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Eric Schmidt
Eric Schmidt

Why use Google Docs over Microsoft Word? According to Google Executive Chairman Eric Schmidt, there’s a very simple answer.

As a part of CNN’s ongoing “Chicagoland” documentary series, cameras followed Schmidt, Mayor Rahm Emanuel and IBM exec Stanley Litow into one of Chicago’s IBM-funded technical schools. As a part of the executives’ visit, a teacher asked the class why they should use Google Docs, and a grinning Schmidt chimed in with: “Because it’s free!”

While he had already spent time establishing the service’s bona fides, saying that he wrote a book with Jared Cohen using Google Docs, Schmidt’s comment highlights one of the risks Microsoft faces in the academic world. While Microsoft has started offering schools incentives to use Office 365, including free licenses for their pupils, the company is under greater pressure from its competitors. As more schools like Chicago’s face budget shortfalls, free and discounted products from companies like Google and Apple, especially when attached to financial assistance, start looking better and better.

Apple, too, has a lot to gain with Microsoft’s stumbles. The iPad is a leading choice for educators looking to add tablets to their curriculum, and Apple’s free iWork suite provides productivity tools that are good enough for most academic uses. Microsoft looks like it could make a comeback in that arena soon, though: the company’s stock price soared to a 14-year high yesterday following rumors that the company plans to unveil a version of Office for the iPad next week.

It’s clear that there’s a demand for Microsoft’s services on Apple products, too: When Microsoft started offering a free version of its OneNote note taking software on the Mac App Store this week, it reached the top free spot on the store’s most downloaded charts on its first day of availability.

Not everyone is thrilled with businesses’ involvement in schools, though. Karen Lewis, the president of the Chicago Teachers’ Union, said that she’d rather see companies pay more in taxes and fund schools that way, rather than relying on their charity or free software.

Here’s the clip from the show.

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