While Schmidt was wary of commenting directly on Microsoft's reorganization, announced Thursday, he said the changes reflect and industry-wide shift.
"Every company is responding to the new architecture of cloud computing. We're having great success with Google apps and docs in enterprise and Microsoft must be responding to that in some way," Schmidt said.
(Read More: Microsoft Shake-Up: Will Investors Win?)
As to rising competition from Facebook, Yahoo and Twitter, as they improve their ad options, Schmidt said: "The funny thing about advertising is that it's not a zero-sum game. ... Historically, in the digital ad world, pie has gotten larger and it's possible for everyone to win, and it's perfectly possible that will continue to be true for quite some time."
Schmidt was eager to vent his frustrations about the immigration bill stalling on Capitol Hill. "The policy of America to deny visas to technically trained people in the U.S. and shipped to other countries, where they create companies that compete with America, has to be the stupidest policy of all the U.S. government policies," Schmidt said. "It's being held hostage by all these other issues."
(Read More: Why Silicon Valley Wants Immigration Reform)
The other topic Schmidt vented about was the National Security Agency's Prism controversy.
"We were upset because there was a statement made that somehow the NSA had special access inside Google, which was false," Schmidt said. "We clearly stated that's not the case."
"We've also been upset as a company that we're not allowed to talk in details about the nature of such requests [because of the Patriot Act]," he said. "If allowed to do that, people would have a much better understanding if that's appropriate or not."