Google may be working on mobile phone plan

Speculation that internet giant Google is set to launch its own mobile phone has intensified and the search company has not moved to damp down the rumours.

Reports are suggesting that it will release a number of "G-phones", which would run its e-mail, mapping and search applications.

On Thursday, the Wall Street Journal carried a report that claimed Google has invested hundreds of millions of dollars in its mobile phone project and is courting US and European mobile operators to get them to sell it.

Google yesterday issued a statement that, significantly, did not deny that it was developing a phone.

"What our users and partners are telling us is that they want Google search and Google applications on mobile, and we are working hard every day to deliver that," the company said.

"We're partnering with carriers, manufacturers, and content providers around the world to bring Google search and Google applications to mobile users everywhere."

There have been a number of hints in recent months that the company, which dominates internet search and advertising, plans to focus more heavily on the mobile space.

Last month, Google said it would participate in US auctions for radio spectrums if the federal regulator guaranteed that the winning bidders would have to provide wholesale services to other operators.

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

That report cited industry sources as saying T-Mobile, owned by Deutsche Telekom, would probably be Google's US partner, with France Telecom's Orange selling the phones in other markets.

Mobile operators have also increasingly been turning to Google to embed its applications, such as its mobile search tools and e-mail services, on their phones.

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

Google clearly believes that the time is ripe to move into the nascent mobile advertising market. Yankee Group has forecast the mobile advertising market will more than quadruple to $275 million in 2007 and eventually grow to $2.2 billion in 2010, up from an estimated $60 million in 2006.

Some experts are forecasting an even bigger market. - (Additional reporting: Reuters)