Google CEO Eric Schmidt to Discuss Role on Apple's Board in Wake of Chrome OS Announcement

[MacRumors]

http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com/2009/07/10/google-ceo-eric-schmidt-to-discuss-role-on-apples-board-in-wake-of-chrome-os-announcement/)

Reuters reports (http://www.reuters.com/article/technologyNews/idUSTRE5690G320090710) that Google CEO Eric Schmidt, who has served on Apple's Board of Directors since 2006, will discuss with Apple how his role on the board may change in the wake of increasing overlap between the two companies' markets. The report comes just one day after Google announced that it will be entering the operating system market with Chrome OS (http://www.macrumors.com/2009/07/08/google-announces-google-chrome-operating-system/), initially targeted at netbook computers.Because Google's new Chrome OS would compete with Apple's own computer software, Schmidt said on Thursday he would talk to the Mac computer maker about whether he should recuse himself from Apple's board.

"I'll talk to the Apple people. At the moment, there's no issue," Schmidt told reporters at a Sun Valley media and technology conference organized by boutique investment bank Allen & Co.The U.S. Federal Trade Commission last month reportedly began taking an interest (http://www.macrumors.com/2009/05/04/federal-trade-commission-investigating-apple-google-ties/) in the two companies' ties for potential antitrust reasons, as both Schmidt and Arthur Levinson, former CEO of biotech firm Genentech, are directors of both Apple and Google.

With Google's release of its Android operating system for mobile phones, Schmidt has recused himself from discussions regarding the iPhone at Apple board meetings, and it now appears that the operating system overlap between the two companies may necessitate further restrictions on Schmidt's participation with Apple, if not an outright resignation if potential solutions are deemed unworkable.

Article Link: Google CEO Eric Schmidt to Discuss Role on Apple's Board in Wake of Chrome OS Announcement (http://www.macrumors.com/2009/07/10/google-ceo-eric-schmidt-to-discuss-role-on-apples-board-in-wake-of-chrome-os-announcement/)

[fletch33]

interesting. if it is anything like "Google's release of it's Android mobile phone" then i see no reason that he should step down as it will also be quickly forgotten ;)

[Meandmunch]

Time to step down. If the guy can't be fully briefed on the happenings of the company then there becomes less and less point keeping him around. He may already be looking for a way out and this was a subtle (not so subtle) way of doing it.

[andiwm2003]

well, he should not discuss his role in the future.

he should discuss his role over the past 12 month.

google certainly worked on the chrome OS and the related business strategy for the past year. and sitting on the board of a company startegically based on a cutting edge OS certainly helped a lot.;)

[Porco]

"Come in Agent Schmidt! Your work is done. The turtle has left the ocean. REPEAT: The turtle has left the ocean."

[Crash Override]

He may simply be playing some games with Jobs....these guys think alike, according to what I see and read. With MSFT tying to horn in on Google with BING and Apple's shared disdain for them, you never know! You are assuming that this isn't something that they have been planning. Jobs thinks way, waaay ahead. Either he's furious that Google is treading on their turf, or there may be a long-term goal or opponent in the marketplace the two companies share.

Don't scream mutiny quite yet...

[sbrhwkp3]

I was thinking about this the other day.

Certainly an interesting situation. I don't see google's OS going very far though.

[Chintan100]

Resign from Apple's board, Schmidt. "Dont Be Evil". :p

[sbrhwkp3]

He may simply be playing some games with Jobs....these guys think alike, according to what I see and read. With MSFT tying to horn in on Google with BING and Apple's shared disdain for them, you never know! You are assuming that this isn't something that they have been planning. Jobs thinks way, waaay ahead. Either he's furious that Google is treading on their turf, or there may be a long-term goal or opponent in the marketplace the two companies share.

Don't scream mutiny quite yet...

I tried bing the other day. I hate it.

[Chintan100]

I was thinking about this the other day.

Certainly an interesting situation. I don't see google's OS going very far though.

You are right. It wont go too far IMO.

Will its wallpaper be randomly changing ads? :confused: :D ;)

[realgenius]

Why don't Google and Apple merge and just get it over with?

