<div><p> By Brian Womack </p><p> [Bloomberg] -- Google Inc. (GOOG), aiming to take on Apple Inc.'s (AAPL) iPhone and defend its dominance in Internet search, introduced a touch-screen mobile phone that runs on its own Android operating system. </p><p> The device is 0.45 inches [11.5 millimeters] thick, about the same as the iPhone, and has a larger screen than its rival. The phone will cost $179 with a T-Mobile USA contract and $529 without it, Mario Queiroz, Google's vice-president of product management, said today at an event at Googles headquarters in Mountain View, California. </p><p> Google, owner of the most-popular Internet search engine, is boosting investments in the mobile-phone market as growth in its search-advertising business on desktop computers slows. The company is trying to take advantage of increasing demand for phones that can surf the Web and sell more ads for such devices. </p><p> Google's Android operating system is already used by phone makers such as Motorola Inc. Android software was first offered in 2008 on phones made by HTC. </p><p> The Nexus One has a 3.7-inch [9.4-centimeter] screen, and it weighs 130 grams [4.6 ounces]. It uses Qualcomm Inc.'s Snapdragon processor. </p><p> Google fell $2.62 to $624.13 at 1:45 p.m. New York time in Nasdaq Stock Market trading. The shares doubled last year. </p><p> Mobile-Ad Market</p><p> Creating its own handset reflects Google's effort to expand advertising sales on mobile devices, a market that may grow to $2 billion to $3 billion in the U.S. by 2013, up from less than $1 billion now, according to Sanford C. Bernstein & Co. </p><p> The share of Web searches done from mobile devices will climb to 2.3 percent by the end of 2010 from 1.3 percent now in North America, according to Quantcast, a San Francisco-based research firm which measures data based on Web-publishing software. Globally, handheld searches will climb to 1.8 percent from 1 percent today. </p><p> In November, Google announced plans to pay $750 million for AdMob Inc., a mobile-phone advertising startup backed by Sequoia Capital, one of Google's original investors. Today, Cupertino, California-based Apple said it bought Quattro Wireless, an AdMob rival. Apple is also planning to unveil a tablet device this month, according to a person familiar with the matter. </p><p> Android devices accounted for 12.4 percent of mobile Web browsing in North America in December, according to Quantcast. That compared with 65 percent for the iPhone and 8.7 percent for Research In Motion Ltd.'s BlackBerry. Android surpassed the BlackBerry in November for the first time. </p><p> Android Market Share</p><p> "The Nexus One will be another big boost for Android," Quantcast Chief Executive Officer Konrad Feldman said in an interview today. "It's clear that people adopting Android are using their phones for the Web more." </p><p> With the new phone, Google will be able to win more share for Android, said Kevin Burden, an analyst at ABI Research in Oyster Bay, New York. </p><p> Android probably had about 4 percent global market share in 2009, Burden said. The iPhone had 9 percent, and Symbian, which Nokia Oyj uses on its smartphones, had 48 percent. RIM's BlackBerry had 18 percent, Burden said. </p><p> Smartphone sales rose 12.8 percent in the third quarter, while overall global mobile-phone sales increased 0.1 percent, according to researcher Gartner Inc. </p><p> Google first disclosed it was working on an Android device on Dec. 12. </p><p> To contact the reporter on this story: Brian Womack in San Francisco at Bwomack1@bloomberg.net. </p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=66854747&bid=informcom" /></div><div id="copyright"><div>

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