Google's Schmidt undaunted by Apple or Facebook

SUN VALLEY, Idaho (Reuters) - Google Inc Chief Executive Eric Schmidt rejected any notion that Apple Inc or Facebook presented a threat to the web search leader's business.

Most people "assume that these are zero-sum games, which are battles to the death," said Schmidt, who spoke with reporters in a one-hour briefing on Thursday at Sun Valley alongside Google co-founders Larry Page and Sergey Brin.

"The indications that we have show that when Internet users become Facebook users they actually do significantly more searches on Google," Brin noted.

The executives declined to confirm media reports that Google is developing a new service called Google Me to compete with Facebook, which has grown to nearly 500 million users in its six-year history.

The trio addressed a variety of issues that have weighed on Google during a tumultuous year in which the company has emerged from the recession to face a shifting competitive landscape, increasing regulatory scrutiny, and major changes to its strategy in China.

Schmidt and Google's two co-founders spoke to the reporters on the third day of the Allen & Co conference, the annual confab of media and technology executives at the scenic Sun Valley resort. Apple chief executive Steve Jobs was also invited, although he did not attend the event.

The relationship between Apple and Google, two one-time allies, has become increasingly tense as the companies face-off in markets such as smartphones and mobile advertising. Last year, Schmidt stepped down from Apple's board of directors because of the overlap between the two companies businesses.

Apple's Jobs recently told a conference that Google was responsible for the change in the relationship between the two companies because Google elected to compete with Apple's iPhone by developing the Android smartphone software.

On Thursday, Google's Page suggested that Jobs' assessment was "a little bit of rewriting history."

"We had been working on Android a very long time, with the notion of producing phones that are Internet enabled and have good browsers and all that because that did not exist in the marketplace," Page said. "I think that characterization of us entering after is not really reasonable."

But Schmidt noted that Google and Apple still have important partnerships in various businesses, and stressed that the market was big enough for both Google's Android and Apple's iPhone to be successful.

Google, which generated nearly $24 billion in revenue last year, reports second-quarter results on July 15.

While Schmidt did not provide any details on the company's recent business trends, he offered a cautious outlook for the broader economy, noting that both the U.S. and Europe will have a "relatively long recovery, with ups and downs."

Google said its forthcoming Chrome PC operating system was on track for release later this year. While the initial focus of the Chrome software is for netbook PCs, Schmidt said he expects there would also be tablet PCs based on Chrome OS, something that could help Google compete with Apple's popular iPad.

(Editing by Anshuman Daga)