Is a Google-Apple partnership on? Good question. And it’s a question that’s risen to the surface recently by way of Forbes no less. Assuming there is a deal, is it ethical?
“Imagine that Company A wanted to have a business relationship with Company B, and that it took the step of having the chief executive of Company B come onto its board. Imagine further that the CEO of Company A sits on the board of a third company, and now all three companies have interlocking boards.”
“And understanding [the ‘third mans’] agenda might just be the angry thump that straightens this picture.
‘CUPERTINO, California – August 29, 2006 – Apple® today announced that Dr. Eric Schmidt, chief executive officer of Google, was elected to Apple’s board of directors at their meeting today. Eric also sits on Google’s board of directors and Princeton University’s board of trustees.’
Did you really think I was going to let that one pass?
Now, when this news broke, enough was said for me to keep quiet, the reason for that being that anything could have been true. But with these recent rumours coming to the fore, even if a deal between Google and YouTube isn’t in the offing, then where did the rumour come from?
I see it like this: Apple begin to talk up the roll-out of a beefed-up video service. Meanwhile, a senior Googler joins the Apple board. Fast forward 30-odd days and a rumour surfaces detailing a possible buy-out of a nascent player in the on-line video market.”
“But what of the third man Apple? Where do they fit into all of this, if indeed they do?
While it’s clear Apple aren’t going to be any direct or at least immediate financial beneficiary of this recent transaction, thinking ahead, YouTube was either going to go legitimate, or go bust. Or, get bought out by someone other than Google (ehem, Microsoft) and be made legitimate by fair means or foul.
However, I’d like to think that with Apple and Google being a little closer these days, some arrangement with regards to video content might not be within the realms of fantasy. After all, both Apple and Google have deals with the major labels, so such arrangements might be seen as being organic to their respective deals.”
Is this a scoop? I’d like the think so, or maybe this was inevitable? Given that there may well be some ethical issues at hand, maybe might not be good enough:
“Aren’t all directors supposed to be truly independent? The new standard that seems to be evolving is that directors sitting on a board together should have no other entanglements, real or perceived. After all, they’re supposed to be loyal only to shareholders of the company on whose board they sit.”
Indeed, it appears that both Apple and Google while walking a fine line may well sit within what is considered to be reasonable corporate governance:
“That’s one of the central tenets of the whole governance movement, and the boys in California are testing it. If they create a powerful alliance that gives Microsoft a run for its money and they create billions of dollars of shareholder value in the process, who’s to say that they’re doing something wrong? Should they really be on the receiving end of class action lawsuits? In this case, it may be true that having directors who are really smart and deeply connected may make more sense than adhering to the strictest notions of independence. The jury is still out on this one, of course, but smart business may very well trump good governance.”
But only just…