed by the international code council a national association council is the combination of the three nasher sub sub national regional codes and when they adopt this process or adopt the answer seven hundred standard which should happen in their two thousand and ten adoption process it they would want to have within the green building code the beauty of having an answer standard is previous to this there really was no building definition of green and now there's a very good scale for the variety features that you've looked at for green building so that now we can have a measurable scale of what the green building is in the residential market and what it's not and that will become a integral part of our building code within three years thank you very much thank you madam chair and i'm sorry i was late and my questions may not have to do with the overall value attendant to this hearing but what i was curious about going to the read ahead is the value  small businesses give to the entrepreneurship that's made america great i guess my question is do any of you see it deeply in the resources that are necessary to do that businesses as you see the value of going on the internet and doing all this i went to four companies and montgomery county in my district two of them outsource over fifty percent of what they do not because they want to  the they don't want to give a telephone book through a suspects in order to make the kinds of programs they want where they would prefer to have americans do it they just can't find enough of them business to the one full ability to compete now no longer just with someone from arkansas but someone from overseas it seems to me that's the most critical element for small businesses because you all talk about this in a comes from somewhere where is it going to come from thirty forty years from now when do you really don't think this is an issue much at all homebuilding it is not high tech fortunately i guess we're a little on the low tech side but one of the critical issues as our market was growing previous to the last two years was the lack of qualified personnel and in the california market which i'm most familiar with we made a very extensive effort and i actually came from the community college system to set up something called the california homebuilding foundation and this a partnership between the building industry and twenty two community colleges to train framers plumbers electricians and they actually give scholarships to these kids to go to community colleges so i think the lack of qualified personnel was a huge issue as we  were going through our growth process of two thousand and one to two thousand and six from of i'm not concerned with a lack of innovation in the homebuilding market homebuilders respond to market forces and the public tells us what we need to bill by what they buy and as the market changes we for green building there are a variety of other issues and energy efficiency and peak load reduction have been on the west coast market we respond well to those things because we survive well just briefly congressman we have two areas of experience here one is within our company and the other is with our customers within our company it is a challenge to find qualified technologists unli is we'd love to see better technical education in our country to provide that steady stream of technical expertise but outside the company for our customers in particular for our small business sellers through our site we're doing our work to take that technical requirement away from them so they don't have to worry about being technically savvy so we're actually in a circumstance where we think we are able to provide services to our seller customers and then to the benefits of our our buyer customers that remove those kinds of technical necessity so you don't have to be an engineer from mit to understand how to run a good small business online many i would disagree with mr miser in the sense that we focus on innovation and we evaluate success by something that that creates incredibly easy to use tools and we usually measure that by  success of something like in search where we have hundreds of millions of searches done in a month and and it's easy to do and you can find what you're looking for and so on we think about innovations that some of the tools that i've talked about to make it easy for entrepreneurs to run their businesses effectively online and so what we focus on is getting the right talent and then and then providing those kinds of innovations and and i don't dare predict where well it's not a problem talent is always i would agree with mr manager talent is always an issue and it's we see it as the driving force of if you get strong talent and so we we have some concerns but in terms of innovation we think that we always we will work hard to get the best talent we can and and by creating an innovative environment to expect and giving people through some of the the things that doctors are a talked about in embracing failure not not liking it but willing to live with it knowing that the taking some risk is going to create the spirit of innovation and opportunities for success in that and that's always been our approach in today's been successful and  may not be time over time but if i may mr chairman yes thank you i'd like to address that from two perspectives the first is to take a look at it more from a historical trend or a change in models and i think that we're witnessing a shift in the business models and in the economy in our country that's happened at breakneck speed compared to the change from the industrial age to the manufacturing age to the knowledge economy that we've survived through the outsourcing and new models are being created my own perspective is from what i see working with young people constantly is i'm very bullish on our future i don't think there is a shortage of innovation i don't think there  is interest i think there is a broadening of the skills in the workforce and some of that is an infusion of talent from other countries as we once again become once a different type of melting pot and i agree with my colleagues that there has been and i have seen a push at the regional and community college level to educate young people for what was for additional a considered skilled or trade person jobs which also is going to be an ongoing doesn't report out immediately or as quickly as some other source so it is in essence under the radar activity that becomes more difficult to track the question would come up is are you tracking number of hits to a a level playing field as you suggested our primary focus is on trying to provide as i've discussed the tools that enable that as simply as possible we have a number of outreach programs that we do in terms of  different types of communities to provide the necessary education and we do that to certain communities we do that certain minority groups and so on as appropriate and our goal is to provide tools that work effectively for all groups and on your printer as effectively as mr fisher just like the internet has remove the barriers to consumers whereby a rural or isolated community may not have but one or two retail outlets they no longer beholden to those one or two retail outlets they have the entire internet of them likewise small businesses small business selling through amazon isn't the whole just a local community of buyers but rather to the seventy nine million and growing active customers of amazon and so it fail we've seen a number of different issues and they range from not having a good plan to not having a good operating plan and many times we teach entrepreneurship we have no shortage of brilliant ideas i tell students all the time there's no such thing as a not good idea but is it a good business concept is it a good business and from having that idea turning it into operations living with it managing through it is a skill set that needs to be taught there are many agencies like the small business administration that does provide tools and training for these individuals i participate through the small business educational association of new england in providing some of that so i think we have to provide them with resources we have to provide them with go to centers if you will and at some point in time we do have to provide them with sources of short term liquidity to help them manage through what might be a difficult essential to get the idea off and rolling and started but one of the things that most entrepreneurs need to learn is they may be the person to start the business but not the person to manage the business on an ongoing basis and one of our entrepreneurs who comes in to speak at babson college said it most eloquently that entrepreneurship is a team activity and finding the right team members to fill out your great idea is essential to keep the business going thank you dr and thank you madam chair i understand shop to be included in the search and i think that the best business models you guys could ever come up and you still have to make money at the end of the day and i understand advertising the concern then the advertising  then the placement and such in the exposure that a small business and that is really where i'm coming from on that because that's where you make money and i understand that mr miser the concern that i have of course with e commerce and such it's a blessing for many and you've indicated that you have many suppliers that are small business and so on that you don't have all of the inventory and some of that is provided by small businesses by the same token i know that in san antonio historically we've had a little book shop at the bookstore bookshop and we thought it was going to survive barnes and noble and borders they did now the question you know i mean they're barely hanging in there the question is is borders or barnes and noble going to survive online and we understand all of that we still have to be very mindful of what's going on out there and i understand you also have to stay in business to make a profit at the end of the day and there are some things that appear to be fair and some things that don't pay pal and how they restrict the consumer in the way in which they can purchase through their service all of that we have to be very mindful as to how they act the consequence the small business men and women in america but i commend all of you thank you so much for your testimony today before that will help your business your industry continue to create jobs one fix for my personal company is the extension of forty five well about our niches in the energy efficiency market i think the stimulus to the housing market is the extension of the of the work of the tax credit in general  downturn has slowed down and we need to see if we can play any role to get this economy back on track with that i thank you i asked anonymous consent that members will have five days to submit a statement supporting materials for the