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Schmidt in CNBC interview: We're concerned about Microhoo

In a taped appearance on the cable news outlet, Google's CEO makes it clear he isn't keen on Microsoft acquiring Yahoo.

Schmidt is concerned about a possible Microhoo combination.

In a broad interview scheduled to run on CNBC at 4 p.m. EST Wednesday, Google CEO Eric Schmidt made it clear he's not pleased with the prospect of a Microsoft-Yahoo combination.

In the interview with CNBC's Maria Bartiromo, Schmidt said that given Microsoft's history of antitrust issues, an acquisition is cause for concern, according to a transcript of the interview. He also said a two-week partnership trial with Yahoo went well, and said he expects it to be one of several options Yahoo's executives are considering for their future.

"Well, the long and short of it is that we did a test for about two weeks, which has since ended, where Yahoo took a small percentage of their ads and replaced them by ours," Schmidt said. "We did this as part of a commercial conversation, which I obviously cannot go into, but it's one of the strategic options that we believe Yahoo is considering at this time."

Schmidt, who was a senior executive at Sun Microsystems and CEO of software-maker Novell before taking the helm at Google, has competed with Microsoft for years, and it was very clear in his conversation with Bartiromo that he is not keen on the Redmond, Wash., company landing Yahoo. Schmidt said:

We actually enjoyed working with Yahoo. We also compete with them. They're a well-run and, I think, impressive company. We've primarily been concerned about the possibility of a Microsoft acquisition of Yahoo because of Microsoft's history and because the assets that Yahoo has are quite valuable. And we actually think that in the wrong hands, they could be used in the wrong way.

Nonetheless, beyond saying the Yahoo effort went well, Schmidt did not tip his hand about Google's response if it should face a Microhoo combination.

"There's a big debate within the company...people are concerned about the history, as I mentioned, and the possibility of a merger. So I don't think we really know yet. We debate it all the time," Schmidt said.

Some on Wall Street expect Microsoft to announce a hostile takeover bid of Yahoo as soon as Wednesday afternoon after the close of trading.