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Vodafone (NYSE: VOD) may be close to picking Yahoo (NSDQ: YHOO) as its default mobile search provider in Europe after its current contract w…

imageVodafone (NYSE: VOD) may be close to picking Yahoo (NSDQ: YHOO) as its default mobile search provider in Europe after its current contract with Google (NSDQ: GOOG) expires this year, according to people familar with the talks, Bloomberg reports. The deal would be substantial for Yahoo, which already reaches 850 million wireless subscribers through partnerships with 70 operators and OEMs worldwide. A yahoo spokesman declined to comment on the rumor, as did a Vodafone spokesman. The deal has yet to be finalized and other providers are still in the running, according to the same sources.

The deal sounds like many others, in which the search provider becomes the default search engine on phones in hopes of gaining customers by providing an easy user experience, but doesn’t prohibit the user from browsing directly to the competition. In the U.S., Yahoo serves AT&T (NYSE: T) and T-Mobile USA. Google works with Sprint (NYSE: S) Nextel, and more recently, Microsoft (NSDQ: MSFT) won the contract with Verizon Wireless (NYSE: VZ) (which is partly owned by Vodafone). In Europe, Yahoo has such relationships with operators including T-Mobile and Telefonica’s O2 unit, and may have an advantage with Vodafone since it already sells advertising on its handsets in the U.K.

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  1. Sounds good. Search provider is the default provider, gains customers, and allows use of the competition.

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