Verizon Wireless has signed a deal with Google to co-develop two Android smartphones, says eWEEK. In other Android developments, further rumors about a Motorola Sholes phone heading for Verizon have emerged, an HTC "Dragon" phone using Qualcomm's Snapdragon was tipped, and Google announced improved "AdSense" advertising for smartphones.

A Google executive has stated that Android 2.2 is not optimized for tablet computers, and that in particular, Android Market will not run properly on tablets. Meanwhile, the Android 2.2 based Samsung Galaxy Tab tablet will be offered by Verizon Wireless, AT&T, and Sprint, say reports.

Verizon Wireless is throwing its support behind mobile Linux, becoming the first U.S. operator to join the LiMo Foundation, a group developing mobile Linux technology.

Motorola posted and then removed specs for its Verizon-destined, Android-based "Droid" phone, says eWEEK. Meanwhile, Motorola "Calgary" and "Zeppelin" Android phones have been tipped, T-Mobile launched Huawei's Android-based "Pulse" phone in the UK, an HTC Desire photo has appeared, and HTC released source code for the Hero, say various reports.

The Droid, the smartphone released Nov. 6 through a partnership between Motorola, Google and Verizon Wireless, has significantly outpaced other Android handsets in first-week sales, according to one analytics firm -- which said the feat makes the Droid the first viable iPhone challenger.

Verizon last month joined the LiMo Foundation, an organization that advocates for open mobile phone handset technology using Mobile Linux. As a core member of LiMo, Verizon hopes to lower the development costs of mobile phone designs across the industry.

The delayed Android 2.1 update for the Motorola Droid is starting to tarnish the successful launch of Verizon's first smartphone to run on Google's open source mobile operating system, according to posts at Motorola's Facebook page.

All Android phones sold in the U.S. will be eligible for an Android 2.1 update, although some older phones may need to be wiped first, says an industry report. Meanwhile another report says Google's Nexus One is heading to Verizon on Mar. 23, and an AdMob study explores Android users.

Google will give $10 million to the developers who build the best applications for Android, the open source platform Google designed for building mobile phones. Google says it hopes to spark innovation with the so-called Android Developer Challenge, announced today concurrently with the release of Android. The software development kit is now available for download on the Android site.