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Summary:

A few days ago when Google announced what is a precursor to Google Office, many saw it as a big move against the long term nemesis, Microsoft. We read things differently, and don’t really believe that it is going to have much of an impact. However, […]

A few days ago when Google announced what is a precursor to Google Office, many saw it as a big move against the long term nemesis, Microsoft. We read things differently, and don’t really believe that it is going to have much of an impact. However, today’s news of Google CEO Eric Schmidt joining the board of directors of Apple Computer portends potential headaches not just for Microsoft, but for anyone with digital media ambitions.

It is hard to argue with the timing of the appointment, despite corporate PR speak. Microsoft’s ZUNE effort is coming soon, and this could mean a long drawn out, and costly skirmish for King Jobs. Bill’s boys are going to spend their enormous hoard of cash to buy into the digital media – music, movies and whatever – space. No one can outspend Microsoft, but one can outsmart them. An Apple-Google informal alliance is one way of taking on Microsoft and its coterie. As Valleywag puts it, “this has to be a lousy day at Microsoft HQ.”

Even though Google is being overtly aggressive about online video market, it is trying to leverage its advertising network more than download sales. Is it too hard to imagine – watch the video on Google Video, and download it on iTunes store? Both parties win? iTunes being included as part of Google software pack, or part of Google Toolbar? Google driving music-related searchers to iTunes store?

Google must be paying handsomely for those searches emanating out of Safari browser (about 3% of the total market) and a soft alliance could help balance the books. In other words, Google gets paid for referring customers to the iTunes music/video store.

Niall Kennedy points out a friend of friends network at work here.

The group was already interconnected outside of the Apple boardroom. Al Gore is a Google advisor and Google invested in, Current TV, Gore’s television station. Bill Campbell was an early management advisor to Larry Page and Sergey Brin and helped hire Eric Schmidt. Arthur Levinson is on Google’s Board of Directors.

[personal rant] I hope this means Eric and the Google boys get Macs, and start thinking different about applications that so far run exclusively on Windows. [/personal rant]

  1. Of course, Bill Campbell (Intuit) has been on the board for quite some time and it really hasn’t helped improve the Mac version of Quicken much other than they still produce the version. So, all this could turn out to be nothing. I’m hoping not but only time will tell.

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  2. anyone for google music ?? :)_

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  3. A Google CEO in Steve Jobs’ Court…

    Eric Schmidt just joined Apple’s Board of Directors. This makes a lot of sense.
    Google has been trying to build out their OSX development teams for some time. Apple has been taking their time with their web service and infrastructure strategy.
    He…

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  4. Wait, Now It’s Google + Apple…

    Lots of speculation about what it means that Google CEO Eric Schmidt is joining Apple’s board. Marshall at TechCrunch muses that Google’s just-announced online office suite on Apple computers might pose a potent threat to Microsoft. (Mmm… maybe.) O…

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  5. It’d be nice, for example, to have an OS X Google Notifier with little corner pop-ups, like the Windows version.

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  6. Google into hardware business? or personal electronic??

    Very smart move for either one.

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  7. Mark my words, here comes the Google iPod phone. Possibly skype enabled and very myspace hapi hapi joy joy (music + social = lots of sales)

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  8. In regards to your Google notifier for mac. There’s been a recent update, that gives mac users some of the features that were only available on pc, including a google calendar notifier.

    http://mail.google.com/mail/help/notifier/notifier_mac.html

    cheers.

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  9. We can hope that this portrays a closer relationship between the two companies, an aggressive push against Microsoft, and lots of great Google-branded Mac OS X software, but I think its less obvious. Don’t forget that Larry Ellison didn’t exactly make Mac OS X the best Oracle machine on the planet in his time on the board.

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  10. I’m voting for an Apple spaceship ;-)

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  11. Apple OSX + Google Open Source?

    A Microsoft Office replacement is all we need before they go on and focus entirely on the social scene.

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  12. Sounds to me like Steve Jobs has his eyes on Google :)

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  13. I agree /pd.

    Look at Google’s job page for positions for Google Audio.

    http://www.google.com/support/jobs/bin/answer.py?answer=35392

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  14. Yipee! Apple’s sexy devices and great user interface married to Google’s powerful and scalable engine…we expect beautiful children:)

    Ultimately, it’s a brand war: two brands with a base of extremely loyal customers and a reputation for originality/innovation

    versus Microsoft, whose “only-using-you-because-the-office-says-so” users have been exposed to endless Windows crashes and “let’s-copy-them-I-want-to-own-that-market” stance.
    Arrogant employees and chair throwing CEOs don’t help either.

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  15. Eric Schmidt is a great choice for a board seat at Apple, but I wouldn’t jump to conclusions about where that might lead each company.

    Several months ago there was a big joint press conference between Google and Sun Microsystems. Eric Schmidt was formerly CTO of Sun so the speculation was that they would cooperate on several levels, perhaps releasing a special version of StarOffice to compete with Microsoft. The speculation was wrong and the press conference was basically a non-event.

