Google is organized under the principle that we don't know which is the killer app, but we're more likely to be the inventors of it . . . because we have so many initiatives around it.
Susie Wee, director of the HP Labs Mobile and Media Systems Lab, responded to Schmidt's remark with this thought:
Google may invent a killer app with all their initiatives, but, they should also be prepared to provide a platform that allows others to create new killer apps. Yes, there's a lot of innovation going on inside of Google, but there's also a lot of innovation going on outside of Google.
(During the interview, Schmidt seems to describe the reality as the Internet itself being the killer platform, with Google being just part of that.)
It's clear that if Google won't create a platform or ecosystem around its vision and technologies, other big companies are willing to do just that. Xerox has turned up the heat on its efforts at its Palo Alto Research Center (PARC), and its CEO Anne Mulcahy recently sounded a note of excitement about investing in smaller companies like Powerset (that is focusing on natural language search.) Microsoft, of course, has a history of working with third-party developers to its various platforms, such as .NET and even recently worked out a deal with Lenovo to have the PC maker provide some support to its Live platform. And Novell, which Schmidt once ran, has long worked with its channel and developers on its various platforms.
Google does have efforts like Google Code, but as Susie Wee points out, Schmidt's focus, publicly, is on what's going on inside of the company.