Google holds its line as mobile rumours increase

Technology

Unlike Apple's iPhone (pictured), Google's phone product would draw it's revenue from commercial advertising

Are mobiles just a rip-off?

Friday, August 03, 2007

By Stephen Foley

After Apple’s iPhone, what about the Googlephone? The search engine company has been secretly developing prototype mobile phones and testing a host of new software and mobile services, with some estimates putting its investment in the project at hundreds of millions of dollars.

Google is being increasingly open about its desire to crack the market for mobile phones, but speculation still swirls about whether it will develop its own handsets or just work to have its search software pre-installed in other phones. It is also mulling a bid for parts of the radio spectrum in the US, which could turn it into a mobile phone operator in its own right.

The company has shown prototype phones to several wireless carriers in the US to try to persuade them that they should be offering new Google services, such as maps and Yellow Pagesstyle local business searches – all of which it can sell adverts on. The company brings in more than $40m (£20m) a day from adverts next to search queries on personal computers, but it believes it would get access to a whole new set of local advertisers on more mobile devices.

Rumours of a Google-phone have been rife on the internet for months, but the company is stonewalling detailed questions. “At Google we are dedicated to providing access to the world’s information, with an ultimate goal of helping users access the information they want, no matter when or where they want it,” a spokesman said yesterday. “What our users and partners are telling us is that they want Google search and Google applications on mobile, and we are working hard to deliver that.”

A Wall Street Journal report yesterday quoted sources involved in the project as saying that hundreds of millions of dollars have been set aside for the push into the mobile market.

The latest rumours come days after Google said it may bid for a slice of the US radio spectrum which is going up for auction in the autumn. The company, with other technology firms, won a partial victory in its campaign for new open access rules, so that the spectrum cannot be used by wireless operators to lock customers in to particular handsets. Google has had some success in integrating its search software with European phones, including some used by Vodafone, but the market is more rigid in the US and its partnership discussions with carriers here are at an earlier stage.