[zombitronic]

Well, Apple doesn't sell a netbook, so...

I understand that this could potentially be used for desktops and laptops. Unless they charge for it, I don't think he should step down. I think it's good to have a "competitor" so close to you. It's like the old quote; "Keep your friends close. Keep your enemies closer." Not that they're even enemies.

Seriously, this will hurt Microsoft more than Apple. This will presumably be able to run on a Mac, so I see the issue. However, not many people buy a Mac only to install an OS on it other than OS X. There are already a ton of PCs out there. If the claim is that the PC market will boom because of Chrome OS, I don't buy it. These are the hundreds of thousands of non-specialty machines that run an OS as a commodity, not a feature. Unless Google starts selling their own line of computers, I don't feel that Schmidt should leave.

[oTaRu]

I wonder what's Eric Schmidt had spoke to Steve....


"Sorry Steve... I should have told you earlier..."

or

"Oh Steve... It's about time..."

or

....

[jaw04005]

Also in the article was this:

Schmidt also said he was kept well abreast of the circumstances surrounding Apple founder Steve Jobs' medical leave of absence.

In January, Jobs began a nearly six-month leave to seek treatment for unspecified health issues. He received a liver transplant while on leave, and returned to work last week.

Apple and its board have been criticized by some observers for failing to disclose the exact state of Jobs' health.

"I was extremely well-informed as a board member with what was going on with Steve," Schmidt said. He declined to comment further on the matter.

[DELLsFan]

...With Google's release of its Android operating system for mobile phones, Schmidt has recused himself from discussions regarding the iPhone at Apple board meetings, and it now appears that the operating system overlap between the two companies may necessitate further restrictions on Schmidt's participation with Apple, if not an outright resignation if potential solutions are deemed unworkable...

Schmidt needs to recuse himself further - by resigning from Apple's Board. In my view, it became a conflict of interest the moment Android was released. I think there is nothing but bad news for Apple and Google both if he stays on after the Chrome OS is released.

[Chintan100]

Well, Apple doesn't sell a netbook, so...


He may even be told to resign because Apple may be working on a netbook.

Ok, yeah, i know, they have denied it but thats how they work.

They even said they wont be making cheaper iPods without a screen and after 3 months came the iPod shuffle.

Apple's netbook (or whatever similar portable device they make) may be debut next year co-inciding with Chrome OS'es launch.

So there's the problem as i see it.

[smakdown61]

Seems like there might be some competition between apple's upcoming mini tablet and a google chrome netbook....

[Mackan]

I see no point in him staying on Apple's board. That left out multitouch thing on the Android still comes to mind... when others like Palm and HTC use it.

[TwinCities Dan]

It's probably time to step down. The Apple/Google relationship has been great but there seems to be more and more overlap as of late.

[*LTD*]

At present I don't see how a free, netbook-centric Google Chrome would compete with Apple's full-blown OS X. Unless this is all confirmation that Apple will indeed be releasing a tablet-like device. But even then, it will be quite different from your average netbook running a slim/underpowered OS. If Apple goes after the "low end" of the market it certainly won't feel like it.

In any case, if Jobs thinks there's a conflict of interest, he'll ask Schmidt to leave. If not, then there's no problem.

Really not a big deal.

[thegoldenmackid]

Given his stance with the iPhone it would seem logical that he would recuse himself here too, I guess he could stay onto discuss: Hardware Design, Apple TV, MobileMe, etc...

[talkingfuture]

This could have an important outcome. Google and Apple could be powerful allies in the future, I'd prefer that to fierce rivals.

[iPhoneNYC]

Sha-na-na-na, Hey hey, good-bye.

[Ksg89]

IMHO they are very different markets, unless apple are moving into the "notebook" market ^_^

[KTut]

To even things out Steve Jobs should be made a member of Google's board!

Then they can both report back about the other... :)

[aristokrat]

I think the only thing these companies have to worry about is anti-trust allegations. Apple is a hardware company with some of the highest brand loyalty around, and Google is a software company with emerging loyalty. They both cater to somewhat different markets, and they both stand to gain more by working together than lose (Microsoft is the one who stands to lose the most due to their creative synergy). Unless of course there is anti-trust legislation, in which case they could both lose a lot.

