It's the platform, stupid!
Microsoft was convicted for bundling IE with their platform, essentially using it as a tactic to squeeze out competitors on said platform.
I think Schmidt is making a dangerously wrong argument about Google as a platform. Unlike Microsoft, Google has not offering a platform on which other search engines compete. Then creating their own search engine offering, bundled it with the platform and squeezing other search engines off the platform. Instead, the browser is the platform that Google, as a product, sits on top of.
Comparibly it would be like Microsoft having to offer not a choice of browser, but a choice to install Linux, Unix, OSX or Other OS when you first boot into Windows. Much as I'd like to see that choice and think it would be beneficial to society - it's technically not what the anti-trust case was about.
As one other commentard has stated already, I don't want to search for results on google, only to be taken to another limited search engine rather than what I was after.
With regard to Google's other services that it does offer in competing search results, it's not as though their rivals are investing development time on a specific app that sits on top of Google's platform that people can choose to install at will. It's an independent and free listing service where they have used an algorythm to determine what results they deem useful. As part of this service they display their own offerings.
Has Google anywhere published an algorythm that allows someone to install their search result into their search platform - that users can choose at will?
No-one complains that Tesco put it's own brand on the same shelf as other brands or that their brand is slightly higher or lower on the shelf than the competing brand. I don't hear calls for Tesco to offer Sainsburys own brands either. Neither are Tesco obliged to put my own home-made product on their shelves.
I may even find when I enquire about where to find canned food, that a Tesco employee advises me to go with their brand because it's cheaper - someone call the police!
Even if you believe Google should be treating their search results as a kind of entitlement list for number 1 spot, I think the demise of Buzz and Wave is proof that they are competing fairly in search results and have been beaten by rivals' better offerings.