Gphone: Google Phone ?

There have been rumours of a Google phone (short form 'Gphone') for some time now. Now Google is a search company, or rather it is a company that is trying to do a lot of things, but which makes most of its money from search. It has tried to enter the mobile world through a tie-up with carriers about placing Google search in the mobile space. Now carriers are typically very hard creatures to work with; they don't allow much freedom.
And there was this revolution that happened. Apple released the iPhone in a tie up with AT & T, but shockingly for the telecom industry, it was Apple that called the shots. This was a new type of device with a lot of hype, and hence AT & T would have allowed this. But any such move does set a precedent that Google could easily try and copy:

The company, which has made billions of dollars in Web advertising on computers, is courting wireless operators to carry handsets customized to Google products, including its search engine, email and a new mobile Web browser, say people familiar with the plans. It wants to capture a big chunk of the fast-growing market for ads on cellphones.
Google has invested hundreds of millions of dollars in the cellphone project, say people who have been briefed on it. It has developed prototype handsets, made overtures to operators such as T-Mobile USA and Verizon Wireless, and talked over technical specifications with phone manufacturers. It hopes multiple manufacturers will make devices based on its specs and multiple carriers will offer them.

For Google, the mobile market is the hottest new emerging market, and must be the focus of a lot of strategy sessions at Google headquarters. Carriers have been not so easy to convince, but Google's might and the precedent of the iPhone could change things. If Google does come out with a cellphone, then one would expect more Wi-Fi integration and other methods of browsing, something uncomfortable to carriers since that is outside of their data plans.
The further advantage of having ads on cell phones is that they can be targeted better, and hence Google can ask for and earn more revenue per ad. One thing is sure, Google will do all they can to get an entry into this business, even if it means buying up spectrum and launching itself as a carrier.