Google wants its software on more cellphones for the opportunity to present lucrative mobile ads, but the wireless companies have issues with Google’s business terms.

Mobile Ads Show Google The Money

File this one under billionaires squabbling with billionaires. Google has offered the hand of friendship, in the form of search and other mobile applications, to the wireless industry.

The Wall Street Journal cited Google’s top executive on the concupiscent passion the company has for mobile devices:

"What’s interesting about the ads in the mobile phone is that they are twice as profitable or more than the nonmobile phone ads because they’re more personal," said Google Chief Executive Eric Schmidt at the D: All Things Digital conference in May.

A partnership between wireless companies and Google should be a no-brainer. The wireless industry receives useful applications and Google’s industry-dominant search on their phones, customers benefit from those applications, and Google makes some money on advertising.

But this is the mobile industry we’re discussing. They have some problems with splitting the ad bucks with Google, the report said:

Verizon Wireless Chief Executive Lowell McAdam said the carrier has chosen not to integrate Google’s Web search engine tightly into its phones because of Google’s demands to get a large share of search-based ad revenue.

"What this really boils down to is a battle for the mobile ad dollar," Mr. McAdam said in a recent interview. "They want a disproportionate share of the revenue."

The Journal also noted Google’s phone projects, of which the company won’t discuss in depth yet. They also raise the notion of Google as mobile operator, something we’ve suggested as possible over the past couple of years.

That really looks like the way Google will earn the most from its mobile desires. We’re inclined to believe wireless Internet, like WiMAX, rather than the multi-billion dollar 700MHz spectrum going up for auction in 2008, will be the foundation for Google’s mobile designs as a matter of control.

McAdam may not have liked Google’s terms, but he and the rest of the four major wireless companies will like Google as an independent provider of mobile phone, advertising-backed service even less.