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Google, Verizon may form partnership

Pair seen looking at mobile phone software, services

A partnership with Verizon would help Google parlay its dominance of Internet advertising into the wireless market. A partnership with Verizon would help Google parlay its dominance of Internet advertising into the wireless market. (Justin Sullivan/Getty Images)

DALLAS - Google Inc. is in talks with Verizon Communications Inc. to work together on mobile phone software and services, a person with knowledge of the discussions said.

Google may build its own operating system software or applications for phones, the person said yesterday. The companies are discussing how they would put together a partnership and ways to make money off the developments, said the person, who asked to remain anonymous because the talks are private.

A partnership would help Mountain View, Calif.-based Google parlay its dominance of Internet advertising into the wireless market. For Verizon, it may expand the phone company's sales of more profitable data downloads such as Web browsing. About 1 billion Web-enabled phones will be sold by 2011, according to researcher IDC in Framingham, Mass.

The two companies aren't yet close to an agreement, said the person. Google spokeswoman Erin Fors and Verizon Wireless's Jim Gerace declined to comment. The Wall Street Journal reported the talks earlier yesterday.

Google shares rose $15.54 to $694.77 on the Nasdaq Stock Market. New York-based Verizon, which co-owns Verizon Wireless with Vodafone Group PLC, fell 63 cents to $45.36 on the New York Stock Exchange.

As part of its expansion in the mobile industry, Google said in July it may bid at least $4.6 billion to buy wireless airwaves at a US federal auction. The company might work with smaller service providers to create its own network.

Chief executive Eric Schmidt noted the importance of the mobile phone market at a press briefing in May, before Google's annual shareholder meeting.

"Many people in the next five to 10 years - their first experience in the Internet will be through a mobile phone," Schmidt said.

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