Microsoft scored a big win in the mobile search and advertising space by snaring a 5-year deal with Verizon Wireless, soon to be the nation’s largest carrier based on subscribers.
Microsoft CEO Steve Ballmer announced the coup in his Wednesday night keynote at the Consumer Electronics Show (CES), although reports of the deal surfaced earlier in the day. Among the big three Internet search companies, Sprint works with Google, which also has a deal with Clearwire, and AT&T and T-Mobile USA use Yahoo!.
The Microsoft deal with Verizon appears to be a big vote of confidence in the mobile search and advertising space, in which several smaller companies play as well. The 5-year agreement goes into effect in the first half of this year, when Microsoft Live Search is targeted to be available on new Verizon Wireless feature phones and smartphones.
A Verizon representative said customers still will have all options for search by using Mobile Web and keying in their favorite search company. But the company believes Microsoft Live Search, customized for mobile, represents a “world-class” experience for customers.
With Live Search integrated, Verizon Wireless customers will have easier access to context-relevant search results to help improve the mobile experience, according to a Verizon press release. Depending on which device they use, customers will be able to use voice commands and typed queries and opt to use location-aware searches to receive search results, including maps, directions, traffic information, information on local businesses, movie theatres and show times, gas prices and weather.
Microsoft will manage search and display advertising as well on Verizon Wireless’ Mobile Web service, creating a 1-stop integrated way for advertisers and ad agencies to reach mobile consumers.
The companies did not provide financial terms related to the agreement. The Wall Street Journal reported that Microsoft plans to share revenue with Verizon from ads shown on Web searches, with expected guaranteed payments to the carrier of between $550 million and $650 million over the course of the five years.