Vodafone (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.
More after the jump
The new partnership could be a signal that Yahoo’s mobile group is still on track despite bigger problems at the broader Yahoo corporation, and despite a recent restructuring within the group that led to the departure of the long-time leader Marco Boerries. Yesterday, I caught up with Yahoo’s new mobile head David Ko, who emphasized the importance of these carrier partnerships. He said there’s about 1 billion computers worldwide and 3.5 billion cell phones. For many people, a person’s first Internet experience will happen on the PC, and therefore, it will be their natural inclination to use whatever search provider is embedded on the phone. Ko: “That
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