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Google Growth Plan Fuels Skeptics

Google executives weren't particularly gloomy on Thursday's earnings call. The company didn't provide any financial projections, but sales chief Nikesh Arora shared his sunny assessment of how display ads in YouTube could be huge contributors to growth.

Google sales chief Nikesh Arora

Video ads are "going to be another big leg for the whole industry, not just for us," Arora said on the call.

The prediction clicked with ThinkEquity analyst William Morrison, who sees a big shift in ad spending headed toward video.

"Our research suggests we may be nearing a tipping point with some brand marketers who are beginning to move large portions of their television budgets to the online channel," Morrison wrote in a research report on Friday.

When it came to other areas like mobile search ads, Google tried to smooth over ripples caused by the splashy introduction of its Nexus One Android smartphone. CEO Eric Schmidt said there were no problems to report when it came to competing directly with device partners. "For the most part," said Schmidt, "our partners understand the message and are okay with it."

Apple (AAPL - Get Report) however, seems to disagree. After Google's Android smartphones -- positioned as bold competitors to the iPhone -- were announced, Apple reportedly started discussions with Microsoft to have its Bing search service replace Google on the iPhone.

Google shares fell 4% to $557.89 in early trading Friday.

-- Reported by Scott Moritz in New York.

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