The collaboration between two of the most powerful brands in technology is seen as a potential catalyst for making internet use of mobile phones as natural as on desktop computers and laptops.
Executives from Orange flew to Silicon Valley in California for a meeting at Google's headquarters, or 'Googleplex', to hold preliminary discussions about a joint deal. The companies believe that they have an affinity as brands that are perceived as both 'positive' and 'innovative'Their plans centre on a branded Google phone, which would probably also carry Orange's logo. The device would not be revolutionary: manufactured by HTC, a Taiwanese firm specialising in smart phones and Personal Data Assistants (PDAs), it might have a screen similar to a video iPod. But it would have built-in Google software which would dramatically improve on the slow and cumbersome experience of surfing the web from a mobile handset.
A source close to the talks told The Observer: 'Google are software experts and are doing some amazing work compressing data so that the mobile user gets a much better experience. They don't know so much about mobiles, but they are eager to learn from Orange's years of experience.'
Among the potential benefits are location-based searches: aware of your handset's geographical position, Google could offer a tailored list of local cinemas, restaurants and other amenities, and maps and images from Google Earth. It is believed that the Google phone would not go on sale before 2008.
Google value the expertise of Orange, which is owned by France Telecom, Europe's second-largest telecoms group. A joint deal could be highly lucrative. Google recently became Silicon Valley's most valuable business at £81bn, although it still has a long way to go to eclipse the Seattle-based Microsoft. France Telecom has had a rockier spell, but this year announced sales of £33bn.
Tony Cooper, a telecoms consultant at Deloitte, said: 'There are numerous situations in which people say "I wish I had Google in my hand", and I can imagine the younger generation of users would think that a Google phone is a cool idea. It could bring in location-based searches like "Find a Thai restaurant in my area".'
He added: 'It has a potential to be a success, and to offer commercial success for both companies, particularly if Orange can link it to its broadband offering. If I was Orange, I'd want to get a share of the ad click-through revenues; if I was Google, I'd want a share of the airtime revenue. The potential stumbling block is if it's clunky and hard to use.'
Google already offers its search engine and other services on mobile phones. It has a partnership with Vodafone and last month announced a broadband agreement with the operator 3. It is working to make youTube, the video-sharing site it bought recently for £870m, easily accessible on handsets. But it is eager to expand in what experts see as a huge potential market, possibly the key to the future of the internet.
Manufacturers such as Nokia and Motorola are working to make the mobile internet commonplace. Earlier this year Anssi Vanjoki, executive vice-president of Nokia, said at a product show in New York: 'In the mid-Nineties I said that if you don't have a mobile phone you will be making a declaration that you wanted to be outside organised society. People said I was crazy, but now everybody has a mobile phone. Today I'm saying that in 10 years' time the same will be true if you don't have the full internet in your pocket.
A spokesman for Google said: 'We don't comment on market speculation and rumour, but we are focused on mobile and there's nothing new in our commitment to that space.' Orange declined to comment.
