Google seeks allies in mobile-phone market

Google has invested hundreds of millions of dollars in its mobile-phone project and is courting US and European mobile operators, The Wall Street Journal reported on Thursday.

Anian, a Reuters company that tracks industry trends for institutional investors, reported last month that Google had engaged Taiwan's HTC to design a Linux software-based phone for launch in the first quarter of 2008.

The Anian report cited industry sources as saying that T-Mobile would probably be Google's US partner, with France Telecom's Orange selling the phones in other markets.

The Wall Street Journal said on Thursday that Google had also approached the two biggest US wireless services, AT&T and Verizon Wireless, in recent months to ask them to sell phones with Google service.

It cited a Verizon Wireless executive as saying the company had decided not to integrate Google's web search tightly into its phones because of Google's advertising revenue-sharing demands. The newspaper said the executive had not commented on a Google phone.

A person familiar with the situation told Reuters that talks between Verizon Wireless, owned by Verizon Communications and Vodafone, and Google have ended without resulting in an agreement.

Representatives for Verizon Wireless, T-Mobile and AT&T declined comment.

T-Mobile and Vodafone already incorporate Google search in their mobile web service in Europe, while AT&T offers it as one of several web-search options.

"We talk to a lot of different companies and we're not going to comment on our discussions with any of them," said Mark Siegel, an AT&T spokesman.

Google was not immediately available for comment. The company has said wireless is an increasingly important market, but it has not announced plans to build a phone.

It said last week that Sprint Nextel would feature Google services on devices for a new wireless network that the number-three US mobile service is building.

Google has also developed prototype phones and talked over technical specifications with manufacturers including LG Electronics, the newspaper said.

Mobile advertising is still a relatively small market but advertisers and wireless experts expect this to change.

Yankee Group has forecast the mobile ad market to more than quadruple to $275m (£134m) in 2007, eventually increasing to $2.2bn in 2010, up from an estimated $60m in 2006. Some experts are forecasting an even bigger market.

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