Microsoft may be jabbing at Google's soft underbelly by attacking its book project, but Google has thrown a punch in the form of a hint that it may be aligning more closely with Apple.

"I will tell you that Google and Apple are doing more and more things together through the normal course of communications ... We have similar goals and similar competitors", Google CEO Eric Schmidt said in response to questions at a technology conference in San Francisco.

He was being asked at the time about a possible collaboration on a tablet-style computer, which Apple is rumoured to be developing.

He also indicated that web-based software services are the way forward for the company, which has traditionally relied on advertising for its core business.

Schmidt is part of Apple's board of directors, and has been since August 2006.

It is not known yet in what form a collaboration may result.