10:48 AM

3.6.07 Schmidt: Google working with Apple, no more YouTube-size deals

Eric Schmidt told an investors' conference that Google is working closely with Apple, noting that the two companies have "similar goals and similar competitors," Reuters' Eric Auchard reports. The two companies are doing "more and more things together," he said. The answer came in response to a question about a rumored Google phone that would compete with Apple's iPhone.

Schmidt joined Apple's board
in August '06.

Schmidt also said that it would be "highly unlikely" for Google cut any more billion-dollar deals like the one for YouTube. "It is not obvious to me where it would go," he said referring the pile of cash Google is accumulating - more than $11 billion.

Investors are anxious to see some diversification at Google. Virtually all of Google' revenue comes from advertising.

Schmidt said the newest meaningful contributor to revenue will be from the company selling subscriptions to business software delivered via the Web, its so-called "Google Apps" business.

"The next really big one is actually an extension of Google Apps," Schmidt said in speaking of major revenue contributors.

And finally, he dismissed rumors of a Yahoo-Microsoft merger.

"There are so many new areas ... where targeted advertising can be done. It does not strike me as the right time to be consolidating the whole market," he said, noting how the pace of innovation promises explosive change for years to come.