Inside Google

If Apple and Google were hoping that a Schmidt-ectomy
would satisfy the FTC’s concerns over their board-level connections,
they were wrong. While the agency pronounced itself pleased Google CEO
Eric Schmidt had finally acknowledged that his continued service on
Apple’s board was untenable, it suggested it was waiting for another director’s shoe to drop.
“We have been investigating the Google/Apple interlocking directorates
issue for some time and commend them for recognizing that sharing
directors raises competitive issues, as Google and Apple increasingly
compete with each other,” said Bureau of Competition Director Richard Feinstein. “We will continue to investigate remaining interlocking directorates between the companies.”

Arthur Levinson’s ears must have been burning. The former Genentech
CEO serves on both boards, and unless the FTC is also bothered by Apple
director Al Gore’s role as a senior advisor to Google (and it may well
be), Levinson is the man in the hot seat (or seats). Advocacy group
Consumer Watchdog quickly called for him to pick a side. “It took Eric
Schmidt far to long too realize that the two roles are incompatible;
that’s not surprising considering the clubby atmosphere of Silicon
Valley,” said spokesman John M. Simpson.
“Nonetheless, we’re glad Schmidt finally did the right thing; we call
on Levinson to act responsibly and choose one company or the other.”

That would be a wise move; get all the diplomats resettled before
the real hostilities break out. Google and Apple may be just starting
to bump up against each other, but they are doing so in the key areas
of mobile communications and operating systems, and they are doing so
with deeply conflicting philosophies: Google promotes open systems,
Apple makes closed systems. “They are both very innovative companies
with very different ways of innovating,” says Henry Chesbrough,
director of the Center for Open Innovation at the University of
California at Berkeley. “They’ve both been very successful, but there’s
a contest of different approaches going on here.” As TechCrunch’s Erick Schonfeld puts it:
“Google wants to diminish the importance of any single computing device
in favor of Web apps which sit in the cloud and are accessible from all
devices — mobile phones, Macbooks, Dell laptops, or whatever. As much
as is physically possible, it wants to replace the operating system
with the Web. Ultimately, that is a bigger threat to Apple than
Microsoft ever was.”