It’s been a year of rumors and intrigue for Verizon. Okay, maybe it’s not quite that dramatic, but there has been a little sturm-und-drang surrounding the soon-to-be-largest-in-the-US mobile carrier’s next mobile search deal. MSFT CEO Steve Ballmer is going to be announcing this tonight during his CES keynote, according to Verizon CEO Ivan Seidenberg—Verizon has chosen Microsoft to provide its mobile search.
“It’s certainly a feather in Microsoft’s cap. Tough news for Google and tougher news for Yahoo,” CCS Insight analyst John Jackson said of the agreement.
Verizon will pass AT&T to become the largest mobile network this week when their acquisition of Alltel closes. However the soon-to-be-number-one network decided not to go with either of the two most popular search engines in its mobile partnership.
In November, when the rumors about a deal with Microsoft surfaced, the reports indicated that the deal would involve revenue sharing for the two companies, with Verizon receiving a minimum payment:
Verizon would also be guaranteed payments of about $550 million to $650 million over five years—about twice what rival Google offered. In addition, Verizon could agree to use Microsoft’s mobile operating system in more of its phones, generating additional payments.
At the time, it also seemed likely that Google would make a higher and/or different bid to try to block the deal with Microsoft, as they apparently did with MSFT’s offer for Yahoo almost a year ago. (Please don’t tell me you’ve forgotten.)
However, Google proved to be ultimately unwilling to follow through with the legal hassles their Yahoo deal created and that deal failed in the end, as well. Maybe they did make a counter offer, or maybe they just wouldn’t raise their price, hoping that the superior relevance (or perceived relevance) of their results would be enough to swing a deal in their favor without the extra cash.
What do you think—is the deal better for Microsoft because they’re getting the deal, or because Google isn’t? Or perhaps none of the above?