    The best partnerships, and the best mergers, are customer driven, where customers demand and pay big bucks for products from two separate companies but want them to work together seamlessly. On the other hand, it rarely works when two companies decide to cooperate on something and then try to create customer demand for it.

    Both Google and Apple have great businesses, but I don’t see where Google sales people are dying to work with Apple sales people…or Sun sales people.

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  16. You guys in the Valley are full of hubris. Not only is Quicken no longer going to be supported on the Mac (despite Bill Campbell’s Board seat), but what did Larry Ellion’s Apple Board Seat (dating back to the late 1990s) ever accomplish? Oh, maybe we got Oracle 10G on Mac OS X Server (big whip in the era of open source databases such as PostgreSQL and MySQL).

    How has Apple gained from having Al Gore on the Board besides seeing Al’s PowerBook all over the place in his Global Warming documentary?

    Om Malik, you should be taking the inverse perspective and be viweing this as a defensive move by the old boys in the Valley to yet again try to fend off Microsoft. Even if Zune is not a home run, they know that MSFT was able to hit a home run with Xbox. Furthermore, I don’t frankly believe that Schmidt knows how to grow Google’s business beyond its core competency which is search engine and advertising sales (both of whcih are not infinite — at some point there is an end and then Wall St. will ask “what next?”).

    Google does not have the creative genius human interface Zen that Steve Jobs offers. Plain and simple. This to me looks like Google doing what they can to make sure they survive in a world that has seen Microsoft eat past Valley companies for lunch (including Netscape).

    Oh yes Mr. Malik you are forgetting one very important thing. The Valley has become weaker to defend itself against Redmond because of the demise of Sun / McNealy. Oh sure, they got some money out of Bill for Java but in the long haul it doesn’t matter (Microsoft will eat up Java with .NET and C# — even Microsoft is building Python and Ruby into their CLR development tools). Its clear from Ruby on Rails that Java will eventually erode over the coming decade(s).

    This is the fight of Google’s life so why not join Apple which has everything going for it?

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  17. Please folks, it’s quite obvious what will happen.
    Google and Apple will eventually merge, form Goople, and then take over the world.

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  18. eddie,

    you bring up interesting points, and so does, don dodge. I think this is not the kind of bluster you would expect from scott mcnealy of the old.

    these two companies can craft a commercial relationship in which both can make money. it is a damn good reason to collaborate. not the sound-and-fury of mcnealy-larry ellison.

    these two companies are at the top of their game in search and digital media respectively. by working together, they are ensuring that they are hanging on to the top spot, and they have to.

    talking about quicken, i still have it on my mac, so not quite sure if that is really relevant to this discussion.

    still, your points are very valid and worth noting. thank you for sharing them with us. I appreciate such intelligence from my readers, who always try and keep it real for me, and for rest of us.

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  19. Don,

    you are right in bringing up the Sun-Google hoopla. The situation as I explained in the previous comment, is different.

    Sun as a company does not have the clout in the industry, and doesn’t enjoy the leadership position. that deal ultimately was google getting a presence on browsers on sun machines. they got their tool bars in, and well, sun really did not have much to offer.

    i think this time around the two companies can make money for each other – that is pretty good motivation.

    Of course, you are right that customer driven deals are always good. from that perspective, safari users have been seamlessly using google. why not the other way around – google users finding music that works with a device that has a major share of the digital music market.

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  20. Eddie’s points about Xbox being a hit also resembles some of the other core areas that Microsoft has finally made some stride. For example- the smartphone and PDA industry. I believe that Microsoft’s Zune initiative may not be a big hit in the first chance, but these guys are known as guys with lots of patience and determination. So, there is a chance that Zune product line after some revisions will be competitive enough to match ipods and any other music devices in future.

    So, in that context, the Google/Apple partnership (if it comes out due to Eric Shmidt’s role in Apple’s board) may be helpful to maintain a competetive lead over Microsoft in near future.

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  21. In response to Om’s comment, “Bill’s boys are going to spend their enormous hoard of cash to buy into the digital media – music, movies and whatever – space. No one can outspend Microsoft, but one can outsmart them…”, I’d like to note that none of the aforementioned players have yet purchased the golden carrot…”NetFlix”.

    NetFlix doesn’t have the whorish reputation of Blockbuster (they weren’t in the game early enough to pimp out bogus late fees).

    IF Microsoft moves at a tangible asset such as Netflix, whether through partnership or saturatino, not only would they obtain library rights, but a much more covetted asset that they have long desired…A Positive Reputation.

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  22. Senselessphotomaniac Wednesday, August 30, 2006

    OK. I love google … I like they way their contribution to digital media… why not, let’s make everything googleized.

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  23. Health competition is all we need as consumers. When they compete we get the products at a lower prices.

    Indeed Google is a treat to microsoft and Bill knows it. These guys are cable of doing anything and for free in name of open source.

