Google's Calling?

When you think of phones and rumors, the first word that springs to mind is probably Apple's (Nasdaq: AAPL  ) "iPhone." (My Foolish colleague Tim Beyers recently wrote about more iPhone rumors and pointed out that it's almost become an urban legend at this point.) Well, maybe there's another contender in the arena of rumored phones: Google (Nasdaq: GOOG  ) . If the rumors turn out to be true, the bottom line is, it better be good, Google.

Speculation that's been percolating across the Web for the last couple of days is that Google is in discussions with France Telecom Group's Orange to team up on a Google-branded phone. (Maybe it should be called Gphone.)

Such a product would obviously compete with wireless offerings from companies like Sprint Nextel (NYSE: S  ) and Verizon (NYSE: VZ  ) , as well as with smart phone makers like Palm (Nasdaq: PALM  ) and Research in Motion (Nasdaq: RIMM  ) .

I can see the logic that features like Google Maps can be useful on a phone (I can access Gmail and Google Maps on my own, non-Google-branded cell phone if I want to -- although it's rare that I do). I can also see that Google is a strong and well-recognized brand, with many fans. However, I don't see how a Google-branded phone would do too much for Google, unless it's bringing a great deal of innovation to the table and offering a whole new kind of experience, as well as the ones fans would expect.

Google's been releasing beta Web products at breakneck speed ever since it's been public, and it's arguable that the only one that's really made major inroads with people has been its core function, Web search. For example, Gmail lags other Web-based email services, and of course Google agreed to pay a pretty penny for YouTube when Google Video wasn't taking off like it wanted. At some point, it seems to me that when companies try to be too many things to too many people in too many ways, it can dilute the power of their brands, especially if the new product is a flop.

I often wonder whether Google's going to suffer from lack of focus as it continually tries to take on and one-up its rivals, Yahoo! and Microsoft -- so why would a phone even be on the list? Google's CEO Eric Schmidt admitted earlier this year that Google's tremendous volume of new products was "confusing to almost everyone."

What might make a Google phone more interesting would be the possibility of cheaper (or free) calling such as VoIP provides (think of eBay's (Nasdaq: EBAY  ) Skype). Also, Eric Schmidt was quoted earlier this year saying cell phones should be free, in fact, funded of course by targeted advertising (although he said Google had no plans to offer such a phone and knew of no plans of other companies do so). However, given the fact that the Google/Orange phone is still in the realm of the flimsiest of rumors -- and the rumor mill can go crazy from here, if you keep digging into the ideas and past rumors of what Google could do -- it's a good time to put excitement on hold and wait for some real news.

Yahoo!, Palm, and eBay areMotley Fool Stock Advisorpicks. Microsoft is aMotley Fool Inside Valuerecommendation.

Foolanthropyis celebrating its 10th year! To learn more about our five Foolish charities or to make a donation, visit www.foolanthropy.com.

Alyce Lomax does not own shares of any of the companies mentioned.


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