[SolRayz]

I think the only thing these companies have to worry about is anti-trust allegations. Apple is a hardware company with some of the highest brand loyalty around, and Google is a software company with emerging loyalty. They both cater to somewhat different markets, and they both stand to gain more by working together than lose (Microsoft is the one who stands to lose the most due to their creative synergy). Unless of course there is anti-trust legislation, in which case they could both lose a lot.

My thoughts exactly. Like you said it seems that Microsoft has the most to loose out of all this, more so than Apple.

[nws0291]

I think from the other point of view Apple might be moving into Google's territory now that they are gearing up with large server farms across the country. They may be moving to add a service based model with these farms which is what Google is.

[BongoBanger]

At present I don't see how a free, netbook-centric Google Chrome would compete with Apple's full-blown OS X.

I can't see how it wouldn't considering the qualities they say it'll have.

[fleshman03]

My bad... Someone will come along and delete this... hopefully.

[fleshman03]

eh mem, From Fake Steve Jobs (http://fakesteve.blogspot.com/2009/07/lets-all-take-deep-breath-and-get-some.html):

Or, as I just told Eric on the phone a few moments ago: Dear friend, I realize you think I'm weak right now, and maybe a little bit vulnerable, and you may also still be a little bit peeved because even though you're on the board at Apple I didn't tell you about the surgery I was having and instead led you to believe that I had moved to Tennessee because I needed to negotiate some country-western deals for iTunes. Okay. Fair enough. And I know you think you got a lifetime free pass on ****ing me over after you and Al Gore bailed me out of that jam with the SEC investigation of the options backdating a couple years back. But, dear friend, enough is enough. You really need to think about what you're doing and who it hurts. Seriously. I mean it. Do some thinking. Meanwhile, for the time being, I've instructed Apple security to revoke your pass at Infinite Loop, and I would really, really, really appreciate it if you would just not call me or come around here anymore. Because if you do, well, I'm just so upset about all this that I might just -- well, honestly, Eric, I'm afraid I couldn't be responsible for what I might do. I will hurt you, Eric. I'm sorry, but I will. Are you feeling me? Because that's how it is. Seriously, bitch. It's over between us. Namaste.




Talk about insight...

[jdechko]

I think from the other point of view Apple might be moving into Google's territory now that they are gearing up with large server farms across the country. They may be moving to add a service based model with these farms which is what Google is.

MobileMe or iTunes Store/App Store? All we know regarding the server farm in NC is that 1)it's going to be built and 2)Apple is going to build it. Anything else at this point is pure speculation. However, I am not above providing my own speculation and the services I mentioned are either currently really slow or they are rapidly expanding, making additional servers necessary.

[GQB]

Having Schmidt on the board is a classic case of keeping your friends close and your 'enemies' closer.
Check out Fake Steve's take on this (glad he's back instead of the crappy 'serious' column he tried for a while)...
http://fakesteve.blogspot.com/2009/07/lets-all-take-deep-breath-and-get-some.html
Remember, since Apple is not going to go with netbooks (the target for the Chrome OS), the conflict is with MS, not Apple.

[jdechko]

I also wanted to bring up John Gruber's (http://daringfireball.net/) point on the matter (emphasis mine):

I don’t understand why so many outsiders are concerned about this. If Steve Jobs and the other members of Apple’s board think Schmidt’s spot on the board poses a competitive conflict of interest, they’ll ask him to leave. If they don’t, then what’s the problem? Does Tom Krazit really believe he has a better grasp of Apple’s competitive position versus Google than Jobs? Does he think Jobs is too shy or polite to confront Schmidt?

Remember this is the same Steve Jobs who got all of the major record labels to agree to flat iTunes pricing, which was only given up when all of the music went drm free. The same Steve Jobs who negotiated the iPhone trademark away from Cisco. Steve Jobs who, after being stood up by IBM (3.0GHz G5, anyone), gave IBM the middle finger and left for Intel.

So if Steve Jobs doesn't want Schmidt on the board, Jobs won't hesitate asking him to step down. And I think there's enough mutual respect there, that Schmidt would do it to preserve the business (and likely personal) relationship.

