Google is working on a new search service for mobile phones that will be used to pay for and download digital content to users' handsets, according to reports.

The internet giant has already made mobile a key focus and has partnerships with groups including Vodafone, the UK's largest mobile operator.

It highlighted its suite of mobile applications — including search, mapping, news, e-mail and calendar services — in a recent press presentation.

According to The Wall Street Journal, the next step in Google’s mobile strategy will involve the company launching a mobile transaction service that will allow users to pay for pieces of mobile content, such as ringtones and specially formatted videos.

The payments service apparently would merge aspects of Google Checkout, the present web service that competes with eBay’s PayPal, and Froogle, Google’s products search engine.

Global sales of content, including music, video, and ringtones to mobiles, hit $27.4 billion last year, and are expected to reach $59.3 billion by 2011, according to Yankee Group, the consultancy.

With mobile advertising revenues forecast to grow eightfold in the next four years, to $11.5 billion (£5.8 billion), Google, Yahoo! and Microsoft, the leaders in web search, are all targeting the sector.

Yahoo! forecasts that more people will ultimately access the web through mobile phones than from desktop computers.

That trend could be accelerated by the launch of a new generation of smartphones — led by Apple's iPhone — that carry full-scale internet browsers.

The world's largest internet players are also jockeying for position in voice-activated search services as they strive to extend their reach beyond computers to mobile phones.

In April, Google unveiled a telephone-based service that allows users to dial a number and vocally request details for local businesses in American cities.

Google Voice Local Search uses voice-recognition technology to process queries and delivers answers using Google Maps.

The move came only weeks after Microsoft agreed to acquire Tellme Networks, a privately owned specialist in voice-recognition technology, for an estimated $800 million.

However, painfully slow download speeds and high costs — downloading a feature film could cost thousands of pounds at the rates offered at present in the UK — so far have put consumers off the mobile internet.

To counter that, internet groups have rushed to have their software pre-installed on mobile handsets as they seek to capture market share.

Microsoft has signed up LG Electronics, Toshiba and Hewlett-Packard to build handsets that would run on its Windows Mobile operating system.

Yahoo! has deals with Nokia, Motorola, RIM, HTC, LG and Samsung, the handset manufacturers, to have its software shipped on certain handsets.

Google, meanwhile, also has partnerships in place with groups including T-Mobile, Motorola, RIM, Vodafone, Sony Ericsson and Nokia.

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