Update: He's claimed his actual name, which boasts a "verified account" tag from Twitter. The tweets from the previous account have been moved over as well. [Twitter via TechCrunch]

"I've learned not to respond to quotes by Steve Ballmer. Hopefully we won't repeat the same mistakes that Microsoft did 10 years ago that ultimately led to all these things that have been happening with them."

Me-ow! Hit the link for video of the full interview, which is pretty interesting throughout. And not just for the catty comments about Microsoft. [Gigaom]

One day Larry and Sergey bought Android, and I didn't even notice. Think about the strategic opportunities that has created. Sergey found Google Earth one day while he was surfing on the Web. And then he walked into my office and told me he bought them. "And I said, "for how much," Sergey?" And it turned out to be a few million.

Think about it: Google goes around buying companies, and the CEO doesn't even know about it. Now carry that forward to its logical conclusion.

Man, who would've thought Fake Steve nailed it that hard? [Media Memo via Alley Insider]

Schmidt's presence the Apple board of directors has been conceptually weird from the start, but in the last year or so, he's been treading in dangerous territory. Many saw these concerns crystallize when the FTC invoked a century-old antitrust law that prohibits "interlocking directorates"—essentially, the sharing of leadership between two competing companies to investigate the companies after Google announced Chrome OS (an investigation which is still moving forward, despite Schmidt's exit). The NYT, discussing the issue in May:

Antitrust experts say that investigations of interlocking directorates rarely lead to major confrontations between companies and the government. Executives typically choose to resign from the board of a competitor if it poses a problem rather than face a lengthy investigation or a bruising legal fight.

The thing is, until just now, Eric Schmidt didn't step down, nor did he seriously talk about it. He didn't feel he had to, because of a disingenuous loophole:

Under the Clayton Act, interlocking directorates are not considered a problem if the revenue from products in which the companies compete is less than 2 percent of either company's sales.

Google's competing services are generally free, including Android and the upcoming Chrome OS, and therefore don't directly account for much—or depending on how stubbornly literal you want to be about it—any of the company's revenue. This should have be a clear cue to step the hell aside, but it wasn't taken that way. Schmidt was comfortable staying, and wasn't afraid to say so as early as last week.

In an interview printed in the Mercury News on Friday, Schmidt said "the board question can be solved by recusing yourself, which I do with the iPhone," hardly talking like a guy who was about to walk away. He was comfortable with this relationship; the regulatory bodies, the public and, most importantly, Apple, were not. It's hard to imagine Steve Jobs, or Apple's various board members, taking kindly to the consistent surprises they were getting from Google. As they saw it, the iPhone begot Android, Safari begot Chrome, and in a small way, OS X begot Chrome OS. Steve Jobs didn't waste any words in their press release on Schmidt's departure, and made these concerns pretty clear:

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.

Chrome OS was announced in May, and Android in November of 2007. To Jobs and Apple, Schmidt's overlapping interests were old news; to Schmidt, it's safe to assume they were ancient history.

The Google/Apple relationship has been steadily getting more awkward since people first started talking about it, and at a fast clip since Schmidt's been onboard. The relationship was unnecessarily strained as it was, but now Schmidt's company is giving Apple some serious headaches, all the while looking like the innocent party in a confusing PR nightmare that's drawn the wrath of the FCC. Granted, they deserve it, but having a Google CEO to step over only muddles the issues. It bears repeating: nothing good could've come from Schmidt staying. He'd either be accused of collusion, sabotage or both—his presence was a lose-lose proposition. He didn't seem to mind, but it looks like Apple finally did.

Drawing a thicker line between these corporate structures is good for everyone, no matter how this plays out. If Apple and Google turn into direct rivals, they need distinct management. If they want to continue working together, like they do on browsers, iPhone software, or some as-of-yet-unannounced project—Apple could sure as hell use Google's help with their cloud efforts, for example—they need the exact same thing.

That's not to say that Schmidt left over a tussle in the App Store, or even the FCC's recent investigation into Apple's handling of Google Voice apps, but these little shitstorms could've been a reminder that, as much as Apple and Google have worked together over the years, they are competitors in all kinds of markets, from online services to cellphones to browsers to, soon, OSes. On this, the brief press release doesn't mince words:

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, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest.

Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple's Board

It's hard to tell if this "mutual decision" was kind of thing where Schmidt just saw the big picture and said "Hey y'all, it's been real," or if the rest of the board told him to pack his bags, but either way, it seems like the inevitable is happening, and Google's entering its next stage of evolution as a tech compay, full of flamewars and fanboys, taunting blog posts and constant controversy. Pick your sides; this should be fun.

