This morning The Wall Street Journal reported that Google is working on a cell phone but has declined to comment on the project.

Here is what the Journal says about the long-awaited Google Phone:

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 wireless operators, the plans are a double-edged sword. Google’s powerful brand and its popular Web services could help operators sign up more subscribers to data packages, on which they increasingly rely as voice revenue declines. However, operators have been wary about losing control over the mobile-ad market.

The long-rumored Google phones are still in the planning stages, and wouldn’t be available to consumers until next year at the earliest, say people familiar with the idea. Some details are likely to shift as the plans develop.

So Google isn’t just making software for cell phones, it’s actually making a cell phone too.

Do keep in mind that Google hasn’t confirmed any of this but it’s still early in the morning and anything can happen.

In recent weeks, I’ve been discussing Google and mobile phones with a few of my technology friends and the question came up “why would Google go to all the trouble of actually building a mobile device?”

My answer was simply because it’s all about mobile ad dollars. Mo money, Mo money.

We must not forget about Google having $4.6 Billion ready for the upcoming FCC 700 MHz auction.

So with all this information floating around, what do you think? Is Google really going to launch a cell phone?

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