Google, Bidding for Phone Ads, Lures Partners

Google Inc. is trying to shake up the wireless industry by helping to create cheaper phones that can access advanced Internet services — and carry its lucrative advertising. Now that the Internet giant has cemented an alliance with 33 partners, the question is whether they will follow through on its attempt to change the rules of the game.

Google, Bidding for Phone Ads, Lures Partners 1

After months of anticipation, a group including Google and a number of mobile-handset makers, cellular carriers and other technology companies plans to make new software available — free of charge — to power mobile phones that will start hitting the market in the second half of 2008. The move paves the way for mass-market cellphones that will bring consumers’ experience on the mobile Web closer to that of personal computers. And Google is betting that its ad revenue will surge as a result.

Yesterday’s announcement could prove a short-term disappointment for consumers who were eager for more details — and photos — of what some have termed the “Google Phone” or the “Gphone.” Google didn’t announce the creation of any single Google-powered device or show what one might look like.

Still, the move shows Google’s latest tack for breaking down barriers to expanding its advertising and services businesses. It also highlights Google’s belief that its large ad business can benefit if it broadens Web usage — in this case on mobile phones.

Even if “Android,” as the platform is called, falls short, it highlights an important shift: Carriers and handset makers are seriously considering changes to the economics of how phones are sold to consumers, as well as offering more open access to the Web and third-party applications.

Google, Bidding for Phone Ads, Lures Partners 2

[Check it Out: Wall Street Journal]