BusinessInsider posted the incriminating AP pic of the Silicon Valley exec on a busisness retreat out in Idaho. I mean, he didn't even try to hide the Blackberry logo.

I know Android isn't designed around enterprise, and that Schmidt is a big shot businessman and needs a Blackberry for RIM's push email, and scheduling, and collaborations, and synergizing with other execs. But this is FRIKKIN GOOGLE we're talking about. I'd sooner expect him carrying an iPhone—he is, after all, on the board.

You're telling me that the CEO can't get his code monkeys to create some custom Android software that connects to a special server and does everything a BlackBerry can? And it doesn't seem like a one night stand either—the ratty Google sticker on the back of the phone (presumably a Curve 8900) seems to indicate the thing gets some serious usage.

Could you imagine El Jobso (or Phil Schiller, for that matter), toting around an HTC Touch Pro 2? And I'll give you one guess what Roger McNamee and Jon Rubinstein are using (three letters...starts with P, ends with E). Tsk, tsk. Do better, Mr. Schmidt. [Business Insider via CNN via Engadget]

On the issue of net neutrality, the project, tellingly called "OpenEdge", seems to indicate an about-face on Google's part. According to an extant Google Help page, the company's official position is as follows:

In our view, the broadband carriers should not be permitted to use their market power to discriminate against competing applications or content. Just as telephone companies are not permitted to tell consumers who they can call or what they can say, broadband carriers should not be allowed to use their market power to control activity online.

This was posted around the time that Google was lending its considerable influence to fighting the S.2686 Telco bill, which threatened net neutrality. In a letter opposing the bill, Google CEO Eric Schmidt said:

Today the Internet is an information highway where anybody – no matter how large or small, how traditional or unconventional – has equal access. But the phone and cable monopolies, who control almost all Internet access, want the power to choose who gets access to high-speed lanes and whose content gets seen first and fastest. They want to build a two-tiered system and block the on-ramps for those who can't pay.

Pretty clear, right? Then how does Google justify installing ISPs to host their content at higher speeds than other content? While it is easy to see how faster Google and YouTube access might be appealing to Google and consumers, it's clear that the company would have to pay for such preferential treatment, a practice which runs directly counter to their previous stance.

A likely defense would be that, in the case of OpenEdge, ISPs wouldn't be throttling other traffic, just accelerating Google's traffic. That would be true, but not the point. The system wouldn't adversely affect existing services or threaten P2P traffic, but it would be creating a tiered internet, which—no matter how it's packaged—is the greatest fear of proponents of net neutrality. When pressed on the issue, the company simply indicated to the WSJ that "other companies such as Yahoo and Microsoft could strike similar deals if they desired." Coming never: fast-tracked Giz, courtesy of Comcast.

UPDATE:: Epicenter reports that Google responded to WSJ's article, calling it confused. They claim that their OpenEdge, which uses a technology called edge caching (already in use by Amazon), does not contradict their policy on net neutrality. Rather, they claim it only improves the end user experience by colocating a server to minimize the distance between their content and the user, thus speeding up the time it takes to load content. Google feels that ISPs and content providers working together to improve performance is not the same thing as ISPs only making content available for a select audience. [WSJ]

While Schmidt says the Goog is officially neutral, the WSJ notes that "Congress is considering measures that could have an adverse impact on Google's business" like "rules that would allow telecommunications companies to charge different prices for different levels of Internet service," i.e., net non-neutrality. Obama has said that he is pro net-neutrality, which would benefit Google. Perhaps not-so-surprisingly, Google employees have donated nearly half a million dollars to Obama's campaign, and a mere $20,600 to John McCain as of Aug. 31, according to the Journal (which would likely make them among Obama's top corporate donors, since Verizon employees' $155,000 for McCain placed among his top 20 corporate donors ever).

Tuesday is the first day Obama and Schmidt hit the trail together, but some speculate he's been doing some campaigning of his own with Obama for a while—to be Obama's first tech chief:

Asked at a speech this month whether he would consider entering the political arena, the 53-year-old Mr. Schmidt shouted, "H-, no!" But some tech and media executives speculate that he might desire a role in an Obama administration, possibly the chief technology officer post Sen. Obama has said he would create.

I have to say, there are few more qualified than Google's CEO, especially since Bill Gates dreams beyond tech now, and Steve Jobs is perfectly happy within his own little world at Apple. Who would be your dream tech chief be? [WSJ via Valleywag, Image: Real Dan Lyons]

Eric Schmidt on YouTube showing off his iPhone [Scobleizer]

Apple and Google Working on More "New Things" [Loop Rumors]