Don Dodge on The Next Big Thing: Google CEO joins Apple board - is there more to this?

Strategic alliances, board seats, and press releases make for good stories, but business is driven by real customer demand for products and services. Years ago when I worked in business development we called these things "Barney Agreements". You know..."I love you, You love me, ..."

Nothing really happens unless money changes hands. Each company will do whatever is in their best interest. More specifically, each salesperson still has a quota and will do whatever it takes to make it happen. Most times strategic alliances only confuse the sales process or slow it down.

Even when strategic alliances turn into a merger it is still hard to find the synergies. Remember AOL and Time Warner? AOL was the dominant Internet company at the time, and Time Warner was the biggest content provider in the world. Television, movies, music, magazines...they had it all. AOL would be the perfect Internet channel for all this content. The synergies were limitless. Well, we all know how that turned out.

The best partnerships, and the best mergers, are customer driven, where customers demand and pay big bucks for products from two separate companies but want them to work together seamlessly. On the other hand, it rarely works when two companies decide to cooperate on something and then try to create customer demand for it.

Maybe I'm quibbling, but there's a world of difference between strategic alliances, board seats, and press releases. Putting somebody on your board isn't really a Barney deal. Schmidt will have legal responsibilities to Apple's shareholders, which means he'll have liability (above and beyond reputational damage) if things go wrong.

This isn't, of course, a formal agreement between Apple and Google, which is what makes the import of this news so difficult to pin down. But, clearly, when the board gets together to hear about Apple's strategy to leverage trends in social computing or ad-driven revenue models, everyone's going to turn to Schmidt for his opinion, and he'll have a special perspective to contribute.

That's why this deal is interesting, and that's why Don Dodge (and doubtless many of his fellow Microsoft employees) is spending part of his day reading these tea leaves, which is exactly what I meant when I said this would cause some sleeplessness near Seattle.