On a chilly February morning, Andy Rubin hustles past equation-filled whiteboards in a two-story building on Google Inc.’s Silicon Valley campus.

Rubin, a computer scientist who builds robots for fun, has spent three years in this top-secret sanctum of the Googleplex. He’s putting the final touches on one of the most ambitious and potentially humbling projects the Internet juggernaut has undertaken: an operating system for cellular phones that’s designed to give Google the same grip on the mobile Web that it commands in online searches on personal computers.

“We’ve gotten to the point where anyone can build a cell phone,” Rubin, 44, says as he explains why Google is diving into wireless, the Internet’s new frontier. “What’s important now is software, having the next cool application.”

After luring an audience that tops 588 million people who search in more than 200 languages and winning 72% of the $22.5 billion in annual advertising linked to Web queries, Google founders Sergey Brin and Larry Page are hunting beyond the PC for growth. Fewer users are clicking on the text ads that run alongside Google’s search results, threatening the area that generated most of the company’s $16.6 billion in 2007 sales.

In January, such clicks fell 7.5% from December, Internet research firm ComScore Inc. reported. ComScore said that didn’t necessarily mean Google would record less revenue in the first quarter. Still, coming after the fourth quarter, when earnings of $3.79 a share fell short of the $3.91 average analyst estimate, investors feared the weakening economy was taking a toll.

Google shares, among the hottest on the planet as they soared eightfold after the company’s Aug. 18, 2004, initial public offering to a high of $741.79 on Nov. 6, 2007, have tumbled this year. On March 24, they traded at $460.56, a 33% drop in 2008 and a 38% plunge from their record close.

The looming presence of Microsoft Corp. is amplifying investors’ anxiety. In February, the world’s biggest software company made a $44.6-billion unsolicited bid for Yahoo! Inc., which is No. 2 behind Google in Web searches. Yahoo rebuffed the offer Feb. 11, saying that it undervalued the company.

Since then, Yahoo has deliberated about how to counter the proposal, leaving Google shareholders on edge.

Turning to telecom won’t make Google’s life any easier. Microsoft already enjoys 21% of the U.S. market for mobile operating systems. Winning Yahoo would give the software giant the most popular site on the mobile Internet, with 28 million combined subscribers, according to M:Metrics Inc., a Seattle-based research firm. That compares with Google’s 14.5 million.

Meanwhile, the phone companies that control the wireless networks aren’t likely to bow to Google at the expense of Apple Inc.’s iPhone and other hot products. Ralph de la Vega, CEO of AT&T Inc.’s wireless division, says a so-called Google phone likely could become just one of the many offerings in AT&T stores.

Ultimately, Brin and Page haven’t proved they can do anything else as well as they do search, says Laura Martin, an equity analyst at Soleil Securities Corp. who rates Google stock a “hold” because she’s wary about whether the company can keep growing as it has.

Winning on the mobile Web, one of the biggest and potentially most lucrative Internet markets, would take Google far in erasing such doubts. There are more than 3.3 billion cell phones worldwide, about one for every two people on the planet. By 2010, that’s expected to jump to 4 billion, or triple the number of personal computers, according to research firm Gartner Inc.

Brin and Page want the first page callers see on these phones to be Google’s.

From there, users would tap Google software to surf for information, e-mail friends, watch videos and find the nearest deli, just like they do on PCs. Google is betting that its Android operating system and made-for-mobile-phone programs will attract millions of customers who can be plied with ads, just like Google does on PCs.

“The cell phone is where it’s all moving, and Google has to get into that,” says Rich Redelfs, a venture capitalist at Foundation Capital, who invests in wireless technology companies. “The operating system has incredible power, as we’ve seen with Microsoft. So Google wants to create an operating system that can go across handsets and give them a stronghold.”

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