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04/15/2011 12:56 pm ET Updated Jun 15, 2011

Steve Jobs' Fallout With Google Described In New Book

Google and Apple have become frenemies, with the battle for smartphone supremacy between Android and the iPhone just one facet of the companies' opposition.

But Google and Apple used to be far cozier, according to Steven Levy's new book, In the Plex. Steve Jobs once had an especially intimate relationship with Google's co-founders Larry Page and Sergey Brin, who had once told investors that Jobs was the only CEO they would consider allowing to run the company. Brin and Jobs used to go on long walks around Palo Alto together, where they both lived, Levy writes. And ex-Google CEO Eric Schmidt sat on Apple's board of directors until 2009.

All that changed when it became clear that Google was developing a smartphone that would rival Apple's iPhone. To that point, Google and Apple had separate, but complementary trajectories that made their relationship not only tenable, but desirable. When Apple launched the iPhone, Google worked closely with Apple so that the phone would be retrofitted with optimized versions of both Google Maps and Youtube.

Jobs even called Schmidt onstage at the iPhone launch, where Schmidt joked that the two companies should join.

"If we merge the companies we can call it AppleGoo," said Schmidt according to In the Plex. "But we can merge without merging."

But it was soon evident that Google's phone would not simply be a competitor to Windows Mobile, as Jobs had thought, but a full-blown smartphone on par with the iPhone. Still, Schmidt joined Apple's board a full year after Google acquired Android, and he maintains that Jobs was well aware that Google had plans to develop the phone.

"I feel I fully disclosed it when I joined," Schmidt said. "It's not like it was a new discovery."

Schmidt began to excuse himself from board discussions about the iPhone, but especially after Google launched the Chrome browser--a Safari competitor--Jobs began to sense that he had been betrayed. Schmidt also notes that he had been "kept totally in the dark" about the iPad. After Jobs visited Google's headquarters to see their phone for himself, he blew up.

Levy describes Jobs' ire:

Jobs prided himself as a canny observer not only of business but also of human character, and he did not want to admit--especially to himself--that he had been betrayed by the two young men he had been attempting to mentor. He felt the trust between the two companies had been violated. After increasingly contentious phone calls, in the summer of 2008, Jobs ventured to Mountain View to see the Android phone and personally judge the extent of the violation. He was reportedly furious. Not only did he believe that Google had performed a bait and switch on him, replacing a noncompeting phone with one that was very much in the iPhone mode, but he also felt that Google had stolen Apple's intellectual property to do so, appropriating features for which Apple had current or pending patents.

When the first Google Phone arrived, it did so without the multitouch swipe features that Jobs was particularly protective of. "According to one insider, Jobs demanded that Google remove support of those gestures from Android phones," Levy writes. Google did so. In 2009, Apple denied Google Voice from becoming an iPhone app.

While Schmidt maintains, at least outwardly, goodwill towards Jobs (calling him "the best CEO, the most clever leader, that maybe we'll ever see" in In the Plex), Jobs' feelings towards Google are less kind.

"We did not enter the search business. They entered the phone business. Make no mistake they want to kill the iPhone. We won't let them," Jobs allegedly said during a meeting with Apple employees, at which he also reportedly called Google's "don't be evil" mantra "bulls--t."