That's pretty interesting. Do you have a cite? Android (the company) was essentially designed as something to sell to Google. I wonder if the guys at Android bypassed Schmidt because they knew he'd be a tougher sell.
He said it during a press event in New York. There were ppl live blogging in the room but somehow nobody picked up that part of what he said, but I remember at least one person tweeting it.
He said it in passing, while talking about the Google mobile strategy (the summary of what he said was "we sort of fell into this business, nobody really understands it just yet (mobile ads) or how big the opportunity will be")
I agree Android was setting itself up for an acquisition, same as what happen with Danger. They were probably aiming for a carrier or large non-Apple manufacturer.
So there was press, lots of live-blogging witnesses, and what would be an incredibly interesting statement by Eric Schmidt, and you can't find any record of it?
I'm sorry, but the most likely theory in this case seems to me to be that you're misremembering things, than somehow a whole room of other people were simultaneously rendered incapable of recording or publishing a very interesting quote from Eric.
