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Eric Auchard writes in Google CEO sees free mobile phones, funded by ads:

Web search leader Google Inc.’s chief executive, Eric Schmidt, sees a future where mobile phones are free to consumers who accept watching targeted forms of advertising.

Schmidt said on Saturday that as mobile phones become more like handheld computers and consumers spend as much as eight to 10 hours a day talking, texting and using the Web on these devices, advertising becomes a viable form of subsidy.

“Your mobile phone should be free,” Schmidt told Reuters. “It just makes sense that subsidies should increase” as advertising rises on mobile phones.

Schmidt was interviewed following a speech on the theme of business innovation organized by Italian student groups and the Graduate School of Business at Stanford University.