Google shares break $700 on reports of wireless talks

Google shares broke through the $700 mark on Wednesday, after press reports
that the search engine giant is in advanced talks with U.S. wireless carriers
over 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.

On Wednesday morning, the
Journal expanded its story, reporting that Sprint Nextel is also at the
negotiating table with Google.

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 cell 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 Web sites, 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 cell phones.

Rampant rumors 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 U.S. will hit US$33.2 million this year and grow at a compound annual
rate of 112 percent through 2012, when it will total $1.4 billion.

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

Worldwide, mobile ad spending is expected to reach US$1.5 billion this year
and grow to $11.3 billion 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 cell phones.

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