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Sensing An Opening, Microsoft Moves to ‘Steal’ Verizon Search Deal From Google
The Wall Street Journal is reporting this morning that Microsoft is offering substantial financial incentives to “steal away” the mobile search relationship with Verizon from rival Google. Verizon is the US’s largest wireless carrier (given the recent approval of the Alltel acquisition) with more than 80 million subscribers.
According to the WSJ:
Microsoft has gotten the mobile carrier’s attention by offering a sweeter deal to put its search service and related advertising on Verizon phones. Microsoft is also offering more generous revenue sharing and a guarantee of substantially higher payments to Verizon, say people familiar with the matter.
Google has been in discussions for months with Verizon to make its search engine the default on most Verizon phones, according to these people.
The article suggests that Verizon is leaning toward accepting the Microsoft proposal. This would certainly be a coup for Microsoft and has the potential to increase its search volume and paid search revenues, as mobile becomes a more significant platform for search and advertising.
However, should Microsoft succeed in capturing the Verizon relationship, it wouldn’t shut out Google on Verizon handsets, especially smartphones. Google’s brand strength would continue to guarantee a substantial market share in mobile search.
Source: comScore (August, 2008), US mobile users.