Free, ad-supported phones have long been a rumored endgame for Android, but the way that model ends up playing out may not happen the way everyone thought. mocoNews is citing "multiple sources who are familiar with the deals" in saying that Google has been sweetening the pot for both manufacturers and carriers of Android devices by tossing in a cut of the ad revenue generated from their services -- search, Maps, and the like. This would certainly explain Android's stratospheric rise through the ranks in carriers' lineups around the globe, and -- more importantly for consumers -- gives them more wiggle room to slap huge subsidies on handsets (assuming the trickle-down economic effect kicks in at all). For competitors, Google offers a unique value proposition here that can't really be met by anyone except perhaps Microsoft -- and with Redmond looking to reestablish its relevance in the mobile space this year more than any other in recent memory, we could definitely see the two sparring to line Verizon's and AT&T's pockets with the most green. Naturally, all the parties involved have clammed up -- no one's saying a peep about whether this is true, or to what extent -- but we certainly wouldn't be surprised.

Update: Google pinged us refuting this report, and even gave us a statement to match (in relation to the source material), which is as follows:
The article is not true. We share revenue on search, not on mobile applications. The same is true for non-Android devices that use Google as the default search engine.

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Google cutting in Android carriers, manufacturers on ad revenue? (update: not according to Google)