But he admits his excitement is a relatively recent phenomenon, having spent his first six years as Googles CEO trying to convince company co-founders Larry Page and Sergey Brin that developing an operating system to compete against Microsoft Corp.s dominant Windows franchise would be a terrible idea.
Schmidt didnt think the timing was right and, worse, he didnt want Google to get into a potentially bruising battle with the worlds largest software maker. His change of heart shows how far Google has come since Page and Brin started the Mountain View, Calif.-based company in a Silicon Valley garage nearly 11 years ago.
Schmidt now believes Google can withstand whatever counter punches Microsoft might throw as the company sets out to make computers cheaper to buy and more enjoyable to use with an operating system tied to Googles 9-month-old browser, Chrome.
“They are game changers,” Schmidt during a 75-minute interview Thursday with a group of reporters at an exclusive media conference in the Idaho mountains.
The operating system, due out in the second half of 2010, threatens to chip away at Microsofts market share in the low end of the PC market – the less expensive and less powerful laptops known as “netbooks” which are becoming increasingly popular among consumers primarily interested in surfing the Web.
Both Schmidt and Page, who accompanied the CEO during the interview, sought to downplay Googles showdown with Microsoft. Its also something Microsoft Chairman Bill Gates didnt want to discuss when he was approached at the same conference by The Associated Press earlier Thursday.
But Page couldnt resist taking some veiled shots at Windows. Without mentioning Windows, he suggested Microsofts operating system is becoming archaic as people spend more and more of their computer time in a Web browser.
“The way we are think about it is if you are living your life online, maybe you dont want everything (on computers) that came from Erics generation,” Page, 36, said as he smiled at the 54-year-old Schmidt.
Page said he will consider the operating system a resounding success if people dont realize whats controlling their computers.
“You want the computer to get out of the way and just let you get your work done,” he said.
Most industry observers believe it will take years before the Chrome operating system develops into a serious challenger to Microsofts Windows, which runs on more than 1 billion PCs, according to Collins Stewart analyst Sandeep Aggarwal.
But the Chrome operating system also could put Google into direct competition with Apple Inc., a computer maker whose board of directors includes Schmidt and another Google director, Arthur Levinson. The Federal Trade Commission already is taking a look at whether Schmidts and Levinsons overlapping with Google and Apple threaten to diminish competition.
Some computer makers already are considering using Android as an operating system in netbooks, but both Page and Schmidt said they think Android is better suited for handheld devices. They also think elements of the Android and Chrome systems could eventually merge.
Schmidt and Page did discuss other topics besides Chrome, including the rapidly growing online messaging service Twitter Inc. and Facebook Inc., the leading online hangout for socializing.
As long as the Internet market is still expanding, Schmidt said he doesnt view either as serious threats now because Googles internal studies show those who sign up for Twitter and Facebook tend to use the companys search engine even more. He also said Google has held discussions with Twitter on a lot of different issues, including getting better access to Twitters posts so they will show up more quickly in Googles search results.
But the Chrome operating system dominated the interview, which has become an annual rite for Schmidt at a conference where most of the top executives in attendance try to elude reporters.
Although Google wont charge for the Chrome operating system, Schmidt said it could easily pay off by driving down the cost of computers so people can afford to buy more machines and surf the Web more often. Google wants people to spend more time online because it is the biggest seller of Internet ads – the main source of its more than $20 billion in annual revenue.