At the Web 2.0 conference in New York, Google CEO Eric Schmidt told reporters that mobile phones should be free: "It just makes sense that subsidies should increase" as advertising rises on mobile phones. Schmidt admits phones may never become totally free for the consumer, at least not outside of Hong Kong, but advertising will drive down the costs substantially, as it did for newspapers. 

Google recently introduced AdWords for its mobile search service through which it is currently experimenting with delivering text, brand-image and video ads to mobile phones. Deployments with carriers in Japan have already provided the company with some success on the mobile platform. As we have noted before, the recent acquisition of YouTube has mobile implications, too--particularly if you consider Google's prior acquisition of video search company Neven Vision.

For more on Google's mobile plans:
- see this article from MSN