You Can Hear Google Now

Google is in late stages of talks with various wireless carriers, including Sprint Nextel and T-Mobile, about equipping cellphones with new software designed by the Internet giant, according to three people familiar with the discussions.

It is one of several ventures Google is making into the wireless market as it tries to expand its Internet advertising empire to cellphones. In addition to forging partnerships with wireless carriers, Google is also talking to software developers and handset makers, these people said. Official agreements could be reached during the next two weeks.

Customizing handsets with a Google-powered operating system would rewrite the traditional wireless business model. Today's wireless carriers and handset manufacturers largely determine which applications consumers can access with their cellphones. Google aims to loosen those restraints by introducing a system that would be compatible with third-party features and services. In other words, software companies could design new features to work with Google's software.

Opening up wireless networks has been Google's top agenda in Washington. It successfully lobbied the Federal Communications Commission to apply open-access rules to a major auction of wireless spectrum. The move was hotly protested by the top two wireless carriers, AT&T and Verizon Wireless, who say opening up their networks could expose their customers to unwanted features and scams.

Google has committed to spending at least $4.6 billion to bid on the licenses for the new airwaves, potentially to build a wireless network. It has also forged other wireless partnerships, most recently with Sprint to develop software for devices that will run on its new WiMax network. Some industry speculation indicates that Google may also be developing its own cellphone.

"The notion is that if you had a more open system, we'd start seeing all kinds of new, innovative offerings on cellphones, like we see now on the Web," said Scott Ellison, vice president of mobile and wireless communications at IDC, a market-research firm.

Google has made plain that it believes the future of the wireless industry is in advertising. "Your mobile phone should be free," paid for by ads, chief executive Eric Schmidt has said.

Investors appear to have responded well to Google's strategy. Since going public in August 2004, Google's stock price has increased more than 600 percent, closing yesterday at an all-time high of $707 a share.

But the move into wireless opens new territory for Google, which came to dominate the Web by perfecting one product -- search -- then moving into other areas, all through its own Web site. But now it must work with decades-old wireless carriers that hesitate to give up any control, a handful of handset manufacturers and the wireless industry's poor image among consumers.

"When Google goes into wireless in a serious way, the expectations around the country will change," said John Gauntt, an analyst at eMarketer. "[Do] you ever go to Google technical support?"

Roger Entner, senior vice president in the communications sector at IAG Research, said that as Google rushes into the industry it might not be able to duplicate the success it has found on the Web. For starters, he said, putting Google software on phones requires a great deal of complex coordination between Google, the carrier and the cellphone maker.

"The challenge is, they might not be able to replicate that Google magic on a two-inch screen compared to a 20-inch screen," he said.