Isabel Aguilera, Google's head in Spain and Portugal has confirmed that the search engine giant is working on a mobile phone. "Some of the time the engineers are dedicated to developing a mobile phone," Aguilera said on the Noticias.com, a Spanish website.

Google's Unites States division declined to comment on the movable phone issue. But the rumor is spreading like wildfire.

Earlier this month, Simeon Simeonov of Polaris Venture Partners wrote in his weblog that an inside source told him the Google Phone will be a BlackBerry-like device running C++ at the core with an operating system bootstrap and optimized Java and that it would offer voice over Internet Protocol.

Simeonov also wrote that rumors also circulated that that Google and Samsung were building a phone, code-named "Switch." Google and Samsung announced a partnership in January to bundle mobile versions of Google Maps, Google Search, and Gmail on certain Samsung phones. In addition, Google has on its payroll Andy Rubin. He is the founder of handheld device maker Danger who later started Android, a mobile-software maker that Google bought in 2005. In that same year, Google also acquired Reqwireless, a mobile-applications company. The company also has secretly acquired Skia, the maker of portable graphics engine that delivers 2D graphics on handhelds.