Agog Over Google

But Schmidt was adamant in maintaining that Google would be legally correct in carrying out its policy of only removing copyrighted material after it has been notified about the content by the content's owner. The policy places the onus of identifying the content and bringing it to Google's attention on the content owner -- a tall order given the vast amount of material uploaded to YouTube everyday.

"We are relying on the Digital Millennium Copyright Act as it is being imposed by law, and there are not a lot of shades of gray in how it works. There's a set of procedures for take down. If you operate under this, companies have a safe harbor," Schmidt said. "So, whether people like it or not, it is the law of the land and we absolutely operate by it."

Analysts also have been concerned that buying YouTube would lead to higher capital spending, because Google would have to buy infrastructure to support the rapidly growing site in the resource-intensive video arena.

However, Larry Page, company co-founder and head of products, dismissed these concerns, saying the YouTube acquisition would "not be hugely material to our capital spending vs. all the other things that we are doing." Schmidt added that Google was the "beneficiary of huge economies of scale."

Google also said its overseas efforts were panning out well, and noted that international ad sales accounted for 44% of third-quarter revenue, as compared with 39% the year before.

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