Behind Google's move, a growing rivalry with Apple

Google CEO Eric Schmidt resigned from Apple's board Monday, reflecting increased competition between the two companies as Google expands beyond search.

Rick Wilking/Reuters
Google CEO Eric Schmidt at the Sun Valley Inn in Sun Valley, Idaho on July 9. Mr. Schmidt resigned from Apple's board Monday.

Google wants to be more than the Web’s favorite search engine. But while it prevails in the lucrative world of answering online queries, can it compete with Microsoft’s Windows and Apple’s iPhone, too?

Two developments Monday show that Google is certainly moving aggressively to challenge Microsoft and Apple in areas both consider their bread-and-butter businesses.

The same day Apple announced that Google CEO Eric Schmidt was resigning from its board of directors because of increasing conflicts of interest, Google announced a new advertising campaign – “Going Google” – that is meant to convince businesses to consider its growing suit of software applications.

"What's this all mean for Apple, Google and consumers?" asks PC World blogger Todd Weiss. More innovation, more competition, and "more cool things coming from both companies in the future."

Since Google was started in 1996 at Stanford University in Palo Alto, Calif., it has evolved into one of the world’s most powerful technology companies and is increasingly becoming a major player in much more than search. Its range of products and services now includes the Android mobile operating system, the Chrome Web browser and operating system, Google e-mail, chat, news, and book search.

When Apple blocked a Google app

Technology stalwarts are beginning to chafe as Google moves into their territory. Microsoft and Yahoo have signed a pact (still pending approval from federal regulators) that will challenge Google’s search dominance, and Apple recently nixed a Google phone application from its iTunes App store – a move that has critics crying foul.

Some technology analysts say that Apple blocked the Google Voice application in order to protect AT&T, which is the sole service provider for the iPhone. The Federal Communications Commission (FCC) is now looking into the decision, and has sent letters to Google, Apple, and AT&T asking why the application was blocked. The letter appears to be part of a larger investigation into whether exclusive deals between phone service providers and phonemakers is hampering competition.

It’s unknown if the FCC letter on the move by Apple to block Google Voice hastened the decision. But it seems likely, say some technology industry watchers.

"It is difficult not to make a connection between these two events," wrote Erick Schonfeld on TechCrunch, a technology blog. "If nothing else, last Friday's letters from the FCC was a wake-up call to Apple that Google stands on the opposite side of the fence when it comes to the evolution of the mobile Web."

Conflict of interest

The Federal Trade Commission has also been looking into whether Mr. Schmidt's position on the Apple board broke anti-trust laws.

The increasing overlap between Google and Apple in software (Google's Chrome OS) and smartphone technology (Google’s Android) meant that a split between Schmidt and Apple was probably going to happen at some point.

When Schmidt joined Apple’s board in August 2006, Google was just beginning to move into developing other applications.

Announcing Schmidt’s departure Monday, Apple CEO Steve Jobs said: “Unfortunately, as Google enters more of Apple’s core businesses, with Android and now Chrome OS, Eric’s effectiveness as an Apple Board member will be significantly diminished…. Therefore, we have mutually decided that now is the right time for Eric to resign.”

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