Summary:

Eric Schmidt is feeling good. While acknowledging difficulties in the broader market, Google (NSDQ: GOOG) is well positioned for the year to…

Eric Schmidt is feeling good. While acknowledging difficulties in the broader market, Google (NSDQ: GOOG) is well positioned for the year to come, Schmidt said in his prepared remarks. And right off the bat, in his prepared remarks, he confronted the doubters: “Paid click growth has been much higher than has been speculated by third parties.”

– In a rundown of the numbers, (still) CFO George Reyes promised continued heavy capex, and more jobs cut at DoubleClick (15 percent of remaining workforce).

– Sergey Brin, talking up product: The company has launched over 100 search improvements, including better localized search internationally, as well as the company’s somewhat controversial “search within a site” service. On mobile: mobile search is now available in 40 languages, and mobile traffic is growing very rapidly (though he didn’t specify the number). Larry Page picks up the baton, mentions a few other new services, like better analytics tools, and pay-per-action advertising. On YouTube, 10 hours of video are uploaded every minute. YouTube is seeing better results from overlays than other ad forms, like banners.

Q&A set to begin:

CFO Search: Schmidt: “A whole bunch of candidates that we’re really close to… we have not made any offers.” (This must be getting a little old for Reyes.)

Advertising initiatives: Omid Kordestani: Advertisers are liking integrated ad options (Adsense, Feedburner ads) Brin: “There are certainly already Google-owned sites that run display, like YouTube… I think there are some other Google properties that might be good fits (Orkut, Google Images)… but no specific plans to announce.”

Economy: Schmidt: “We do not see an impact as of this time… we are well positioned should economics change.”

Ad quality: Page: “The clickable background that we eliminated… our advertisers certainly appreciated that.” Overall: “There are certainly dozens, if not a hundred improvements in ad quality that we launched over the quarter.” Jonathan Rosenberg: “I think there were relatively fewer in terms of impact than we typically” (This is a bit of a surprise, since ad quality improvements were supposed to be the savior of the quarter). Some specific improvements made: “Landing page quality improvements… we’ve removed a lot of made for ad pages.”

Mobile ads: Brin: “I can tell you anecdotally… in the countries and markets where mobile has developed, in terms of high resolution where the networks have low latency, like Japan, the mobile search and ads work very well.” Overall: “‘There’s nothing to dissuade me that it works worse than traditional desktop search.” Eventually, there’ll be more in Europe and US.

Yahoo (NSDQ: YHOO) ad partnership: “On the Yahoo question, we are very excited to be participating in this test… I don’t think it’s appropriate to be speculating beyond that.”

Economically sensitive areas: In certain areas, like finance and mortgages, paid click volumes do decline relative to others. But on an absolute basis, they’re all showing growth. Schmidt: “It’s possible that prices go up because of the great value of targeted advertising.” (This is a core question, cause it basically gets at the much-debated matter of whether, to some extent, the business is naturally recession resistant.) Bottom line is at this point, the movement of ad dollars online is a stronger force than any weakness that advertisers might be seeing.

China market and Kai-Fu Lee: A bit of an odd answer from Schmidt on this question: “On the China side things are going well… why don’t we move to our next question.” Later on he noted that while market share in China is low, there’s still a lot of money there, just because the market is so huge.

– Finishing up Schmidt congratulated Omid as well as other international Google execs on the first quarter where international revenues eclipsed domestic revs. Meanwhile, Google shares are up 78 points or over 17 percent after hours to over $527.

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