/ 4 August 2009

Google’s Eric Schmidt resigns from Apple board

Eric Schmidt, Google’s chief executive, has resigned from the board of Apple with immediate effect due to increasing conflicts of interest as competition between the two companies grows.

His resignation after three years on the board of the Cupertino-based company comes after the US government announced in May that it was beginning an antitrust investigation into the interlocking directorships between Apple and Google.

At the time not only Schmidt but also Arthur Levinson, formerly of Genentech, sat on both boards of the enormously powerful companies. Levinson remains on the board of Google at present.

A statement attributed by Apple to its chief executive 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, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest. Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple’s board.”

Google dominates the search and search advertising markets around the world, while Apple is one of the most profitable companies in the computer and cellphone field.

But Schmidt’s departure has been prompted by the growing conflicts between the two companies’ product portfolios of mobile phone and computing operating systems, and web browsers — and by questions about whether the head of one of the most powerful companies in the world should have such close association with a company many might see as a potential rival.

Suspicions of favouritism had been raised because every default Google search made through Apple’s Safari web browser brings in a small payment to Apple from Google. (A similar deal with the non-profit Mozilla foundation generates revenues from Google for searches made with the Firefox browser.)

Schmidt, who was recruited to Google in 2001 by its founders, Larry Page and Sergey Brin, was a non-executive director with Apple. When he joined Apple’s board in 2006, Jobs was quoted as saying: “Eric is obviously doing a terrific job as CEO of Google, and we look forward to his contributions as a member of Apple’s board of directors … like Apple, Google is very focused on innovation and we think Eric’s insights and experience will be very valuable in helping to guide Apple in the years ahead.”

Schmidt’s role had come under scrutiny — and he had admitted that he would “have to examine” it — last month following Google’s announcement that it would launch its own operating system, called ChromeOS, to power laptop computers.

That meant Apple and Google would be competing not only for the provision of cellphone operating systems — through the Apple iPhone’s OS X and Google’s Android — but also on standard computers, through Apple’s Mac OS X and Google’s ChromeOS, and for browsers, where Apple’s Safari is available for the Windows and Apple platforms — as is Google’s Chrome browser.

At the time, Schmidt told reporters: “I’ll talk to the Apple people … at the moment, there’s no issue.”

In May, Schmidt said that he had not considered resigning over the potential conflicts, just after the revelation of the antitrust investigation.

It is not clear whether that investigation will continue now that he has stood down. – guardian.co.uk