The new chat service would allow users to talk with friends or ask questions of the chat bot, which would attempt to find answers from Google's vast map of the Internet, the newspaper said. The launch date isn't know.
Users can already do that to a certain extent with the voice search function built into Google's search box on mobile and the web. By saying "OK Google," users can ask questions in a number of areas and the service will report back an answer.
For example, "OK Google, what's on my TV" will listen for and match TV audio with a show currently on air. "OK Google, what's this song" will identify a song playing. "OK Google, what's the weather for tomorrow" will bring up a forecast and "OK Google, what's Apple trading at" will deliver a share price.
But the service is limited to certain queries and subjects. It appears that Google is looking to expand that with additional chatbots.
In November, it offered to buy 200 Labs, a startup that develops chat bots for various subjects, but the offer was rejected, reported the newspaper.
Instant messaging is an intensely competitive market. Facebook-owned WhatsApp is generally considered the leader followed by Facebook Messenger. Several regionally popular chat apps are also strong players including China's QQ and WeChat, Japan's Line, South Korea's KakaoTalk and also Skype, Viber, and Blackberry Messenger.