Former journalist Moritz describes the travails of the Internet and old-media businesses, the myth of the first-mover advantage, and describes the real reason why he left the Google board of directions (the real reason isn't as interesting as the rumors).

Note: I didn't get the name of the person interviewing Moritz, so I'll just prepend "Q:" to them. I have an annoying feeling that the questioner is upper management at my company, and I'll be getting a Stern E-mail letter.

Q: The New York Times wrote an article that said that Web 2.0 is in a bubble -- stocks are overvalued, etc. If you were still a journalist today, what story would you have written?

Moritz: He might have written that people aren't reading newspapers much anymore. 20% of consumers skip TV ads. Or an article could look at growth in China: Are U.S. companies still relevant?

"I don't think the period we're in now is anywhere near as grotesque and zany as the period when you and I last met, in 1999-2000."

Q: Internet advertising is down. We could be seeing a significant cyclical downturn in Internet advertising. "How far along are we in terms of getting it right in how Internet advertising works online?"

M: There's a seasonal element. Advertising is always down in April.

Big as Internet advertising is, it's still a small fraction of overall advertising.

"As to the question, is everything right in Internet advertising, the answer is very clearly no." Nobody in the business thinks that. Some of the more driven heads of these companies, who are perfectionists, will look at the serious drawbacks of the products they have today, even though the products they have today are better than the products they had."

But the current products are better, and delivering better value to advertisers and consumers, than the products they replaced.

Imagine it's 1986, it's 12 to 13 years after the first company came out with the first PCs. You had IBM, DEC, Atari, Vector Graphics, Compaq -- conventional wisdom was that it was a cluttered market, too late for a startup. In comes this student in Texas nobody ever heard of who is not a household name.

He's talking about Michael Dell, Dell Computer.

Two years ago, the travel market was considered mature, with Expedia, Travelocity, etc. Then comes a new company called Kayak. Google was a late entry, five or six years after other search engines. So some of the better investments have been late to market. (Kayak is a Sequoia company.)

He stepped down as board member of Google recently. He is not on the board of any public company.

Q: No truth to the notion that Sequoia has a stealth search engine company that will be a Google killer, and crush the company you helped found?

M: The truth is far ahead of reality.

Lesson of Google: Larry and Sergey were insistent when hiring early people in taking their time and saying no until they found the people they were satisfied with. "Almost every leader of every company will fall prey to the temptation to lower their hiring standards in order to fill the spot," under deadline pressure.

One of the best things for a company is to be founded by people with the energy and vision of youth, who grow up with the company. The common wisdom is that startups get too big for their founder -- people cite the example of Digital Equipment and Ken Olsen -- but there are plenty of counter-examples: Microsoft, Intel, and Oracle, to name three, with Bill Gates, Steve Ballmer, and Larry Ellison.

"If you ever want to see the contributions that a founder can make, and the foolishness of a board of directors, look at the history of Apple over the last 20 years."

Q: Old entrepreneurs vs. young entrepreneurs. Fred Wilson says the real paydays come from the young. The payday companies are founded by kids. True? And please keep the answer short.

M: "You said I should keep the answer short, and I will: Mozart was dead by age 35."

Question from the audience: As an avid reader, what do you think of history and the economic cycle we're in.

M: He reads for pleasure, he reads fiction, and not a lot of heavy history, but it's not a bad thing to be aware of the lessons of the past, like different boom and bust cycles of Silicon Valley.

Question from audience: Enterprise technology has been growing 6% to 9% per year. Can that be accelerated?

M: Some areas are growing faster -- storage, virtualization, within the enterprise there are pockets that are growing at a wonderfully rapid rate.