Posted May 7, 2008 10:11 am by with 10 comments

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BusinessWeek would like you to believe that there’s growing tension between Apple and Google–especially Eric Schmidt’s role on Apple’s board.

Google is also increasingly becoming a would-be Apple competitor, making Schmidt’s membership on Apple’s board awkward, if not ultimately untenable. Concerns over a potential conflict of interest have surfaced in the tech blogosphere in the past, but the potential for rivalry takes on added urgency as Apple prepares to launch the next version of its iPhone while Google partners ready cell phones that run Google’s operating system.

Sorry, I’m just not buying the idea that these two huge companies didn’t already know–prior to Schmidt’s appointment–that they’d soon start competing in similar industries. We all knew Apple and Google had aspirations for the mobile market. And so did they.

And, in light of the complexities of having Schmidt as a board member–he already recuses himself from any iPhone discussions–there must be some furtive reason why Schmidt remains on Apple’s board.

The CEO of a (potentially) rival firm sits on your board and invites questions about his fiduciary responsibility, yet he’s still welcomed?

Mark my words, Apple and Google are up to something.

Eric Schmidt didn’t join Apple’s board just because it would "look good on his resume." He didn’t take on the additional SEC headaches, just because he happens to like the iPhone. Nope, there’s something more here than meets the eye. A joint product? A merger? We’ll have to wait and see what plays out.

  • Mark

    I would really love to see a Google-Apple merger, two of my favorite companies. Do you think I’m being overly hopeful at this point?

  • @Mark – well I wouldn’t bet the deed to your house on it, but the two companies certainly have a lot in common. I suspect however, that the two might be too big to merge with each other.

  • Mark

    Agreed. Even if they don’t merge, I hope they can avoid becoming major rivals.

  • Everyone’s going to be rival with google; MSN, Yahoo and now Apple… who’s next?

  • Surely these two have a long history. I can’t however think of any upcoming products by apple that Google can get involved with.

    seo dude’s last blog post..April contest winners

  • Hmmmm, co-operation in the mobile phone market between two heavyweights like these could lead to some really interesting scenarios. There is little point in fighting each other if they can share R & D, marketing, etc for a common product. Doubt if we’ll see a merger though.

  • a joint venture between them is more probable in my opinion than a merger

  • Realtosh

    Yes, I tend to agree with your assessment. There’s something there that we’re not seeing at the moment. The problem, which I’ve been writing about since the beginning of the year, goes beyond just the mere presence of Schmidt on Apple’s board. If you and dig through Apple’s annual reports and SEC filings, there are numerous individuals with ties to both Apple and Google in Apple’s governance structure, especially on its’ current and recent boards. I won’t bother to mention the details here, but the documents are public record, so anyone can go back and confirm my impressions.

    In reality, they are just a bunch of friends in the valley, who can do each other favors like sit on their colleagues boards. In practice, there are some very real conflicts of interest, especially in the mobile space that will become more pronounced as both Apple and Google take larger roles in mobile phone industry.

    It could simply be a Plan B, in case Steve Jobs’ health ever becomes an issue again. I guess, we’re all just counting the 5 years, post cancer surgery to feel a bit better about his whole ordeal. Steve’s family in particular is in my thoughts. The rest of us would miss Steve, but not in the same personal way that his family would grieve.

    Steve has built up the company back to place of prominence in the industry. Apple has been infused with a culture of hard work and great products. The great teams within Apple can continue to make great products, with out without Steve. No one doubts the strength of the teams and the depth of the bench. Apple has many talented and dedicated employees.

    A merger with Google would make for a great Plan B, in case it is necessary. Google-Apple would be the most formidable hook-up in the information technology industry. The best front-end interface and hardware company combined with the best back-end and services company. There would not be a sector in computing that the combined company could not compete.

    This would blow away any Microsoft-Yahoo hook-up. In Yahoo’s case, Microsoft would destroy many if not most Yahoo products and/or technologies. Microsoft would just try to transition as many customers and engineers as they could from Yahoo to MSN or Live or whatever marketing name they’ve adopted at the moment to push their Internet services.

    Apple and Google would have zero overlap, apart from the successful iPhone and the announced Android project, would address the same mobile phone space. And even these parts would fit together quite nicely and could be made to play nice together.

    A Google-Apple combined enterprise would have the resources, talent and clout to take on Microsoft and win on all fronts. This would be the first time in computing history that such a match-up against Microsoft would be possible; ever since the moment that IBM signed away the rights to the jewels of their own PC back in the early 80’s.

    I’m not saying that Apple an Google will eventually merge, although it’s a possibility. There must be a reason to accept such potential conflict of interest. It may come down to friendships and wanting the counsel of others in the valley who are at a level of accomplishment that their opinion can actually matter. Or it could be something more.

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  • So no one on Google’s side right now? Google is just too big. That’s why everyone be suspicious and want to compete with.