[DM-MUG] Forbes-Goopple? Apple & Gogle . . .

[BONISTEWA at aol.com]

Goopple?
Rachel Rosmarin, 09.18.06, 5:55 PM ET

Burlingame, Calif. -
 No one does a better job of getting the tech and business press chattering 
than Apple Computer 
boss Steve Jobs, who revels in putting on highly anticipated, carefully 
choreographed performances where he hypes new products.
But some of the loudest buzzing at Apple's Sept. 12 event, where Apple 
unveiled its new home 
video strategy, started up before Jobs ever took the stage: A throng of 
reporters waiting to get into the San Francisco theater Apple had rented for the 
day saw Marrisa Mayer, Google's 
mediagenic vice president of search products, wander into the event.
That was it. Mayer didn't say a word to the press, and she didn't appear on 
stage with Jobs. But Mayer's appearance at an Apple event would be big news 
under normal circumstances: She is one of Google's highest-profile executives, 
and doesn't need to travel from the company's Mountain View headquarters to get 
an update on new iPods.
And since Google Chief Executive Eric Schmidt had joined Apple’s board of 
directors two weeks earlier, it was easy enough for bored reporters to speculate 
about what the two companies might be up to. Google and Apple aren't complete 
strangers: Prior to Schmidt's move, the two already shared Genentech Chief 
Executive Arthur Levinson as a board member, and Google is already the default 
search engine on Apple’s Safari browser. But what new deals, products and 
services could the two tech giants be talking about?
Conversations have already begun, according to Newsweek, which reported this 
week that Google and Apple are discussing some sort of video deal. Google's 
current video offering consists of some copyrighted material from outlets such 
as CBS and a host of "user-generated" clips, while Apple sells music videos, 
television shows and now movies via its iTunes store. Next year the company will 
begin selling its "iTV" box designed to port content from PCs to television 
screens.
Apple representatives didn't respond to requests for comment, while Google 
issued a non-statement statement: "We have a great relationship with Apple and 
are always excited to see innovation in this field but have nothing to announce 
at this time."
It makes sense for Google to want to find additional outlets for its video 
clips, and it's hard to see the downside for Apple in expanding its iTunes store 
to include the kind of quirky, viral stuff that flourishes on Google and 
other video sites like YouTube. The obvious connections end there, though: Apple 
is headed for consumers' living rooms, where it is betting they will pay up to 
get high-quality television and films beamed directly from the Internet to 
their TV. And it's hard to see much demand for grainy home-brewed video projected 
on expensive flat screens.
Yet Google-Apple corporate inbreeding could spawn other profitable ventures. 
One much-discussed outcome is the plumping of Apple’s iTunes store revenue 
with an advertising deal powered by Google’s vast ad inventory.
While the music and video store is a success, its revenue was down 6% in the 
company’s third quarter to $457 million. And a new study from Jupiter Research 
suggests the store isn’t necessarily the happy home of every iPod owner--83% 
of iPod owners in Europe do not buy digital music regularly, according to the 
report. On an average iPod, only 5% of music comes from legal online 
purchases.
Nonetheless, the iTunes store represents prime online advertising space, says 
analyst Michael Gartenberg. "It wouldn’t surprise me if Google wanted to get 
into that--and Apple may want to monetize that traffic flow beyond just the 
sales of songs. I suspect these two companies are in talks on many different 
levels."
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