It is also trying to acquire AdMob, a company that places advertisements in applications, but the deal is being scrutinized by the U.S. Federal Trade Commission. Due to that regulatory review, Gundotra said he couldn't talk much about the potential of that acquisition.

Regardless of where the advertisement is displayed, Google thinks that mobile ads could become as valuable or even more so than the equivalent on the desktop. When the vast majority of phones on the market were feature phones, the cost per click was dramatically lower than that on the desktop, Gundotra said. But with the growing use of smartphones, the mobile cost per click has risen dramatically, he said. "With improved technologies like location capabilities, we hope and believe that there's even a chance that it can exceed the desktop in the future," he said.

Google also expects that the number of search queries originating from phones will make up a bigger portion of total queries, but Gundotra wouldn't describe the current proportion of phone versus computer queries. Because the growth of phone-based queries is moving at a much faster clip than the growth of computer-based queries, "it's only natural to assume it will represent a bigger and bigger portion of our business," he said.

When asked about how Google's recent threat to pull out of China due to the country's censorship requirements might affect Android sales there, an executive didn't reveal more than the company has so far. Because Android is open-source software and is thus available for any handset maker to use, "China is another great market in which Android should flourish," said Patrick Pichette, Google's chief financial officer.

They also would not say more about the role that Google might take in the recent lawsuit that Apple filed against HTC. "We're not a party to the HTC lawsuit, but we stand behind the Android OS and our partners," said Mario Queiroz, vice president of product management for Android.