Microsoft Tries To Steal Google's Verizon Mobile Search Deal

In August, Verizon Wireless — soon to be the biggest mobile carrier in the U.S. — was reportedly close to signing a wide-ranging mobile search/advertising deal with Google (GOOG). But Microsoft (MSFT) isn’t ready to lay down and let Google steal the mobile search market. 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.

We wouldn’t want to get in the way of a bidding war between these two companies. But whoever offers more guaranteed revenue could wind up the winner.

Why? Because the mobile search market is still very theoretical. Few Americans — 9% of mobile subscribers — use search engines on their phones, according to comScore M:Metrics. (The vast majority of these choose Google.) That number will grow, but how fast? And how many years will it take before either company can monetise mobile search nearly as well as they do on PCs?

Another question: Let’s pretend Microsoft wins this one and mobile search catches on. Will mobile searchers — who already seem to prefer Google — even bother using the “default” Microsoft Live search engine?

Sure, it’s harder to navigate on a mobile phone browser than it is on a computer, so we assume “default” positioning is more important on mobile phones than on PCs. But if people prefer using Google on their PCs, will they settle for the easier, default Microsoft search on their phones? Or will they bookmark Google and go there instead? If so, that would give Google 100% of search revenue for those queries — and none to Microsoft or Verizon.

See Also:
Steve Ballmer Pretends Not To Understand Google Android Pricing Strategy
Verizon, Google Kiss And Make Up For Search Deal, But Where’s Android?
YouTube’s Mobile Ad Test Confirms Infant State Of Mobile Advertising Business

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