A method of providing a friend search service of a portable terminal is provided. The method includes transmitting, by a first portable terminal, a message for controlling a microphone of a second portable terminal to a contact server through a cellular network, outputting a sound including a first encryption key after transmitting the message, receiving a second encryption key from the second portable terminal through the cellular network, checking the second portable terminals existing in a sound-reaching area by comparing the first encryption key with the second encryption key, and displaying a friends list including the second portable terminals existing in the sound-reaching area.