Wednesday, June 8, 2011

Greedy Cupertino Government?

Yesterday, Steve Jobs made a surprise appearance before the Cupertino City Council to present his vision of the new Apple campus to be built on the land that used to belong to HP.

Today, a friend of mine asked if anyone was put off by the Cupertino City Council members because they seemed greedy by asking Steve Jobs for favors.

At first, I just attributed the city council member's question to the fact that they were amateur politicians. There are several different models that city governments follow. Here, in Carlsbad, CA, the mayor is part of the city council (the chairman of the board, so to speak) and draws a base salary of about $18,000. After adding in payments for meetings attended, he or she ends up earning around $23,000/year for being the mayor of Carlsbad. The main responsibility for the day to day operations falls on the city manager, who you can think of as the CEO. The current Carlsbad city manager earns around $220,000/year.

My point is that the city council is usually a side job for many municipal governments making the members "part time" politicians.

At yesterday's city council meeting, one of the members asked if it would be possible for Apple to outfit the city of Cupertino with WiFi. Unfortunately, the city council had no bargaining position. Steve Jobs responded by pointing out that citywide WiFi is the responsibility of the city – that's the reason Apple pays taxes to Cupertino.

This question didn't quite come from left field. It was preceded by a question about how the citizens of Cupertino would benefit from the new Apple campus. But, was this really just a star struck, impromptu request for a favor from the council member? Probably not. There was also a subtle message in this question. Apple's friend and competitor, Google, is known for being a very giving company. From time to time, they have worked with organizations, such as airports, to set up free WiFi.

By asking this question, the city council member was really saying, "Hey, did you see that Google is bringing their next-generation Internet service to Kansas City, KS? Apple should do the same for Cupertino!" It would certainly look good for that council member, during her next campaign, to say that she was personally responsible for getting WiFi throughout Cupertino.

But, the key thing about Google is that they are, first and for most, an advertising company. They've learned how to put tasteful ads in search results, personal websites, e-mail, etc. They understand the advertising industry like no other high tech company. Google's understanding of advertising is one of their core competencies that is a key part of their free WiFi, etc, strategies.

Until Apple runs into a hurdle that requires the city government to act, they'll probably receive no favors. Of course, it will probably never come to this. Jobs made it clear that Apple will stay in Cupertino as long as they're welcomed with open arms – otherwise, it's off to Mountain View.

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