Updated: Google’s Schmidt On Chrome, Android: “They May Merge Even Closer”

. Google’s entry into the operating system market with Chrome OS should have obvious, broad impact not only on Google itself but also on its established relationships with other companies. At the Allen & Co. Media Conference Thursday, CEO Eric Schmidt (pictured left, with Bill Gates), along with Google co-founders Sergey Brin and Larry Page, fielded questions on some of the implications of Google’s new initiative. Highlights (via the WSJ):

—Competition? What competition? The new operating system will increase the size of the netbook market, not necessarily cut into Microsoft’s (increasing) share of that business, the executives said. They also invited Microsoft to put its own browser on Chrome OS, although they acknowledged it was unlikely that Microsoft would do that.

—What happens with Android One question is how much Chrome OS will overlap with the company’s existing Android operating system, which was already expected to be put on some netbooks. “There’s a great deal of commonality,” Schmidt said. “Eventually they may merge even closer.” Updated: On Friday, Google VP Andy Rubinclarified, however, that the Chrome OS isn’t going to replace Android on phones. “You need different technology for different solutions,” he said.

—Schmidt’s role on the Apple board The FTC is investigating whether Google and Apple are violating antitrust laws because the companies compete and also share two directors, including Schmidt. Schmidt already recuses himself from discussions on the iPhone, which competes with Google’s Android phone operating system. He said Thursday he would talk with Apple about what to do about his position on the Apple board, considering their future competition in computer operating systems. “There is no change at the moment,” he said. Schmidt did not suggest that he was thinking of stepping down.

Via Moconews