Google's Nexus One looked to follow in the success of Motorola's Droid (Milestone) Android smartphone.  It brought slightly improved hardware (courtesy of hardware partner HTC), special software attention from Google, and the possibility of picking from a variety of carriers.

Sales of the Nexus One were conducted exclusively through a new web store – and sales weren't very good.  In fact, Google as of March was estimated to have moved a mere 135,000 units in the three months since its January launch.

Now, as potentially superior competitors like the HTC Incredible (Verizon) and HTC EVO 4G (Sprint) storm the market, Google admits that choosing to sell the phone online was a mistake.  In a blog post, Google writes:

But, as with every innovation, some parts worked better than others. While the global adoption of the Android platform has exceeded our expectations, the web store has not. It’s remained a niche channel for early adopters, but it’s clear that many customers like a hands-on experience before buying a phone, and they also want a wide range of service plans to chose from. 

Google says that as a result of this realization, it will be phasing out the web store and trying to get retailers to sell the phone, which is currently available for AT&T and T-Mobile in the U.S.

Sprint announced on May 10 that it would not be carrying the Nexus One, despite earlier announcements that it would be carrying the device.  Along with Verizon's announcement that the phone is not coming to its network, it looks like the possibility of a CDMA Nexus One release may be dead.

No retailers have been announced yet, but likely candidates include Best Buy and Walmart.  Walmart back in January accidentally posted the phone on their site, but then stated that they had no plans to sell it.  

Despite the Nexus One's disappointing sales, the phone does have some fans.  Linux founder Linus Torvalds loves the phone and says that its the first smartphone he finds to be tolerable.  Hardware-wise it might not be the best, but it's still one of the best Android handsets on the market.