Apple and Google - The Darlings of the Silicon Valley: An examination of clusters and interlocks in network maps
This post examines recent news regarding Apple and Google and applies network maps to the following question: What is the relational capital effect of the recent appointment of Google CEO Eric Schmidt to the board of Apple? Below is the LinkSViewer Relational Map of Apple and Google which includes board and management team members, investors, and companies in common (strong ties). Click on the Map to enlarge this map in a separate window and display the map title, filter information, and legend.
Relational Map - Map 1 (Click on to view full size)
Map 1: Strong Tie Relationships between Apple and Google. This Relational Map includes Person, Investor, and Company nodes, but only active companies, and only the current Person relationships. A filter has been placed that eliminates the weakest ties.
Initial Observation: Eric Schmidt links Apple to Google, but so does Al Gore, Arthur Levinson, and Sequoia Capital.
Discussion: We can see that the appointment of Eric Schmidt forms a different relationship because he is a Management Team (for Google) / Board link (for Apple). Arthur Levinson (Genentech CEO) sits on the board of both companies. Al Gore sits on the board of Apple and is a Board Observer on Google. Moreover, the co-investment relation of Sequoia Capital strengthens the link between these companies because of the history involved in helping grow each company at earlier stages. Notice that Kleiner, Perkins, Caufield, & Byers forms a company cluster at the bottom of the above map as an investor in Google. What other company linkages can be gleaned from the relations between Apple and Google?
Public Company Map - Map 2 (Click on to view full size)
Map 2: Public Company Clusters of Apple and Google. The Company Map shows common affiliations between companies: Yellow links = at least two common investors; Orange links = at least one investor and one board member in common. This map is filtered to include only the active public companies in the network.
Map 3: Private Company Ties for Apple and Google. Another Company Map, this one shows the links between companies only the private companies in the network: Yellow links = at least two common investors; Orange links = at least one investor and one board member in common. Apple and Google remain even though they are public because they are the target nodes (this is their network).
Initial Observations: Google has 27 public company ties, while Apple only has 6 (relatively unequal). As before, the structure of these ties differ, but because of the size of the related company network of Google, one can see the benefit of having the CEO of Google on Apple’s board.
Discussion: The vastness of Google’s private company relations network opens up potential connections to at least 26 private companies in the valley for Apple. This could be useful in forming future partnerships, potential acquisitions, or subcontracting. Google has the connections to more up-and-coming Internet companies, and it seems that Apple can gain from such entrée. Some specific company clusters that Apple could access through Google’s connections (companies followed by common connections):
Google Cluster 1: Stoke, ConSentry Networks, PeakStream, PodShow, Dash Navigation, and Digital Chocolate (via Sequoia & Kleiner)
Google Cluster 2: Friendster and eLance (via Ram Shriram, Kleiner)
Google Cluster 3: Friendster, Zazzle, Tellme Networks, Ion America, Spatial Photonics, and Good Technology (via Kleiner, John Doerr)
Google Cluster 4: Vendio, Yodlee (via Kleiner & Angel Investors).
Conclusion: By examining select network maps of Apple and Google, we uncovered information on how they can leverage each other’s relational capital - this can occur via board members, companies, and investors. Of particular note are the existing board of director interlocks of Eric Schmidt, Arthur Levinson, and Al Gore, the gatekeeping roles of Sequoia and Kleiner, and the specification of private and public company clusters that foster company partnerships, especially Apple’s potential benefit in leveraging Google’s ties to up-and-coming private companies.