While Google does not directly gain revenue from Android (which is free and open source), the more successful the operating system is, the more people are connected to the Web from their mobile phones, leading to an increase in search.
"Trust me that revenue is large enough to pay for all of Android's activities and a whole bunch more," Schmidt added, via Cnet. "I should also say that we love the success of the iPhone because the iPhone also uses Google's search and we get a chunk of that revenue when people search on the iPhone."
Schmidt was also asked about the upcoming Chrome OS to which he responded: "Maybe we can get the same success out of Chrome OS (as Android). Chrome OS is targeted at a different part of the market."
The first Chrome OS netbooks will hit in November.