Monday, August 3, 2009

Google's frenemies

The Merc Q&A with Eric Schmidt Sunday didn’t say much, but given how secretive Google is, it spoke volumes, particularly about two key frenemies.

Wikipedia (that most reliable of all sources) defines “frenemy” in part:

It is commonly used to describe two people who are apparently friends, but actually dislike each other. This may be because they feel the need to keep up appearances, or because they do not want to lose mutual friends.…

Alternatively, two people who are apparently enemies may actually be friends in private, with the apparently hostile relationship portrayed in order to deceive third parties, or for other forms of gain.
For Google, a good example of the former would be Microsoft, while Apple would perhaps fit the latter. (In strategy, we have the more precise term “coopetition”).

From the Schmidt interview, here’s the relevant excerpt about Microsoft
Schmidt: Google has recently announced a product called Glook and that product allows Outlook users to use Gmail as their back end. How is that going? And the answer is it is going pretty well.

Q: How did the relationship go? The companies had to work together to make that happen.

Not very much. I don't want to overstate it. Because of the historic tension with Microsoft, we do not have a lot of collaboration with Microsoft. (This interview was conducted before the search partnership between Microsoft and Yahoo was announced.)

Q: You and Steve Ballmer have not smoked a peace pipe?
Schmidt: That is correct.
And the final exchange:
Q: You recently gave Bill Gates some advice on handling the media. If you were Steve Ballmer, how would you compete with Google?

I am not going to give Steve Ballmer any advice. He is doing just fine without my advice.
Of course, Schmidt built his career as right hand man to Scott McNealy — then CEO (now chairman) of Sun Microsystems — who pursued Microsoft as though it were Moby Dick. At least Schmidt (unlike McNealy or Ahab) has a chance of winning.

Meanwhile, Google seems to get along just fine with its Cupertino-based smartphone rival.
Q: Google and Apple are increasingly in the same businesses, namely operating systems for mobile phones and now with the announcement of the Chrome OS, personal computers. Is it also becoming increasingly problematic for you to be on Apple's board?

Schmidt: I am not sure about the board question. The board question can be solved by recusing yourself, which I do with the iPhone.

It is also important to remember that unlike Microsoft and Google, Apple and Google have a lot of technical partnerships. The underpinnings of Chrome are the same as that of Apple's Safari browser. There is a lot of collaboration around Web standards. We collaborate on the maps area. We have a large number of iPhone apps.

There are significant benefits to Apple and to Google for me to be on both boards with the caveat that you mentioned that you have to be very careful.
This fits one of my basic points: in business as in geopolitics, there are no permanent allies, just permanent interests. Their interests are clearly aligned in supporting WebKit’s continuing success, while Google provides a lot of complements for the Mac and iPhone platforms. More broadly, like many other ICT companies they have collaborated in defining and implementing interoperability for key Internet technologies.

Obviously there’s a lot warmer relationship — both at the corporate and personal level — between Google and Apple. Schmidt and Jobs started out much better off than McNealy and Gates (now Schmidt and Ballmer) ever managed in the best of times, even if there is speculation Schmidt will have to resign the Apple board seat.

Update Monday 1pm: Oops, I obviously underestimated how soon Schmidt would be leaving the Apple board.

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