Of course, if the SEC intervenes, it will happen regardless of what Jobs, et. al. think

[DELLsFan]

Having Schmidt on the board is a classic case of keeping your friends close and your 'enemies' closer.
Check out Fake Steve's take on this (glad he's back instead of the crappy 'serious' column he tried for a while)...
http://fakesteve.blogspot.com/2009/07/lets-all-take-deep-breath-and-get-some.html
Remember, since Apple is not going to go with netbooks (the target for the Chrome OS), the conflict is with MS, not Apple.

I still think Apple WILL be releasing a Netbook. Even a Tablet will be close enough for illustrative purposes. Both wouldn't necessarily have powerful processors or graphics - so Tablet ... Netbook .... same thing as far as I'm concerned.

Even if you are right about Apple not releasing a Netbook, there is still the conflict of Android vs. iPhone. One might also argue Google Maps and Safari - Google search could also be perceived as dubious.

[SBlue1]

However, not many people buy a Mac only to install an OS on it other than OS X.

you got the point! these people will never become apple customers. though they are pissed by vistas bugs and viruses and may consider to switch to mac, now they got a second option in chrome. this is where apple may get hurt.

[*LTD*]

eh mem, From Fake Steve Jobs (http://fakesteve.blogspot.com/2009/07/lets-all-take-deep-breath-and-get-some.html):



Talk about insight...

Love it.

[Peace]

Well, Apple doesn't sell a netbook, so...

I understand that this could potentially be used for desktops and laptops. Unless they charge for it, I don't think he should step down. I think it's good to have a "competitor" so close to you. It's like the old quote; "Keep your friends close. Keep your enemies closer." Not that they're even enemies.

Seriously, this will hurt Microsoft more than Apple. This will presumably be able to run on a Mac, so I see the issue. However, not many people buy a Mac only to install an OS on it other than OS X. There are already a ton of PCs out there. If the claim is that the PC market will boom because of Chrome OS, I don't buy it. These are the hundreds of thousands of non-specialty machines that run an OS as a commodity, not a feature. Unless Google starts selling their own line of computers, I don't feel that Schmidt should leave.

Schmidt needs to recuse himself further - by resigning from Apple's Board. In my view, it became a conflict of interest the moment Android was released. I think there is nothing but bad news for Apple and Google both if he stays on after the Chrome OS is released.

At present I don't see how a free, netbook-centric Google Chrome would compete with Apple's full-blown OS X. Unless this is all confirmation that Apple will indeed be releasing a tablet-like device. But even then, it will be quite different from your average netbook running a slim/underpowered OS. If Apple goes after the "low end" of the market it certainly won't feel like it.

In any case, if Jobs thinks there's a conflict of interest, he'll ask Schmidt to leave. If not, then there's no problem.

Really not a big deal.


The ongoing development of OSX Snow Leopard has me convinced Apple is coming out with a multi-touch Pad.


All of this. All of this reminds me of when Real.com's director was with Microsoft before MS had a media player in it's O/S.

Microsoft simply allowed Real to work with them. Then they ripped them off then they sent Real on it's way. Then a few months later
MS had windows media player. That was the beginning of the end for Real.com.

Sadly I saw this same scenario happening when Schmidt joined Apple's board.

So in reality who would be ripping off whom. It's a two-sided coin. Schmidt may be leaving because Apple has taken some stuff from Google too.

Map integration etc. What will become of that ?

In any case Schmidt needs to go.

[jaw04005]

Let's be honest, Apple's board is not your typical Fortune 500 board. While Apple's board members are qualified and well respected in their own industries, they serve as almost figureheads with Jobs and company running the show.

"The Clayton Antitrust Act of 1914 prohibits a person’s presence on the board of two rival companies when it would reduce competition between them."

That's not what's happening here. If anything, it's spurring competition since Google offers a WebKit browser, a phone operating system and a browser-based netbook operating system.

The only group that should concerned with Schmidt's role is shareholders. And they would only be concerned if Schmidt was actively trying to prevent Apple from moving into spaces that Google already competes in.

