THE FORMER CEO of Google, Eric Schmidt, has admitted that the search giant “screwed up” by not predicting the huge popularity of rival firm Facebook.

Schmidt said Google failed to compete in social networking three years ago when Facebook was still relatively new and had just 20million users. More than 500million people now use Facebook, which is increasingly threatening the search firm’s profits, CBS reports.

Speaking at the All Things Digital conference in California, Schmidt said: “Three years ago I wrote memos talking about this general problem. I clearly knew I had to do something and I failed to do it. The CEO should take responsibility. I screwed up.”

Schmidt – who resigned after a decade as CEO of Google two months ago – added that the company had wanted to form a partnership with Facebook but were rejected in favour of Microsoft’s rival search engine Bing, The Register reports. But he was dismissive of Microsoft in general, saying that the internet was dominated by a ‘Gang of Four’ – Google, Facebook, Amazon and Apple – and adding that Microsoft is no longer “driving the consumer revolution in the minds of consumers.”

According to the Daily Telegraph, Facebook is becoming more of a problem for Google because much of the information stored on user profiles cannot be accessed by search engines. This locks away valuable information on users’ personal preferences which is highly coveted by advertisers – who provide the vast majority of Google’s revenue.