Posted January 7, 2009 5:15 pm by with 27 comments

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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.

Over the last few months, there have been rumors that Google or Microsoft would be the pick, but not so much for Yahoo. As one analyst told Reuters:

“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?

  • Microsoft is clearly the winner. Google gets nothing more than a black-eye. The real losers are Verizon customers. 😉

  • This makes me wonder what kind of impact this will have on Verizon’s decision to release an Android based phone in the future.

    Mike Wilton’s last blog post..Signal To Noise

  • Bad move Verizon…bad move.

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  • The idea of releasing an Android based phone seems quite new to me.

  • Lol, I feel sorry for the verizon customers! But I think i should at least say, well done Microsoft!

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  • Some good news for Microsoft! I just wonder if it actually is good news for Verizon though….are they not aware of the popular term “..just Google it….”?

  • Dean

    Doesn’t surprise me as Verizon has a history of going for the most lucrative deal not necessarily the right deal.

    Just another reason to jump to the iPhone and AT&T.

  • And why not? Good deal for both sides.

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  • I’m with Andy on this one that Verizon customers are the real losers. I am just looking forward to seeing new Alltel commercials and whether they will still be featuring a Verizon dork to make fun of.

    Patrick’s last blog post..Pays to Live Green Up for 6 Months!!!

  • Well, I don’t think that Google NEEDS the deal. And if Google didn’t think that the deal was worth the money that Microsoft offered, there was probably a good reason.

    Microsoft has been in a downward spiral for quite some time. It appears that it thinks that mobile devices will stop it from losing its steadily eroded market share… Good luck Microsoft.

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  • agreed Andy
    the fact that Google didn’t get picked makes them look really bad (well..)

  • Dean

    @Nicole Good deal for both sides? That’s the point. Good deal for Verizon (they get a boatload of money) and good deal for MSFT (they don’t get shut out of mobile search) Unfortunately their is a 3rd side, the customers, who will ultimately suffer.

  • Android based phone ! very odd for me and new of course.

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  • PS3

    What exactly has MS done to deserve all the negativity? How exactly will their customers lose out here?

  • Today I’am inclined to think that Microsoft is the winner with the bigger degree of confidence.

  • Those two companies should just stay together. The Moto Q is a horrible phone.

  • Personally, I would have gone with Google.

  • Good move for Microsoft, bad news for Verizon users who would have been better off with Google 🙂

  • where should they both go to?

  • Bugger!! Verizon, what were you thinking?
    I think it’s a great deal for Microsoft (mostly because they beat Google) an alright deal for Verizon (Great in the short term, but not so much in the long term), and a horrible deal for The customers!!

    @PS3: Um…. have you ever used Microsoft products??

  • It is not so good for Verizon customers. However Microsoft deserves praise. As for Google, if it needed the deal indeed it would get it for sure.

  • PS3

    Great in the short term, but not so much in the long term

  • it seems microsoft is getting into consideration and giving their full force to maximize their search

    John’s last blog post..Busby SEO Test the hard way

  • @John: They have to do something, Google (considering the upstart it is compared to MS) is trouncing them and making them look bad in everyway… if MicroSoft doesn’t turn things around soon their liable to sink fast

  • good deal if i may comment

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  • Wow, I am interested to see how that works. There must be some incentives attached I would assume because Google obviously has a larger advertising base.

  • this is something new to me