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Seth Weintraub's picture
Seth Weintraub

Apple versus Google

Google's Eric Schmidt doesn't see board conflict with Apple?

I talked earlier this week about why Google shouldn't be in violation of the Clayton Anti-trust legislation because Google shares board members with Apple. I still believe that they aren't in violation.

That doesn't mean sharing board members is necessarily a good idea.

And the idea that Schmidt is also the CEO of Google makes it that much more of a conflict of interest. When questioned today on the matter, Schmidt told reporters:

“From my perspective, I don’t think Google sees Apple as a primary competitor.”

Mr. Schmidt said that if there were areas of competition between the two, he would recuse himself from discussions. He added that it was well known that he typically recuses himself from Apple board discussions related to the iPhone.

Come on! Primary competition? Sure Apple doesn't sell ads, and Google doesn't make hardware, but look at everything else. Google and Apple do in fact compete in a number of areas. As I said before, there is a laundry list of categories in which they compete:

  • Smartphone software. iPhoneOS vs. Android
  • Webpage building software iWeb vs. Google Pages
  • Calendar software - iCal vs. GCal
  • Document writing software - iWork vs. Google apps (Docs, spreadsheets and presentations)
  • Feed reading software Mail.app vs. Google reader.
  • Email software Gmail vs. Mail.app
  • OS Software: MacOS vs. Android Linux
  • They both give away photo editing software - Picassa vs. iPhoto.
  • Web Browsers (both based on the same Open Source Webkit and sold for free) Safari and Chrome
  • Web Services with Apple's MobileMe and Google's Google Apps and Gmail.
  • Video services - Youtube vs. iTunes

Does information covering these products come up in board meetings? They'd have to. If CBS has a big deal with iTunes distribution, the board will see the financials. When Youtube negotiates a similar deal with CBS, Schmidt will have all the numbers he needs to make an (overly) informed decision. Not fair!

Schmidt likely knows a lot about Apple's netbook OS plans. Android is poised to enter the netbook category over the next few months. He'll know what Apple plans to do. Advantage!

If Apple is planning on expanding its online office suite, iWork.com, Schmidt likely knows how and can adjust Google Apps accordingly. Unfair!

I could go on and on.

Schmidt says he recuses himself from board meetings when the iPhone comes up. That has to be nearly impossible to do. The iPhone is Apple's biggest product right now and the company has to revolve around it. On the flip side, an Apple board member not knowing anything about iPhones wouldn't be making informed decisions.

While I believe it is currently legal for Google's CEO to be part of Apple's board, I don't think the strategic technology sharing advantages outweigh the possibility that important secrets could flow back and forth between the two companies. In fact, I don't see how they couldn't.

Just like Google pulled out of the Yahoo search deal last year under regulatory pressure, I think Schmidt will at some point soon pull himself off of Apple's board - perhaps under shareholder pressure.

Arthur Levinson, the other board member that both companies share, should pull out of one of the companies as well, though not necessarily Apple.

What People Are Saying

Might be worth noting that

Might be worth noting that google's entire campus runs apple computers. If they were competitors, google would not run apple hardware. That would be like Microsoft being a 100% apple campus, just doesn't work. So what are they competing for really... A browser... Some SaaS stuff... and a phone. Thats it, not too much considering the fact that those services really aren't that big of a cut of their business. The iphone maybe is a big part of apples business, but its not the bulk. And the G1 isn't anywhere near the bulk of google's business. I mean, as far as it goes, they are not competitors and as such, who cares if they share board members.

The comments so far are

The comments so far are really disappointing. The article is truth: Google and Apple do compete on those fronts. It doesn't matter when some products are free.. they're strategic. IE8 is strategic too.

Let us sit down and

Let us sit down and rationally examine some of your claimed areas of competition.

* Smartphone software. iPhone OS vs. Android

The iPhone OS is, or so Apple claims, Mac OS, so technically you have listed it twice. However, Apple doesn't sell the iPhone OS, they sell the iPhone. Google licenses Android, but sells no phones. Why is this distinction important? To Apple, the iPhone OS is nothing more of a selling point for the iPhone; they don't want people to view them as separate entities, or else someone might ask why the iPhone OS only runs on the iPhone. Either way, Apple sells a phone and Google licenses software for a phone, not direct competition.

