By Maggie Shiels

Technology reporter, BBC News, Silicon Valley

Google said it is in "discussion" with the FTC Google CEO Eric Schmidt says he will not resign his Apple board position despite a government inquiry. The Federal Trade Commission is looking at a possible breach of antitrust laws given Mr Schmidt's directorships at Google and Apple. Both companies have competing browsers and phone operating systems, leading to possible conflicts of interest. But Mr Schmidt told reporters: "If there are issues on competitiveness, I recuse myself." He also said that it is well established that he leaves the boardroom whenever the discussion has anything to do with the iPhone. When asked if he had considered resigning given the recent FTC interest, Mr Schmidt replied "it hasn't crossed my mind." "Antitrust devil" Mr Schmidt's comments to news organisations, including the BBC, came ahead of his address to shareholders at the company's headquarters in Mountain View, California. During that briefing he also said he did not think the fact that Google and Apple share directors was a problem. The role of Arthur Levinson, a former chief executive of Genentech, who is also on both boards is part of the FTC investigation. "From my perspective I don't think Google sees Apple as a primary competitor," said Mr Schmidt. Google's legal team also told journalists that it did not see any conflict of interest. "The law is clear that there is a safe harbour under the Clayton Act for companies that don't have overlapping revenue in different areas, and we're comfortable with that position," said the search giant's legal counsel Kent Walker One shareholder attending the annual meeting did not seem to agree. Speaking on behalf of the federation of labour organisations known as the AFL-CIO, Brandon Rees challenged Mr Schmidt to resign from Apple's board to avoid further government investigation. "There is nothing to gain and a lot to lose. We don't want Google to become an antitrust devil like Microsoft did," said Mr Reese. Mr Schmidt said he did not want to comment on any discussions or "rumours of an investigation" and that his presence on both boards was "both legal and proper." "Killer app" Turning to the health of Google, Mr Schmidt told shareholders that despite the economic downturn, this was a good time to invest in innovation. SearchWiki is one of the 350 improvements made in the last year In the first quarter of 2009, the company posted its first revenue decline in consecutive quarters since going public nearly five years ago. "Companies that invest in innovation in the downturn emerge stronger than their cost-cutting competitor. "The success of Google will ultimately be determined on our rate of innovation," said Mr Schmidt. One major area of investment and growth for the company remains search. Mr Schmidt said it is "still the killer app" especially on mobile phones were "more people are accessing the web through their thumbs." Recent figures show that Google accounted for 63.7% of all US searches and 97.5% of mobile phone searches. "Information is what we do. Doing it right and doing the world's perfect search engine remains very very difficult," said Mr Schmidt To that end he underlined that Google had made 350 improvements in search in the last year alone. Marissa Mayer who is the vice president of search products told shareholders "we are making the reinvestment in terms of improving search. "We have all kinds of different ways we use our large market share to our advantage to make our service even better. "Google today is better than yesterday and Google tomorrow will be even better. "There are actually changes going on this afternoon like there are almost every day," said Ms Mayer.



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