In another positive sign for the tech economy, Google this afternoon reported a 17 percent increase in quarterly revenues, to $6.67 billion. "Given that the global economy is still in the early days of recovery, this was an extraordinary end to the year," Google CEO Eric Schmidt said in the company's earnings release.

The company reported profits of $1.97 billion, up from $382 million in the same quarter last year, when results were lowered by special charges.

Google's business is based primarily on online advertising revenue. Sites owned by the company were responsible for $4.42 billion of its quarterly revenue, up 16 percent from the same period last year. Google's partner sites, which display ads from its AdSense program, accounted for slightly more than $2 billion of the company's revenue, an increase of 31 percent from the year-ago period.

The company last week said it would no longer censor its search results in China, after uncovering an online attack against Gmail users that was believed to have originated in the country. Speaking on the company's conference call, Schmidt said the long-term effect of that move remains unclear. The company cautioned at the time of the announcement that the move could ultimately force it to stop operating in the country.

Google's strong quarter follows reports of improvements in PC sales and other areas of the technology industry. Chip-maker Intel also posted significantly higher revenues last week.

Update, 2:50 p.m.: On the conference call, Schmidt was asked about the company's relationship with Apple, a key topic given Google's move to compete with its Android mobile operating system. Schmidt, a former Apple board member, noted that Google partners with Apple in some areas and competes in others, and he said he expects that situation to remain relatively "stable" for the time being.

Google is the default search engine on the iPhone, but there have been recent reports that Apple is negotiating with Microsoft to put Bing in that position. Asked about that situation, Schmidt said, "As far as I can tell, our business structures with Apple are quite stable. I'm not going to speculate on any deals of any kind, rumored, true, not true, you name it, we're not going to talk about it."

Schmidt was also asked about the Nexus One phone, which Google is selling on its own directly to consumers, which some -- including Microsoft -- view as a conflict with the traditional model of offering through wireless carriers.

"What the Nexus One is really about is a new way of buying a phone," Schmidt said, calling it "the first of a series of examples where you can essentially purchase a phone online from one or multiple manufacturers. ... We think that's a natural evolution of a particular model. It doesn't exclude the other models. I think it's compatible with them, in the sense that the retail model will continue to be quite successful. So far our partners have understood that message, they have been OK with it, and the Nexus One itself of course is a magnificent product."