Google Vows Changes in China Soon

Google CEO Eric Schmidt told analysts that the company is abiding by China's censorship rules but says changes are coming.
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MOUNTAIN VIEW, Calif. (TheStreet) -- Google (GOOG) - Get Report said it is in discussions with the Chinese government over the censorship of its search service, and promised that changes are coming.

On an earnings call with analysts, CEO Eric Schmidt said the company no longer wants to abide by China's censorship rules and is in talks with government officials.

"We continue to follow their laws," Schmidt said. "But in a reasonably short time from now we will be making some changes there." Schmidt added that: "We remain quite committed to being there."

The comments suggest that Google would keep operations in China, but somehow distance itself from the censored search results that are required by the government.

Last week, Google said the company's network was attacked and that it discovered that the Gmail accounts of two human rights advocates were monitored. In response,

Google threatened to leave the China

if it couldn't provide uncensored search results there.

The comments came after


posted fourth-quarter earnings Thursday. Investors greeted the less-than-dazzling sales by selling the stock. Google was down 5% in after-hours trading.

Later on the conference call, analysts asked about the role of Google's

Nexus One

phone and the potential for it to step on the toes of its telco and phone manufacturing partners.

Schmidt emphasized that the company's approach was geared toward selling Android phones to consumers and less about a single phone. "Nexus One is about a new way of buying a phone," said Schmidt. "It doesn't exclude other models."

And as for hurt feelings among telcos, Schmidt said there were no problems to report. "For the most part," said Schmidt, "our partners understand the message and are OK with it."


(AAPL) - Get Report

would seem to disagree. After watching Google's Android phones launch at nearly every U.S. carrier, as a competitor to the iPhone, Apple has reportedly started discussions to replace Google with Microsoft's Bing as the search service.


Reported by Scott Moritz in New York.