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Google expected to disclose cellphone initiative

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From Reuters

Google Inc. will unveil its mobile strategy today, including a phone operating system and a broad alliance with multiple wireless service providers and handset vendors, according to people familiar with the matter.

Sources said the Google mobile operating system would be based on open-source Linux code, which will support applications from different software developers in addition to Google’s own services, which include e-mail and mapping.

Its partners include Sprint Nextel Corp., Deutsche Telekom’s T-Mobile USA, Motorola Inc. and Samsung Electronics, sources said. All the companies involved declined to comment.

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The phones are expected to come on the market in mid-2008, said one person who had been briefed on the plans.

“What Google is trying to do is win the war for a much larger audience, that being the mobile device,” said the person, who spoke on condition of anonymity.

“Google has been frustrated with their efforts to date to go in and do what they want” in the mobile arena, the source added. “Now they’re taking a different tactic, saying, ‘Why don’t we create a broader working group where we’re the anchor?’ ”

The alliance, which aims to boost mobile Web surfing, has more than 25 members, the source said. Noticeably absent, others said, is handset market leader Nokia, which owns 47.9% of British software company Symbian, a developer of operating systems for advanced cellphones.

Google, which dominates Web search on desktop computers, has long said Internet use on cellphones would be key to its growth, but it has heretofore been unable to crack the market.

Another person familiar with the matter said Google had to take a new approach and work with multiple partners if it wanted its mobile offerings to work well on a large number of phones.

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Unlike the desktop computer, where Microsoft Corp.’s operating system dominates, cellphones run on multiple incompatible systems, often requiring application vendors to customize their software for each device.

“If you’re Google looking at the mobile environment, what you see really does not resemble what happens on the desktop, and the foundation to create that doesn’t exist,” another person familiar with the matter said. “Google doesn’t necessarily want to be your phone . . . but they would certainly like to extend their business model to your phone.”

Shares of Google soared past $700 last week, buoyed by media reports that it would soon break into the phone market. The stock rose $8.04 to $711.25 on Friday, and has gained 50% in the last six months, outperforming rival Yahoo Inc.’s 9% gain.

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