Can Microsoft best Google on Verizon Wireless search deal?


A much-rumored mobile search partnership pairing Verizon Wireless and Google is in jeopardy after the web services giant's chief rival Microsoft reportedly pitched a sweeter deal to the mobile operator. In August, The Wall Street Journal reported on Verizon's plans to streamline its mobile search user experience by creating a one-stop, Google-branded search platform spanning from local information to mobile content acquisition; the proposed deal called for Verizon and Google to share advertising revenues, but several key details of the partnership remained sticking points, most notably Google's demands for access to consumer behavioral data. But now the WSJ contends Microsoft is seeking to capitalize on Google's preoccupation with its now-aborted advertising pact with Yahoo by approaching Verizon with a mobile search proposal of its own, promising the carrier an even larger share of resulting advertising revenue and a guarantee of substantially higher payments, according to sources close to the negotiations.

The WSJ report adds that Verizon Wireless is mulling both firms' offers and has not yet made a final decision, but the smart money favors Microsoft. However, with its Yahoo partnership in tatters, it seems logical to expect Google will now push even harder to secure the Verizon deal, although the search kingpin remains in the crosshairs of the Department of Justice, whose opposition to the Yahoo partnership raises serious questions about what kinds of search agreements Google may now pursue. For its part, Microsoft has been vocal in exploiting government concerns over Google's dominance of the search market--executives even called the Google/Yahoo partnership "illegal." But in an interview, Google CEO Eric Schmidt said the DOJ's interference in the Yahoo deal is "unlikely" to affect future decisions. "The particular issues around this one are fairly unique," he said. "I don't think it will change the way we do business. I don't know about perceptions."

For more on the Microsoft/Verizon Wireless negotiations:
- read this Wall Street Journal article

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