Google CEO sees free mobile phones, funded by ads

By Eric Auchard

SAN FRANCISCO (Reuters) - Web search leader Google Inc.'s (GOOG.O: Quote, Profile, Research, Stock Buzz) chief executive, Eric Schmidt, sees a future where mobile phones are free to consumers who accept watching targeted forms of advertising.

Schmidt said on Saturday that as mobile phones become more like handheld computers and consumers spend as much as eight to 10 hours a day talking, texting and using the Web on these devices, advertising becomes a viable form of subsidy.

"Your mobile phone should be free," Schmidt told Reuters. "It just makes sense that subsidies should increase" as advertising rises on mobile phones.

He was interviewed following a speech on the theme of business innovation organized by Italian student groups and the Graduate School of Business at Stanford University.

Schmidt also said his company was working on how to allow users to maintain basic control of their personal data.

Currently, Google stores consumer data on hundreds of thousands of its own computers in order to provide additional services to individual users. The company is looking to allow consumers to export their Web search history or e-mail archives and move them to other sites, if they so choose.

"We are working to ensure that as long as it is yours, we want to give you the equivalent of number portability," Schmidt said at another conference earlier this week. Portability is a government-mandated program that allows consumers to retain their mobile phone numbers when they switch carriers.

This undertaking is both a recognition of users' right to control their personal information, an effort to head off regulatory action and a response to an increasing trend on the Internet toward openness rather than exclusivity, he said.