- The Washington Times - Tuesday, August 4, 2009

SAN FRANCISCO | Google Inc. Chief Executive Eric Schmidt has resigned from Apple Inc.’s board because of the companies’ conflicting interests as competition between the one-time allies heats up.

The split announced Monday comes just a few weeks after Google unveiled plans for a personal-computer operating system that could siphon sales from Apple’s Mac line and just a few days after the Federal Communications Commission contacted the companies about Apple’s decision to block a Google application from its popular iPhones.

Regulators from the Federal Trade Commission already had been looking into whether Mr. Schmidt’s dual role on the boards of Google and Apple would make it easier for the technology trailblazers to collude in ways that would diminish competition.

Thorny questions about corporate governance could remain, even though Apple and Mr. Schmidt mutually agreed to sever their ties. That’s because another Google director, Genentech Inc. Chairman Arthur Levinson, remains on Apple’s board.

Mr. Schmidt, 54, repeatedly has assured reporters that his involvement with the two companies wasn’t a problem, because he recused himself from Apple’s board discussion about the iPhone, which competes with mobile phones equipped with an operating system made by Google. He remained confident he would be able to stay on Apple’s board even after Google last month set out to develop a separate operating system for inexpensive, portable computers, potentially competing with Apple’s Macs.

In a statement Monday, Apple CEO Steve Jobs indicated Google’s operating system — due out next year — made him and Mr. Schmidt realize a change had to be made.

Shares in Mountain View, Calif.-based Google shares gained $9.12, or 2.1 percent, to close Monday at $452.17, while Apple shares increased $3.04, or 1.9 percent, to close at $166.43.



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