Google alliances do not come with 'non-compete' clauses

Google CEO Eric Schmidt’s newfound professional intimacy with Apple CEO Steve Jobs recalls the ongoing collaborative competition he enjoys with eBay CEO Meg Whitman.

Google CEO Eric Schmidt has become a member of Apple’s Board of Directors to help “guide Apple in the years ahead.”

Apple describes the function of its Board of Directors:

It is the paramount duty of the Board of Directors to oversee the CEO and other senior management in the competent and ethical operation of the Company on a day-to-day basis and to assure that the long-term interests of the shareholders are being served.

Schmidt, of course, also sits on Google’s Board of Directors. Google describes the principal duties of its Board of Directors:

The fundamental responsibility of the directors is to exercise their business judgment to act in what they reasonably believe to be the best interests of Google and its stockholders.

Schmidt, then, is not only ethically bound to advise Google on what is in the best interests of Google shareholders, he is also ethically bound to advise Apple on what is in the best interests of Apple shareholders.

Google, the company, derives its inspiration from a mathematical term, “Googol" and Google’s Schmidt is fond of using mathematical formulas to illustrate what he believes is the inordinate power behind everything Google does. In announcing Google Checkout for example, Schmidt declared:

The goal here is to make it be one nanosecond from the time the customer decides to buy to the time the transaction is complete and the product is on the way.

Schmidt’s conviction in an almost otherworldy Google force sometimes leads him to cavalierly promise unrealizable QoS provisioning. However, he would undoubtedly himself acknowledge the strong, realistic probability that he will one day find himself advising Google on a competitive move against Apple just as one day he will find himself advising Apple on a competitive move against Google.

Schmidt’s newfound professional intimacy with Apple CEO Steve Jobs recalls the ongoing collaborative competition he enjoys with eBay CEO Meg Whitman. In “Google and eBay CEOs agree: growth through more partnerships” I cite Whitman on her characterization of eBay’s relationship with Google:

Google is a very important part of our strategic alliances and we do a lot with them. But, you know, they’re also going to compete with us in a number of areas.

Whitman also reflected on the collaborative competition eBay has fostered with Yahoo:

I think the most interesting thing about the last couple of years is this, you know, cooperation and competition. You know, we compete with Yahoo, and we now have a very big partnership with them.

I think in the old days, when I was growing up in business, you never did anything with a competitor. You know, when I was at Hasbro, we didn’t do a lot with Mattel. When I was at Proctor & Gamble, we didn’t do much with Colgate. But it’s a different world.

So we struck this very big deal with Yahoo, and then a week later they invested in our largest competitor in Korea. I don’t’ know - I think it’s sort of the New World Order, and I knew it was happening and it didn’t really bother me.

In “Google CEO likes AOL, eBay, Apple, Sun but not Microsoft, Yahoo” I present the collaborative competition Schmidt has embarked upon with four fellow technology titans over the past year.



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