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Gphone rumours send Google stock soaring

Shares break $700 on reports of wireless talks

Google shares exceeded $700 yesterday following press reports that the search engine giant is in advanced talks with US wireless carriers over the adoption of mobile phone software Google is reportedly developing.

On Tuesday evening, Reuters and The Wall Street Journal, quoting anonymous sources, reported that Google and Verizon Wireless are making progress in drafting a mobile partnership.

Yesterday morning, the Wall Street Journal expanded its story, reporting that Sprint Nextel is also at the negotiating table with Google.

See also: Google phone platform coming in 2008

Earlier on Tuesday, the Journal had reported that Google will soon announce details of its mobile phone platform, which, according to the paper's sources, Google will deliver in mid-2008 and which will allow outside developers to create mobile applications.

At issue is Google's need to make it easier to deliver online services like web search through mobile phones, and, consequently, extend its online ad reach to the mobile market. The market is tiny but is expected to grow quickly in coming years.

Google already provides services for mobile phones via different methods. For example, Google has created mobile versions of some of its websites, which can be accessed via mobile browsers. It also has some deals with carriers to integrate Google services into the menu of features these telecom companies offer to their mobile subscribers. Finally, Google has also developed mobile applications that people can manually download to their mobile phones.

Rampant rumours and speculation about Google's mobile phone strategy have been around for the past six months or so, and at one point included reports that Google would go as far as make actual handsets, something that it apparently has no plans to do.

The Kelsey Group recently forecast that mobile search and display advertising in the US will hit $33.2m this year and grow at a compound annual rate of 112 percent through 2012, when it will total $1.4bn.

Kelsey Group also expects the number of mobile internet users to grow at a 20 percent compound annual rate in the US through 2012, when there will be almost 92 million people going online via their mobile phones.

Worldwide, mobile ad spending is expected to reach $1.5bn this year and grow to $11.3bn by 2011, according to market researcher Informa Telecoms & Media.

Other internet companies like Yahoo, AOL and Microsoft are also busy retooling their online services and applications so that they can be used on mobile phones.

However, these internet companies are finding that delivering online services and applications via mobile phones isn't as straightforward as doing it via PCs.


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