Sun Valley: Gates and Schmidt Do Lunch But Don't Comment on Google OS
Microsoft Chairman Bill Gates and Google CEO Eric Schmidt had an awkward encounter this morning at the Sun Valley mogulfest this morning — and after Google detailed plans Tuesday to create software it hopes …
Context & Ripple Effects
Google put an operating system on the table Tuesday — a direct move into territory Microsoft has owned since the PC era — and by Thursday morning the two companies' most recognizable figures were sharing lunch at Allen & Co.'s Sun Valley conference, saying nothing about it on the record. The awkwardness is the latest beat in a rivalry that has been escalating publicly for years: Gates was already welcoming Google as a competitor back in 2005, the New York Times framed a full 'rumble' between the two in late 2007, and through 2008 the executives' exchanges turned openly combative, from Schmidt's practiced stonewalling in March to openly traded jabs that November.
What makes this encounter newsworthy rather than social gossip is timing: the first face-to-face between Gates and Schmidt after Google's OS reveal, at an event built for private dealmaking, produced zero comment from either side. Silence, in a rivalry this well documented, becomes its own data point.
First-order effects
- Microsoft gets no public read on how seriously Google's operating-system push threatens Windows — neither Gates nor Schmidt would discuss it, leaving Microsoft's response unarticulated while the OS story runs.
- Google's announcement now owns the news cycle unchallenged; with the Microsoft chairman declining to engage, there is no counter-framing from Redmond to compete with it.
Second-order effects
- Pressure mounts on Microsoft to produce a concrete answer at the low-cost, browser-centric end of the market Google's OS targets — the segment where netbooks have been squeezing Windows economics.
- Every future Gates-Schmidt sighting, starting with this Sun Valley lunch, gets re-read as a signal about the OS fight, raising the stakes of what either executive says or refuses to say in semi-public.
Third-order effects
- If the rivalry keeps climbing the stack from search and applications into the operating-system layer, executive body language at gatherings like Sun Valley hardens into a standing spectator sport — diplomacy theater where silence is parsed for strategy.
- A Google OS would make the desktop software business, long Microsoft's profit core, a contested market rather than a settled one, reshaping how PC makers and developers hedge between the two platforms.
The trend: The Google-Microsoft rivalry is migrating from web services into the operating-system layer, with each company's public posture — including pointed silence — becoming part of the competitive contest.