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  24. This is terrible news.
    http://www.google.com/press/images/ericschmidtlg.jpg
    http://www.babilim.co.uk/blog/jpg/ericschmidtat_stanford.jpg

    Schmidt’s no Mac user, that’s obvious at a glance. Where are his tattoos? His piercings? He’s probably never been in a threesome or done a speedball in his life. The guy’s practically a walking PC. What a dweeb!

    Mark my words: Schmidt’s appointment to the board marks the beginning of the end. He will destroy Apple from the inside out. Just wait and see.

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  25. Anvarzhon Zhurajev Wednesday, August 30, 2006

    If Google would plan to support Mac platfrom more actively, if would be more logical to let his Stevenss on Google board, not vice versa. If any changes come, this means that Google’s Web expertise gonna be used for Apple’s good. It means revamped .Mac.

    There were lot of discussion about .Mac recently here on GigaOm, so I am surprised noone came up with this idea in comments above :)

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  26. CEO de Google se une a la empresa Apple…

    Apple anunció que Eric Schmidt CEO de Google se unió a la empresa como director.Esta noticia…

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  27. Google isn’t buying Apple or merging with them, why are you posting Stock spam?

    Back in March there was buzz generated on blogs about Google buying Sun, Sun’s Stock rose 20% in a few weeks.

    http://dotnetjunkies.com/WebLog/paul/archive/2006/08/26/144767.aspx

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  28. Eric Schmidt Joins Apple’s Board…

    Nothing but bold moves in Silicon Valley. According to Steve Job’s, Apple’s cofounder “Eric is obviously doing a terrific job as CEO of Google, and we look forward to his contributions as a member of Apple’s board of directors,” said…

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  29. congratulations – this is the most anti-apple-skewed blog post ever

    you win the coveted golden cookie

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  30. Has anyone though that Google is planing on developing a worldwide wifi network that will offer free access with adverts and paid without the partnership with Apple will allow the next generation wifi enabled Ipod to use the network thus creating a new income stream for both companies you can also bet your anything that Google will ask for finance from Apple to further increase there wifi network faster.

    Remember Google also invested in a wifi company some time ago.

    read more on my blog…

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  31. The Rumble of a Apple-Google Alliance…

    Yesterday’s announcement that Google CEO Eric Schmidt will join Apple’s board of directors is sparking all kinds of theories about what this alliance of giants means. The Wall Street Journal’s Nick Wingfield and Kevin Delaney have thi…

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  32. Well it would be nice if the google services worked with Safari. Currently many of these don’t work at all or only at substandard levels. Even GMail only works in a basic model in Safari.

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  33. I second Anvarzhon’s comment… that’s exactly what I was thinking. If Google is king of web-based apps, let the pod-king build the thin client for it. And considering the Google-Ebay association, could this mean fewer degrees of separation for iChat and Skype?

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  34. IMO, Google could forge partnerships with just about anyone in the industry and strengthen their business somehow. They are king of web advertising and that goes a long way.

    On the flip, every successful company knows that Google is a powerful service and is smart to jump on their wagon.

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  35. It means exactly nothing between Apple and Google. It is Schmidt who has been elected to the board, not “the CEO of Google”. That’s an important difference.

    In fact, as I understand the way, way, way complicated laws of Sarbanes-Oxley and the like, if Schmidt was to be seen to have an influence on a Google-Apple relationship, that would be a very naughty, SEC-coming-down-on-you-like-a-ton-of-bricks conflict of interest

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  36. I, for one, welcome our new Goople overlords!

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  37. Apple Google = Worries For Everyone…

    Intersting developments on the Apple and Google front, two companies whose products I am very fond of. Eric Schmidt the CEO of Google has joined the Apple board. As many people are saying, the products from this union will be…

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  38. Well, the .Mac angle suggested above is interesting enough to mull on its own, actually. It’s obviously too Mac-centric to have general impact, but I think it’s going to generate a lot of wishful thinking.

    Heck, even I started doing it…

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  39. Schmidt and winds of Apple-Sun…

    A quick browse of the Web to see what speculation emerged after the news that Google CEO Eric Schmidt will join Apple’s board came up with a ditty from one John Dvorak: Is an Apple-Sun merger in the works? Dvorak…

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  40. Personally, I tend to agree about the dot-Mac thing.

    Consider people appointed to the board. Al Gore knows alot about government purchasing, having changed the system while Vice President. And there’s the guy from J. Crew, who knows alot about retail operations.

    So one possibility is that Schmidt is there to try to sort out Apple’s online strategies in regards to iTunes, iPhoto, dot-Mac, etc.

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  41. has anyone asked themselves how Google fits into Leopard ???

    :)-

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  42. The Era Of Free (or really cheap) Great Technology…

    It’s really an exciting time to be a technologist and an artist, particularly at a time when great technology allows many more people to create…

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  43. Googlers will try to have a bite at apple if possible.Apple thinks it can fight fight against microsoft if google helps it.

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  44. [...] those last two are about Apple. Because the deal between Google and Apple is sweetening every day. And Apple doesn’t really buy companies, Google does. So that’s why Google bought Jaiku [...]

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