Obviously, that's not happening. It's not as if Schmidt or any other board member (other than Jobs) dictates company direction or product development. Schmidt serves on Apple's board simply because Steve Jobs wants him to. While I'm sure he acts as an adviser, his main role is essentially symbolic.

Move along FTC.

[fishmoose]

If he goes Tim Cook will probably get his spot, but as jdechko quoted from Gruber, Jobs would ask if he felt the need so nothing to worry about.

But an interesting topic for discussion.

[carmenodie]

ok how do you make money from your OS? You get royalty money from pc vendors ala MS. How does Google make its money? Off of ad revenue.They have elaborate profilers behind the scenes that monitor you like a lab rat.Their info is worth billions! Now to get into a full swing OS game will take billions, which Google has but it will also take a commitment by the pc vendors. They would have to allot a certain amount of pcs just for Google cause MS ain't gonna have no ****ing Google OS along side their **** out the box. So Google would have to spend billions on an ecosystem to compete with the highly entrenched and institutionalized world of MS. Good luck. Oh, then Google would have to battle MS in court to get them, to open up code so they can easily cross platform with then. Got to think of the consumer right? Good luck. By then MS would have bought Yahoo and all hell would have broken loose as MS starts yanking ad mulla from Google. There goes Google's stock price.
You get the picture. Good luck.
I'll stick with Apple thank you.

[TMar]

Let's be honest, Apple's board is not your typical Fortune 500 board. While Apple's board members are qualified and well respected in their own industries, they serve as almost figureheads with Jobs and company running the show.

"The Clayton Antitrust Act of 1914 prohibits a person’s presence on the board of two rival companies when it would reduce competition between them."

That's not what's happening here. If anything, it's spurring competition since Google offers a WebKit browser, a phone operating system and a browser-based netbook operating system.

The only group that should concerned with Schmidt's role is shareholders. And they would only be concerned if Schmidt was actively trying to prevent Apple from moving into spaces that Google already competes in.

Obviously, that's not happening. It's not as if Schmidt or any other board member (other than Jobs) dictates company direction or product development. Schmidt serves on Apple's board simply because Steve Jobs wants him to. While I'm sure he acts as an adviser, his main role is essentially symbolic.

Move along FTC.

It's not how much control they have it's in the information they are privy to. It will be interesting to see what comes out of this if Apple was not aware of the Chrome OS up until the other day.

[xIGmanIx]

i think its the right thing to do to ensure both companies best interests are met, i have no problem with him being a member of both. Its quite common for board executives of their stature to be a member of more than one board.

[twoodcc]

well i like that schmidt is open to remove himself from apple's board b/c of this.

[JohnnyLemonhead]

No. There's no overlap. Both companies are going to be making operating systems, but there's no overlap there.

[JohnnyLemonhead]

If he goes Tim Cook will probably get his spot, but as jdechko quoted from Gruber, Jobs would ask if he felt the need so nothing to worry about.

But an interesting topic for discussion.

Oh dear god I hope it isn't Tim Cook. I can't STAND that guy. Can't stand him.

[Bubba Satori]

I, for one, welcome our oligarch masters. We are not worthy.

[fishmoose]

Oh dear god I hope it isn't Tim Cook. I can't STAND that guy. Can't stand him.

Why? He seems to be a nice guy.

There are many rumors that he will be voted into the board anyway.

[Blacklabel34]

Google's OS will be like a ship. The moment it comes out it will start to take on water and we all know what happens after that.







ABANDON SHIP!!!

[denverpaul]

I know it may not be the best place for it, but I am currently studying for the bar exam and found this topic very interesting. Here are some basic tenants of the law of corporations. In actuality, as a member of a board of directors, Schmidt may owe more duty/loyalty to Apple than his own company.

Duty of Care
"A director owes the corporation a duty of care. He must act in good faith and do what a prudent person would do with regard to his own business."

Duty of Loyalty
"A director owes the corporation a duty of loyalty. He must act in good faith and with a reasonable belief that what she does is in the corporation's best interest."

