good evening, depending on where you are in Google.

This is a familiar venue for me, and I hope for

all of you as well.

We occasionally get to visit with people who are probably

more consequential than anybody else in the world or

pretty close.

And in my career, I've had an opportunity to visit and know

one or two or three or four of such people--

Vint Cerf, for example, who invented the internet.

It may very well be that Salman Khan becomes the most

important educator in the entire world.

We will see.

[LAUGHTER]

ERIC SCHMIDT: But to imagine the potential that this

gentleman has, in terms of changing the world ahead of

us, literally gives me goosebumps, to think of the

impact that his invention and his approach can have for

billions of people.

It is an honor and a privilege to have you here at Google.

SALMAN KHAN: Well, it's great to be here.

And I like the low expectations that

you've set for me.

ERIC SCHMIDT: So I think this audience pretty much knows

Sal's story.

But for those who may not know, this is a gentleman who

should have done something else.

Brilliant mathematician, physics,

everything you could imagine.

On his way to the most lucrative possible job,

running hedge funds here in New York.

SALMAN KHAN: I think second most lucrative after--

well, anyway.

ERIC SCHMIDT: And somehow, right at that point, he made a

decision that changed his life, his family's life, and I

think, literally everyone else's.

You want to talk about how you got into the video YouTube

business big time?

SALMAN KHAN: Yeah so a lot of you all might know the

initial, genesis story.

I was working with my cousins remotely.

Initially, I was in Boston.

Then, the firm that I was working for, it was me, my

boss, who was our portfolio manager, and his dog.

The dog was the chief economist.

His wife became a professor at Stanford Law.

So then, we moved out to Silicon Valley.

And then, while I was tutoring all of my cousins remotely,

and I started working on the interactive part, which is the

questions and the quizzing and keeping track of students.

And I didn't think about the video it all, at that point.

This was Fall of 2006.

I was showing this to a friend in Silicon Valley.

You know, the software part I was showing him.

And he said, oh, this is great.

I said, but my problem is I'm having trouble keeping up with

all these cousins.

And he's the one that recommended, well, there's

this thing called YouTube.

And I was like, yeah.

I've kind of heard of it.

And why don't you make some tutorials and put it on that.

I was like, no, no.

YouTube is for cats playing piano.

It's not for math.

But I got over the idea that it wasn't my idea.

And I gave it a shot.

And I think a lot of stories that you all are familiar with

on YouTube--

I'm not quite at Justin Bieber scale yet--

but a lot of people started watching it.

I had set it up as a not-for-profit in 2008.

And in 2009, as you described, it was already

taking over my life.

At that point, there was no way I could do anything else.

ERIC SCHMIDT: So this is really all about YouTube.

SALMAN KHAN: It is.

ERIC SCHMIDT: OK.

SALMAN KHAN: Yeah, I don't think--

ERIC SCHMIDT: I think, frankly, you

should just thank YouTube.

SALMAN KHAN: I should.

I should just thank YouTube.

That's right.

ERIC SCHMIDT: So content--

if it had not existed, you would be like nothing.

SALMAN KHAN: I would just be one of those--

ERIC SCHMIDT: You would be making lots of

money in hedge funds.

SALMAN KHAN: Yes, exactly, exactly.

ERIC SCHMIDT: So what happened was, we had this wonderful

scenario where YouTube created a platform.

And then, you decided to start working on math.

How did this idea go from the first, with your cousin?

And how did it go to being all of high school, all of

everything?

SALMAN KHAN: Yeah, it's interesting question.

When I started this--

Fall of 2006, early 2007--

like everyone else, Wikipedia was already out there.

And you're like, anything substantive is

going to be the crowd.

Or it's definitely going to be multiple people.

When you just think about a K through 12 review.

Khan is actually more K through 14, or

even goes into college.

But it seems like this huge amount of content.

If you look at the textbooks, each of these courses are like

these 1,000 page textbooks.

And so I immediately started.

Well, I'm just going to do these as a proof of concept.

And I will then get my friends or people I know, to

kind of join in.

We can do this together.

Then, maybe collectively, 20 of us might be

able to tackle Algebra.

But once I started doing it, I made

about 80 videos initially.

I was like, it's not 100% comprehensive.

But if someone watches those and understands those, that's

a pretty good scaffold of algebra.

ERIC SCHMIDT: And it's important to-- those of you

who are not studying high school algebra at the moment.

But these are in fact very simple videos.

They're shot with just a little white board.

SALMAN KHAN: When I started doing it.

I said, well, these are for my cousins.

I don't feel like buying a video camera.

And I didn't feel like buying anything fancy.

So I literally used a USB headset and Microsoft paint.

I didn't even look to see if there was something.

ERIC SCHMIDT: We have better products.

SALMAN KHAN: I've learned that.

I've learned that.

I now use another free program.

ERIC SCHMIDT: Everything at Google is free.

Trust me.

SALMAN KHAN: Oh, yes.

That is pressure--

But anyway, I started making them.

And they were really just you saw my little scrawls.

And the first few ones, I actually cringe when I look at

the older ones.

But some people said, oh, I really like that.

It felt very homespun type of thing.

But yeah, they're kind of the shaky handwriting.

And you hear my voice-over.

But it became clear.

A lot of people think content goes stale fast.

And it's true.

If you're writing a blog, if you're doing a news site,

every day you've got to have--

and people say, content doesn't scale.

But with was stuff like algebra, those 80 videos, it

took me like a month to do them.

That's kind of algebra.

And then, I kept going.

And it eventually became like this Forrest Gump type--

can I race across America type of adventure.

And I said well, I'm going to do all of mathematics.

ERIC SCHMIDT: And so we're clear, he didn't stop when he

did all of mathematics.

Yes, what's next after mathematics?

SALMAN KHAN: Yeah, the physics was close to my heart.

ERIC SCHMIDT: OK, that was easy for you.

What was the next one?

SALMAN KHAN: Then, I was an analyst at a hedge fund.

And it was funny because everyone--

ERIC SCHMIDT: So how about--

you did this "Origins of the Financial Disaster" video?

SALMAN KHAN: Yes.

And people should look at--

ERIC SCHMIDT: Who was the target for that one?

SALMAN KHAN: It was for people I meet at cocktail parties.

Because people say, you're an analyst at a hedge fund.