Email | Print    Type Size  -  +

Verizon: Microsoft beats Google

Microsoft, not Google, will be the default search provider for all phones on the Verizon Wireless.

Jessi Hempel, writer
January 8, 2009: 7:57 AM ET

Have stock market losses caused you to postpone retirement plans?
  • No
  • Yes, by a couple of years
  • Yes, by 5 years or more
  • I'll never be able to retire

LAS VEGAS (Fortune) -- Microsoft has beat out Google to become the default search provider on all phones on the Verizon Wireless network.

Steve Ballmer made the announcement to a packed hall as part of his keynote address at the 2009 Consumer Electronics Show in Las Vegas on Wednesday.

Starting in the first half of 2009, Microsoft (MSFT, Fortune 500) will power all search on Verizon Wireless devices and serve up the advertising.

The five-year deal is strategically critical to Microsoft, which didn't yet have a search deal in the United States. Competitor Yahoo (YHOO, Fortune 500) powers AT&T and T-Mobile and Google (GOOG, Fortune 500) is the search provider for Sprint. That's why Microsoft has fought so hard to wrangle the deal from the reigning search giant.

Last November, it was widely reported that Microsoft was offering guaranteed payments to the carrier of approximately $550 million to $650 million over five years.

Neither company is offering financial details about the deal, but it's clear the payments aren't the prize. As the smartphone market explodes, mobile cyberspace searches are set to grow.

Right now, only about 20% of cellphone users search, according to Nielsen Mobile. Citi analyst Mark Mahaney wrote in a recent report, however, that the market could grow to $2.3 billion by 2010.

With the completion of its Alltel acquisition this month, Verizon Wireless becomes the largest wireless provider in the United States, surpassing AT&T. And the company says 25% of its revenues come from wireless data - business-to-business data, multimedia services, and text messaging. Ballmer is hoping the deal will give Microsoft a leg up in the battle for control of the smartphone platform.

Then again, just because users land on a Microsoft search page when they open their browser doesn't mean they'll stay there. With 61% of current mobile search queries, Google already has a good deal of momentum, and users are conditioned from the web to begin most searches on

No matter the official search engine, they may very well go off-portal to plug the Web's de-facto front door - - into their browsers. To top of page

Company Price Change % Change
Yahoo! Inc 40.93 -1.16 -2.74%
Microsoft Corp 47.52 0.84 1.80%
Bank of America Corp... 16.95 -0.09 -0.53%
Oracle Corp 39.80 -1.75 -4.21%
Facebook Inc 77.91 0.91 1.18%
Data as of Sep 19
Index Last Change % Change
Dow 17,279.74 13.75 0.08%
Nasdaq 4,579.79 -13.64 -0.30%
S&P 500 2,010.40 -0.96 -0.05%
Treasuries 2.59 -0.04 -1.60%
Data as of 6:23am ET
More Galleries
2015 Mustang's asphalt-peeling power goes modern The new Ford Mustang has been upgraded and updated to compete globally - but never fear, it's still a monster. More
15 top executives with $1 salaries Some CEOs and founders agree to salaries of just $1 a year. But once goodies like bonuses and stock options are added in, some of those executives end up taking home many millions of dollars a year. More
Mercedes SL65 AMG: 621 horses of topless power Turn heads as you blow by traffic in this roadster convertible from Mercedes. More
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.