Google is ramping up efforts to enter the European and US mobile phone markets with smartphones running Google's own search and web-browsing software, according to a report on Thursday in The Wall Street Journal.

Google has already held high-level talks with Orange on introducing a European handset running Google software. Google hasn't let its mobile plans stagnate since then, recently announcing it may bid for spectrum in US wireless auctions, a move that could eventually turn the company into a carrier.

Google has also recently reached deals with Vodafone and T-Mobile in Europe, as well as Sprint Nextel and other US carriers, to build products like search and Google Maps into their mobile products and Internet portals.

In December, The Observer reported Google had held high-level talks with Orange over a Google-powered phone, with Orange executives flown to Google's headquarters in California to discuss the plan.

The search giant has spent hundreds of millions to develop mobile software and hardware specifications, according to the Wall Street Journal report.

Several handset designs have been produced and Google has working prototypes, the report said. It has held talks with T-Mobile USA and Verizon Wireless and hopes to enlist multiple operators and multiple manufacturers in the scheme.

The goal is to position Google as a dominant force in mobile advertising, much as it is already with web advertising. Google chief executive Eric Schmidt has remarked that mobile phone ads are more personal and thus can be twice as profitable.

The handsets could ultimately be given away, with hardware costs covered by prospective advertising revenues, the Journal reported.

Google wouldn't charge licensing fees to telcos or hardware makers and wouldn't require the phones to carry the Google brand, the Journal reported.

Google declined to comment on the report of the prototype, but confirmed that it is working with partners to expand its software applications from the traditional Internet to mobile devices.

"We're partnering with carriers, manufacturers and content providers around the world to bring Google search and Google applications to mobile users everywhere," a Google spokesman said.

The reported manoeuvres would, however, go far beyond existing deals.

The phones themselves wouldn't aim to be revolutionary, according to all reports, instead using form factors already common among smartphones, similar to a BlackBerry or Treo. HTC and LG have been mooted as possible manufacturers.

IDG News Service contributed to this report.