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He's not leaving Google, or at least there's no indication that's the case. They're just refocusing on their strengths. Also, why on Earth would Jobs want that? That'd be like grooming Gates to take over for him when Scully fired him.

Jobs will find a product guy to take over, and that's not Schmidt.

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Schmidt was previously an Apple board member and had to resign due to conflict of interest but he is capable of restoring stockholder confidence once Steve Jobs steps down. He would still have to resign from Google if he took the position (which his current statement doesn't support) but I don't expect an equally capable product guy to replace Steve. Schmidt could also help facilitate strategic relationships between the two companies again.

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