Free cash flow is overrated, Google's (GOOG) - Get Report chief financial officer suggested Wednesday.

The return on investment that Google can get from making capital expenditures is vastly better than the 2.2% interest it can earn in a bank account, CFO George Reyes told investors.

Speaking at a Credit Suisse First Boston investment conference in Arizona, Reyes also suggested that Google was unlikely to build up the content on its site as much as has its chief rival,

Yahoo!

(YHOO)

.

"I'm not sure we're going there yet," Reyes said. "I'm not sure we're going there at all."

Reyes' comments -- coming in the form of a lunchtime presentation to investors and two subsequent question-and-anwer sessions -- mark Google's first investment conference appearance since the company went public in August.

Though Reyes, true to Google's corporate habits, declined to discuss Google's financial prospects and other company details about which investors are curious, he did shed some light on company strategy and company challenges, such as the difficulties that the IPO has posed in maintaining the company's corporate culture.

Google's shares fell $1.90 Wednesday to trade at $180.08. Shares have more than doubled since the company's $85-per-share offering.

Setting the tone for his Webcast presentation, Reyes made a reference to the boilerplate warnings that Google and other companies make, in communications with the public, that give them breathing room to make "forward-looking statements."

"I assure you," said Reyes, "if I make any forward-looking statement in this presentation, it's a mistake."

Following that caveat, Reyes did paint a clear-enough picture of Google's priorities, and its understanding of the competitive universe for paid search --a business that has proven a phenomenal driver of the company's revenue and profits.

He also agreed with one questioner that keyword prices -- that is, the amount that advertisers agree to pay when search-engine users click on ads to jump to an advertiser's Web site -- had room to go higher. Keyword pricing is one of the key drivers of revenue growth for Google and its competitors. "I think we just need to let this thing run its course," Reyes said.

With

Microsoft

(MSFT) - Get Report

building up its own search technology, Reyes said the company expected there will eventually be three major networks for paid-search advertising: Google's, Yahoo!'s and Microsoft's.

Asked whether

Time Warner's

(TWX)

America Online -- a company that now partners with Google to run its pay-per-click advertising -- could one day be a fourth such network, Reyes declined to comment.

While acknowledging that its competitors are smart and well-financed, Reyes indicated that Google has several competitive advantages, such as the scale of its computing infrastructure, and the trust that people place in Google's brand. "It's going to be very hard for some of these competitors to compete on that basis," Reyes said.

In his discussion of capital expenditures, Reyes said that Yahoo! wasn't making them at the rate Google was, and hinted that was a negative for Yahoo!.

At various points in his presentation, Reyes indicated that Google had launched ventures or made acquisitions without set-in-stone ideas about their ultimate place in Google's product line. Regarding Google's latest acquisition, the aerial-view Web site Keyhole, Reyes said, "We haven't completely figured out what we're going to do with it," though he invited his audience to speculate on what Google might do with Keyhole's "very powerful mapping engine."

Reversing the company's previous bias against technology developed outside the company, Reyes said that Google would likely continue its acquisition of "very cool technologies," as he put it. "We're not averse to buying great teams of engineers and great products," he said, though he said it would be out of character for the company to acquire larger companies than it has already.

Reyes acknowledged that the company faced challenges from the compensation of new hires -- presumably because the compensation of new arrivals at the company would be unlikely to match that of longtime employees who received stock and/or options at pre-IPO prices.

"It's hard," said Reyes. "You clearly end up with two classes of citizens. It's impossible to not breed some level of internal strife over that."

Helping to diminish that problem was Google's status as what he called as "complete and total a meritocracy as I've seen anywhere." Employees, he said, are ranked on a scale of 1 to 5. "If you're a one, you're gone," he said. If you're a five, he said, "you walk on water. ... If you're a five, you're going to make four times of what a three did."

Another major impact of the IPO, said Reyes, was that the company has had to limit the internal sharing of sensitive financial information, and thus limit the number of people in the decision-making process. "Historically, Google has been about group consensus and everybody having a vote in every decision," Reyes said. "The decision-making is much more centralized at the executive level than it has ever been before."