Google’s Eric Schmidt Won’t Talk About The iPhone At Apple Board Meetings

This week’s New Yorker features an article by Ken Auletta about Google’s growing lobbying efforts and general education in Washington politics. The article recaps much of what most regular observers already know about Google, but there are two items that caught my eye—both shoehorned in towards the end.

One is the startling fact that because of Google’s increasing interest in the mobile phone industry (it is bidding for wireless spectrum and has created Android, a new open-source, mobile operating system), CEO Eric Schmidt, who also sits on Apple’s board of directors:

. . . now recuses himself from mobile-phone discussions at Apple board meetings.

Excuse me? I guess that’s commendable. Schmidt knows he has a conflict of interest there. But what good is a board member who cannot talk about a company’s hottest product? The iPhone only represents Apple’s biggest growth opportunity. If Schmidt won’t talk about the iPhone in board meetings with Steve Jobs because he’s gunning for the same market with Android, maybe he shouldn’t be on Apple’s board at all.

The other tidbit that I found noteworthy was this quote from a “senior executive at Time Warner”:

Sometimes I don’t know what to think of Google. We have the best relationship of anyone with Google. On the other hand, you always have to worry when someone gets so much more powerful than all the competition out there. This is why I come down to this: I hope the government starts understanding this power sooner rather than later.

I’ve heard variations of this sentiment myself. There is no shortage of competitors (or potential competitors) who are scared stiff of Google and wouldn’t mind seeing Google’s power checked by the government.

You can see this in the resistance to Google’s proposed acquisition of DoubleClick (which the FTC approved, but now is awaiting the EC’s verdict). There are even grumblings of antitrust action that will no doubt become stronger if Google’s market share in search and online advertising continues to swallow everything else in sight. Concentration of power is not the same as abuse of power, but that won’t stop Google’s growing list of enemies from trying to link the two.

Comments

[bobo:]

That is just ridiculous. Unlike Microsoft, Google has not engaged in illegal conduct. It plays by the rules, and there is nothing stopping anyone starting a better search company.
Compare that to MS who is forcing Vista on new PC buyers, even though they don't want it; try and find a new PC in a shop without this Vista crap.

2008 Jan 14 05:22 AM

[Tom B:]

If Schmidt actually fancies himself a competitor to the iPhone, he needs to quickly swallow a "reality pill".

2008 Jan 14 09:14 AM

[User 75025:]

Schmidt needs to resign from Apple's BOD now! As Chairman Jobs has the responsibility to ensure that his directors are performing in the best interests of the company. A director with an admitted conflict of interest unwilling to discuss a key part of the company's vision is utterly useless. If Jobs doesn't insist on Schmidt's resignation he will be opening himself up to share holder lawsuits.

2008 Jan 14 12:48 PM

[Tom B:]

"Schmidt needs to resign from Apple's BOD now!"

Disagree. If Eric is recusing himself from iPhone related conversations, I'd say keep him. Apple and Google have more potential synergies than the old Windows / Intel partnership of the '90's did.

2008 Jan 14 01:17 PM

[Zak:]

The iPhone is nowhere close to being Apple biggest growth opportunity. You should read up a little bit on the Mac line's rising demands, their overall % stake in the worldwide desktop and notebook markets and surveys of potential computer buyers about which computers they want to buy.

2008 Jan 14 01:19 PM

[Nickg:]

To fear and fret about things that maybe-might happen is the severest kind of "mom-ism." Especially in the face of Schmidt's efforts at avoiding even the appearance of conflict of interest by recusing himself. Apple cheerleading aside, I suspect that Steve Jobs understands that Apple may potentially have more to gain from the relationship, than Google does.

2008 Jan 14 04:14 PM

[Sr. Pessimist:]

What if he was doing something under an e-shroud of secrecy?

2008 Jan 14 08:21 PM