Google and Verizon have announced a sweeping deal to cooperate around the development of services and devices that use the Android mobile OS (maybe Chrome too) on the Verizon network. What this actually turns out to mean in practice remains to be seen — sweeping and “groundbreaking” deals with limited outcomes have been announced before — but it certainly means that in the US Verizon will be selling Android handsets. What’s striking about this announcement is that Google and Verizon at one time were trading relatively bitter accusations about the openness of mobile networks in the US, and Google bid against Verizon for 700MHz wireless spectrum.

Google also unsuccessfully competed against Microsoft for the Verizon wireless “default” search business. In addition to being motivated by revenue guarantees offered by Microsoft, Verizon’s rejection of Google as mobile search and ads provider was seen as part of the lingering animus between the companies. Microsoft’s win at Verizon was and is a big deal for Bing and adCenter. Yet on the day of the launch of Microsoft’s Windows Mobile 6.5 upgrade and a new push to regain momentum in an intensely competitive US smartphone market, Google has encroached on Microsoft’s relationship with the largest US mobile operator.

I won’t call it a “love triangle,” but Verizon seems to be playing the two companies against each other to a degree. Beyond the Android handset announcement (though no specific handsets have been announced) there’s this vague statement of  intent:

Integral to this agreement is a commitment by the companies to devote substantial resources to accelerate delivery of leading-edge innovation that will put unique applications in the hands of consumers quickly. The two industry leaders will create, market and distribute products and services, with Verizon Wireless also contributing the breadth of its nationwide distribution channels. Consumers will be able to purchase products resulting from the collaboration in Verizon Wireless retail and online stores.

So this could be tablets or netbooks using Android (or Chrome) beyond smartphones. But Android on Verizon both raises its profile and puts pressure on BlackBerry’s touch-screen Storm (or Storm 2) and Windows Mobile phones. The iPhone remains in its own category, but Windows Mobile and Android phones will be going head to head at the largest carriers for consumer attention and it will be a tough fight for Microsoft to win with 6.5.

Most interesting will be to see how Verizon’s search and ads deal with Microsoft plays out on Android handsets. The absence of a “carrier deck” on the Android handsets may allow Verizon to wiggle out of its obligation (as I understand it) to pre-install a Bing search box on all Verizon handsets. I’m guessing at that however.

Related Topics: Features: Analysis | Google: Mobile | Google: Partnerships

About The Author: Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling. See more articles by Greg Sterling