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Microsoft may grab Verizon search deal from under Google's nose

By CAROLINE GABRIEL

Published: 10 November, 2008

READ MORE: Google | Verizon | Microsoft

Last week we saw Microsoft seeking to resuscitate the ailing Windows Mobile with a far reaching partnership with LG. Now it is pushing to get more influential mobile allies into its clutches, and is trying to oust Google from a valuable search deal with Verizon Wireless. It has also finally confirmed that there will be an interim upgrade to its mobile OS, release 6.5, before the delayed version 7.0, in a bid to restore confidence in its platform.

According to reports in the Wall Street Journal, Microsoft is revisiting its old strategy of pushing its OS and web services by getting close to operators rather than device makers. In August, Google was close to a deal with Verizon Wireless to get its search bar included as the default on the number one US operator's handsets, often gaining a coveted home screen position, which significantly boost mobile web usage.

Now Microsoft is reported to be trying to gazump its rival, by offering Verizon a larger share of advertising revenue from searches and a guarantee of higher payments. Verizon appears to be tempted by the offer, which reflects the sort of bartering that will become endemic across the mobile web world, with Google, Nokia, Apple and Microsoft fighting for pole position with the large cellcos. These operators will remain the primary channel for mobile web services and devices for many years, despite the impact of open access and direct-to-consumer offerings, and battles like this one show their continuing ability to influence the structure of the mobile value chain, even as they resist the pressure to become mere bitpipes.

Google is the default search partner for Sprint Nextel, and Yahoo for AT&T, the latter deal also a blow to the search leader, and making a Verizon win essential for US profile. T-Mobile works closely with Google since launching the first Android phone, G1.

Meanwhile, Windows Mobile 6.5, which has been long rumoured, appears to be a reality. Motorola co-CEO Sanjay Jha, a close Microsoft partner, blew the cover recently and hinted at the interim upgrade for the current release 6.1. Now Microsoft CEO Steve Ballmer has confirmed there will be a 6.5, and told last week's WinHEC developer conference: "With releases we'll make this year - releases we'll make with 6.5 next year, Windows Mobile 7, I think we have a pretty interesting roadmap." A key focus for the step upgrade is likely to be a more streamlined user interface, with handset makers like Sony Ericsson and HTC already improving on the basic Windows capabilities.

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