Microsoft to Verizon: You! How Much for Your Mobile Search Business?
by John Paczkowski
Posted on November 12, 2008 at 8:16 AM PT
With Google (GOOG) already in control of about half of the developing market for mobile Internet searches in the U.S., according to comScore M:Metrics Inc., it’s little wonder that Microsoft (MSFT) is so aggressively pursuing a mobile search deal with Verizon Wireless (VZ).
Sources familiar with talks between the companies say the software giant is nearing an agreement that would make it, not Google, the default search provider on Verizon’s Internet-enabled phones. And to win that spot, Microsoft is offering the No. 2 wireless carrier an ad revenue share with guaranteed payments of approximately $550 million to $650 million over five years–roughly twice what rival Google offered.
Apparently, money’s no object when it comes to taking Verizon’s mobile search business away from Google. Nor should it be. After all, we are talking about a default search position on the phones of some 68 million wireless customers.
And Google has said quite publicly that its future earnings growth is in mobile advertising. “We can make more in mobile than desktop, eventually,” Google CEO Eric Schmidt said back in August. “The reason is because the mobile device is more targeted. Think about it: You carry your phone with you everywhere. It knows all about you. We can use that to do a very, very targeted ad. Over time, Google will make more money from mobile advertising.”
