Google CEO joins Apple board - is there more to this?

Google CEO Eric Schmidt is joining the board of Apple Computer. Om Malik thinks this could lead to closer cooperation between the two, and headaches for Microsoft. Maybe, but I don't think so. 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.

Strategic alliances, board seats, and press releases make for good stories, but business is driven by real customer demand for products and services. Years ago when I worked in business development we called these things "Barney Agreements". You know..."I love you, You love me, ..."

Nothing really happens unless money changes hands. Each company will do whatever is in their best interest. More specifically, each salesperson still has a quota and will do whatever it takes to make it happen. Most times strategic alliances only confuse the sales process or slow it down.

Even when strategic alliances turn into a merger it is still hard to find the synergies. Remember AOL and Time Warner? AOL was the dominant Internet company at the time, and Time Warner was the biggest content provider in the world. Television, movies, music, magazines...they had it all. AOL would be the perfect Internet channel for all this content. The synergies were limitless. Well, we all know how that turned out.

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.

Could Google and Sun cooperate on a StarOffice product to compete with Microsoft Office? Could Google and Apple cooperate on an iTunes product to crush Zune before it launches? Could Google and Mozilla cooperate on a product to compete with Internet Explorer? Sure, there are lots of synergies smart people could imagine. But unless there is pent up customer demand...it isn't going to matter.

UPDATE: ValleyWag contributes "Six effects of Eric Schmidt joining Apple's board"  I think Nick Douglas is onto something with his secret sources.

Comments

[Al]

Nice point Don and much more practical than the other blogger' raves on this meme..

But a Google friendly OS could feed customer demand.

Both Apple and Google could benefit from making their products work better together :
.Mac/iWork GDrive/GApps
or even
iLife/iTunes GDrive/GMedia ?

Spotlight GSearch

there's probably more examples.

And google have been kinda active recently on getting their apps ported/fixed for OSX

The friendly approach (Board level) might be the preferred way to work together.

There is certainly demand for these kind of improvements in both camps. These could benfit and drive the consumer demand.

regards
Al

[Mike]

What about FairPlay being licensed to Google?

[Pascal]

Very good Post, I agree totally all point, Success is driven by Customers, not by subjective stories

[Massimo Moruzzi]

>Could Google and Mozilla cooperate on a product to compete with Internet Explorer?

yeah, like there were a need to cooperate. Like Firefox weren't already a thousand times better than... IE. ROTFL :)))

[John Furrier]

It's more than a Barney deal. Even though Eric won't have access to all the product knowledge, he *will* have visability to all the board business of Apple.

[Eric]

You mean Firefox isn't a "Google Browser" already?

- Mozilla Corp's profits almost entirely come from Google.
- Google's search box is the default.
- Google heavily pimps the browser with the Google toolbar.
- I'll lay odds that a good chunk of the code contributions come from Google employees.

As far as Google/Apple goes, the logical synergy isn't with iTunes but with Office Apps. Apple stands to benefit greatly from a platform-agnostic office suite. Google stands to benefit from having a pretty OS to display those web apps. Since the two companies have a similar demographic for users, the users would be quite happy with better compatibility and integration than is currently available.

But as you say, it's easy to imagine a lot, it's not realistic to imagine anything though unless something is announced.