Some key examples of breaching a duty of loyalty is an interested director transaction (probably not applicable), Competing Ventures, and corporate opportunity. A director cannot usurp a corporate opportunity through a competing venture or exploiting a corporate opportunity. If he does, the corporation is entitled to the profits from that breach of the duty of loyalty.

So, whether or not people think Chrome OS/Android are wise/feasible ventures, it's clear that the overlap is a major problem for Schmidt, and, in turn, Google. He has a responsibility to step down from the board of Apple or Apple's shareholders have a responsibility to kick him out. If neither happens, perhaps Apple could go after the profits from the ventures or the Justice Department could do the antitrust dance, as others have suggested.

[JohnnyLemonhead]

Why? He seems to be a nice guy.

There are many rumors that he will be voted into the board anyway.

I was just kidding. I have no idea who he is. I was just saying what people would say. :)

[serialtoon]

interesting. if it is anything like "Google's release of it's Android mobile phone" then i see no reason that he should step down as it will also be quickly forgotten ;)
Forgotten? It's everywhere!

[fletch33]

Forgotten? It's everywhere!

well that was probably a little exaggeration ;)

what i meant was that the shine wore off it pretty quick and it didnt seem to "take off" as much as it was hyped before the release.

i have nothing against Google and i hope they are successful but my guess it will become linux like. meaning it can be great and very useful and free all at once but will most likely not become any competition for windows or apple.

a couple of years ago i took my laptop that i use for work exclusively as well as personal and put linux on it (ubuntu) and this forced me to learn it. i kept it exclusively for a little more than 6 months but eventually went back to mac and xp for the ease of use. i then went fully mac since then with just windows installed for those few programs or devices that require it which is very seldom that it is needed. i learned that if you like the freedom of linux but at the same time often want something to just work without repositories or command lines then OS X is the only solution as it to me is kinda like linux on steroids.

good luck to google. competition is always good.

im sure this post with have many disagreeing especially with the linux comments but just my thoughts.

[jbernie]

Let's be honest, Apple's board is not your typical Fortune 500 board. While Apple's board members are qualified and well respected in their own industries, they serve as almost figureheads with Jobs and company running the show.

"The Clayton Antitrust Act of 1914 prohibits a person’s presence on the board of two rival companies when it would reduce competition between them."

That's not what's happening here. If anything, it's spurring competition since Google offers a WebKit browser, a phone operating system and a browser-based netbook operating system.

The only group that should concerned with Schmidt's role is shareholders. And they would only be concerned if Schmidt was actively trying to prevent Apple from moving into spaces that Google already competes in.

Obviously, that's not happening. It's not as if Schmidt or any other board member (other than Jobs) dictates company direction or product development. Schmidt serves on Apple's board simply because Steve Jobs wants him to. While I'm sure he acts as an adviser, his main role is essentially symbolic.

Move along FTC.

Apple has a mobile phone OS (+phone)
Google has a mobile phone OS

Apple has a productivity suite (offline)
Google has a productivity suite (online)

Apple has a graphics application (offline)
Google has a graphics application (online)

Apple has an operating system
Google has an operating system (coming)

Apple has online tools via mobile me (email etc)
Google has online tools (email etc)

At the rate they are going Schmidt can sit on discussions/decisions relating to the iPod, Mac hardware (laptops/desktops), general financial issues and not a whole lot more, and this is assuming that neither company actually has hidden conflicts due to potential products we are not aware of.

I would say that if there is not enough there to cause a true conflict on interest, if i were an Apple shareholder I would at least question whether or not Schmidt should continue to be paid as his current level of compensation or not. With as much recusing as would seem to be needing to do, he should at least take a pay cut to remain on the board as the shareholders are not getting the full value for money.

In this case, I don't know if there is enough true conflict for him to resign, but in these types of matters it is just as much a matter of the perception of conflict as there is the actual amount of conflict. Many public figures have been forced to resign for much less..and of course.. much more.

[TurtleTraction]

... such a good things after all. Apple and google have been going hand in a hand for sometime. But as a long time Apple/Mac user (+15 year) I at least have learnt to appreciate the greatness of apple/mac. With a house full of macs i don't really want Google to know my business just because I use mac. Don't get me wrong, I use google every day as there is no better option but they tend to keep more information than they ever need if the purpose, was only the provide a good search engine.

the closer google and apple gets, the interaction between pc (personal computer) and internet (sevdo public domain) gets and this is the area where google lives, monitoring of the public domain for the purpose of profiteering on the information gathered.

