Eric Schmidt, the chief executive of Google, has joined the board of Apple, the dominant force in online music.

The move comes as Apple prepares to fight off an assault on the music market by Microsoft and characterises the increasingly complex network of relationships between competitors that is coming to define Silicon Valley.

While Google has surprised some analysts by resisting calls to sell music downloads, it has flagged an intention to compete in video – an area in which Apple’s online music store, iTunes, also operates.

However, signalling the prospect of greater co-operation between the two companies, Steve Jobs, the Apple CEO, said Mr Schmidt would play a key part in shaping the company’s future strategy.

"Like Apple, Google is very focused on innovation and we think Eric's insights and experience will be very valuable in helping to guide Apple in the years ahead," he said.

He added that Mr Schmidt would help to ensure products from Apple are brought to the market promptly. Earlier this month, Apple disappointed some aficionados by not releasing an updated iPod music player at its worldwide developers conference in San Fransisco.

Shares in Apple gained 1.7 per cent at $67.59 in morning deals in New York.

Mr Schmidt’s comes with a reputation for insight into the business of the web. Formerly chief technology officer at Sun Microsystems, he led the group’s web strategy in the mid 1990s.

In 2001 he joined Google from Novell at the behest of the search engine’s venture capital backers, and is subsequently thought to have become one of the first executives to become a billionaire from stock options in a company he did not create. Google's shares soared on its 2004 float, giving Mr Schmidt a net worth of nearly $5 billion according to Forbes magazine.

A deeper relationship with Mr Jobs, himself lauded as an industry visionary after the phenomenal success of the iPod, could mean a greater degree of interoperability between Apple and Google products, analysts said. Google, for example, has already developed a search tool that allows users to find songs and links them to sites including iTunes.

Further such tie-ups could form part of a grander strategy designed to curtail Microsoft’s expansion into new markets. Microsoft is set to launch Zune, an iPod rival, later this year.

The two groups already seem well matched in terms of culture, with both sharing a reputation for secrecy. Arthur Levinson, chairman and chief executive of Genentech, already sits on the boards of both Apple and Google.

However, Mr Schmidt will join Apple at a difficult period.

Having enjoyed stellar growth in recent years, the computer company is under investigation in the US for "irregularities" linked to the granting of stock options to executives. An internal probe has delayed the company’s latest quarterly results, leading Nasdaq, the stock market, to give warning the company faces a potential de-listing.

Earlier this week, it was forced to recall 1.8 million Sony-made computer batteries on safety fears and now has to answer to the Japanese trade department on the same issue.

The company, which has on its board Al Gore, the former US presidential candidate and environmental activist, was also recently attacked by Greenpeace for a poor polluting record.

The linking of potential competitors through commercial deals and other arrangements has been dubbed "co-opetition" in Silicon Valley.

Earlier this week, Google signed an advertising deal with eBay, the online auction house, to supply ads to its sites outside of the United States. EBay already holds an agreement with Yahoo!, a Google rival, to supply ads in the US.

The eBay-Google tie-up surprised some analysts who noted that eBay faces competition from Google in online payment services and internet telephony.

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