Google CEO Schmidt leaves Apple board

Eric Schmidt resigned from Apple's board Monday.

NEW YORK (CNNMoney.com) -- Google Chief Executive Eric Schmidt resigned from Apple's board of directors Monday, citing conflicts of interest.

Apple (AAPL, Fortune 500) said in a statement that the company and Schmidt reached a mutual decision to split ties as Google (GOOG, Fortune 500) enters new markets that directly compete with Apple's iPhone and Mac operating systems.

"I have very much enjoyed my time on the Apple Board; it's a fantastic company," said Schmidt in a statement. "But as Apple explained today we've agreed it makes sense for me to step down now."

Schmidt has been with Google since 2001 and on Apple's board since August 2006.

Shares of Google rose 1.9%, while Apple's stock gained 1.6%.

Rising conflicts. "Eric has been an excellent board member for Apple, investing his valuable time, talent, passion and wisdom to help make Apple successful," said Apple CEO Steve Jobs in a statement. "Unfortunately, as Google enters more of Apple's core businesses, with Android and now Chrome OS, Eric's effectiveness as an Apple board member will be significantly diminished."

Schmidt had recused himself of portions of Apple's board meetings when conflicts of interest or anything Google-related arose. But Jobs said Schmidt would have to leave much larger portions of the meetings after Google announced last month that it would enter the operating system sphere.

"This about more than just than Chrome, it's about the future direction of both companies," said N. Venkatranam, head of the IT group at the BU School of Management. "There will be many more areas of overlap than where they operate now, and if that has anything to do with what Google is thinking, Schmidt would have to recuse himself."

For instance, Venkatranam said that the rumored Apple tablet computer may, some day, compete with Google Books.

In May, the U.S. Department of Justice opened an inquiry into the two companies' "interlocking directorates" under the Clayton Antitrust Act.