November 12th, 2008
Money talks: Microsoft edges closer to Verizon search deal
Microsoft is reportedly close to landing Verizon Wireless in a search deal at the expense of Google. Why? Money.
The Wall Street Journal reports Verizon Wireless is now favoring Microsoft over Google. The money paragraph (literally):
Under the terms now being considered, Microsoft would share revenue with Verizon from ads shown in response to cellphone Web searches, with guaranteed payments to the carrier of approximately $550 million to $650 million over five years, or roughly twice what Google offered, these people said. Separately, Microsoft is negotiating a deal to put its Windows Mobile software in more Verizon devices. The combined value of the two deals could top $1 billion.
Given the dollars involved it makes complete sense for Verizon Wireless to use Microsoft’s search. If the software giant is willing to pay for search share it won’t have a problem finding companies to help its cause. What’s more interesting is the Journal said it isn’t clear whether Microsoft is paying Verizon to use Windows Mobile or giving it away for free.
That latter point is very interesting since Microsoft may be trying to put Windows Mobile in more places since it’s clearly dated. Apple’s iPhone operating system, Google’s Android, Linux variants and RIM’s platform all make Windows Mobile look tired. Windows Mobile needs a refresh badly and Microsoft may be trying to buy it some time.
It remains to be seen how this Verizon-Microsoft deal plays out. Verizon Wireless appears to be negotiating through the Journal and coughing up those financial details tells Google where it needs to go. I wouldn’t count Google out just yet.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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