* Webpage building software iWeb vs. Google Pages

As of September 2008, Google no longer offers new sign-ups for Google Page Creator, instead recommending the use of Google Sites, which is basically an open wiki. iWeb is included as part of iLife on every Mac sold, and is a website development environment. Both are free, and both do different things, no competition here folks, please move along.

* Calendar software - iCal vs. GCal

Apple doesn't sell iCal and Google doesn't sell GCal. iCal comes with every Mac, and GCal is available to everyone with an Internet connection. Saying they compete is a bit like saying the my doctor competes with my bank, because they both give out free suckers.

* Document writing software - iWork vs. Google Docs

OK, so again we have a free Google product that is, by its very nature, platform agnostic this time competing against Apple's for sale office suite. Again, Google isn't selling Google Docs, it is marketing the page views to advertisers. This calculus gets a bit tricky when Apple actual is making money selling iWorks. I guess I will give you this one, as loss of users to Google Docs constitutes loss of revenue for Apple.

* Feed reading software Mail.app vs. Google reader.

Both of these are free, one as a bundle the other as a free download. I suppose Google could benefit here from some of Apple's ideas, since they derive revenue from the ads served by the Google News Reader. I will cede the point for now, and return to it at the end.

* Email software Gmail vs. Mail.app

Shenanigans, Gmail is a webserver and a webclient. My Gmail account is all I need to send an email. Mail.app is a desktop client. I can set it up to work with my own email server, a webserver like Gmail, or a corporate webserver. If all I have is Mail.app, I can stare at an unconfigured inbox.

* OS Software: MacOS vs. Android Linux

You listed this incorrectly earlier, but I have already spoken to that. This comparison is, I think, much fairer than the iPhone/Android comparison, as both are computer operating systems, that will conceivably run on similar hardware, in a competing market, in the future. Except that is all speculation. Apple has announced no netbook and Google has announced no plans to license Android for anything but phones. Further, Android is a hobbled OS for full computing. It is one thing to limit yourself to Java only on a phone that must connect to a wireless network and run in accordance with a companies policies, it is another entirely to cripple a netbook by limiting what languages can be used for user space apps. Mac OS is a great OS, but netbooks don't seem to be what Apple is about. Apple is high end. Android is a great step in the right direction for cell phone OS's, but would make a horrible OS on a full computer. pitting these against each other is nothing more than speculation, to say nothing of technical feasibility.

* They both give away photo editing software - Picassa vs. iPhoto.

Exactly, they both give it away. How is Eric Schmitt going to learn anything Google could incorporate into their product that he wouldn't when iPhoto was released? If you can't answer that question, then how will he benefit from learning it earlier and incorporating it into his own free product? Neither company stands to lose, ergo no competition.

* Web Browsers (both based on the same Open Source Webkit and sold for free) Safari and Chrome

See above and below: free, free, free.

* Web Services with Apple's MobileMe and Google's Google Apps and Gmail.

Again, Google isn't selling these things, but Apple is. Apple stands to lose some ideas, but they seem fine with it, so let it stand. Google is advertising to the people who use their services. Their "products" aren't products, but stunts, attention grabbers, girls in bikinis standing next to the products. Or rather, they are bait, used to lure in the product which is you, the user.

* Video services - Youtube vs. iTunes

Again, you are comparing a product, iTunes downloads, to an attention getter designed to draw sight traffic, which is Google's product. To expand on an earlier analogy, one I like more and more as I think about it, Apple is a pimp, Google is a strip club. They both entice you with similar offerings: sexy ladies. Apple wants to sell you these sexy naked ladies, that is their product. They are a hardware company. Google is showing you some sexy naked ladies to get into the bar in the hopes that once there you will order a few drinks. Now, it doesn't matter if you end up getting off in both settings, the offerings are similar. It's just that, at the end of the day, you paid Apple for sex, and you enabled Google to sell some booze at a high markup. Whatever else you did in the VIP room with your software is none of their concern.

So, at the end of the day, we have:

* Mail.app vs Google News Reader
* iWorks vs Google Docs

So, there are two areas of competition, beyond just mobile phone strategies. Schmitt should recuse himself from discussions of these, but otherwise his involvement on the Apple board of directors should be fine.

I tried to look up more info

I tried to look up more info on this but found nothing when I searched using Google on my iPhone.