Google is scary and apple is not (at least not yet) please apple if I could ask for one thing is stay away from them and in the long run you will be better off.

ps I have never worked for either comanyjust made use of them for a very long thing ds

[MacCheetah3]

Hi
i have nothing against Google and i hope they are successful but my guess it will become linux like. meaning it can be great and very useful and free all at once but will most likely not become any competition for windows or apple.
My thoughts exactly. A great, free primarily Windows alternate best suited for certain uses and / or hobbyist. No significant threat to Windowa or Mac OS.

[slackpacker]

Cut out that cancer. Eric is just using Apple .... say goodbye to Google they are the new Darth Vader.

[xIGmanIx]

I know it may not be the best place for it, but I am currently studying for the bar exam and found this topic very interesting. Here are some basic tenants of the law of corporations. In actuality, as a member of a board of directors, Schmidt may owe more duty/loyalty to Apple than his own company.

Duty of Care
"A director owes the corporation a duty of care. He must act in good faith and do what a prudent person would do with regard to his own business."

Duty of Loyalty
"A director owes the corporation a duty of loyalty. He must act in good faith and with a reasonable belief that what she does is in the corporation's best interest."

Some key examples of breaching a duty of loyalty is an interested director transaction (probably not applicable), Competing Ventures, and corporate opportunity. A director cannot usurp a corporate opportunity through a competing venture or exploiting a corporate opportunity. If he does, the corporation is entitled to the profits from that breach of the duty of loyalty.

So, whether or not people think Chrome OS/Android are wise/feasible ventures, it's clear that the overlap is a major problem for Schmidt, and, in turn, Google. He has a responsibility to step down from the board of Apple or Apple's shareholders have a responsibility to kick him out. If neither happens, perhaps Apple could go after the profits from the ventures or the Justice Department could do the antitrust dance, as others have suggested.

This is why everyone hates lawyers, no one was really talking about money....

[andy721]

I hope this doesn't happen GOOGLE is so corrupt.

[Superdelphinus]

i learned that if you like the freedom of linux but at the same time often want something to just work without repositories or command lines then OS X is the only solution as it to me is kinda like linux on steroids.



os x is not remotely "free" in the linux sense of the word

[Superdelphinus]

what exactly have been the fruits of the apple/ google relationship?

[Kwill]

buh bye!

[upinflames900]

Dumb move by google, and what does Schmidt think is going to happen...apple say to him, "Oh thats okay even though you decided you wanted to compete against us you can still make decisions that affect our company." I think that this will backfire big for google if it really turns out to be a competitor.

[NickK1066]

It's interesting Google Analytics gets a stream from each Safari user.

With this guy off the board does that sever this link for Goggle?

Additionally with all the verticalisation of the markets (from user down through applications to the phone OS) these companies are making themselves the new IBMs.

[jaw04005]

At the rate they are going Schmidt can sit on discussions/decisions relating to the iPod, Mac hardware (laptops/desktops), general financial issues and not a whole lot more, and this is assuming that neither company actually has hidden conflicts due to potential products we are not aware of.

I would say that if there is not enough there to cause a true conflict on interest, if i were an Apple shareholder I would at least question whether or not Schmidt should continue to be paid as his current level of compensation or not. With as much recusing as would seem to be needing to do, he should at least take a pay cut to remain on the board as the shareholders are not getting the full value for money.

Apple shareholders re-elected him this past Spring as as director. Clearly, they're not concerned.

Jobs and company may feel that Schmidt's knowledge in certain areas and his role as an adviser to Apple outweighs the potential loss of trade secrets with regards to Apple products.

Schmidt has been in the business world a very long time. I personally don't believe he's leaking information back to Google about future Apple product development. I'm fairly sure that would be illegal anyway. Again, his role on the board is purely as an adviser and symbolic.

If Jobs feels otherwise, he'll ask him to leave.