Yahoo Loses Exclusive T-Mobile USA Search Deal To Google

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T-Mobile USA has ended its year-old exclusive search deal with Yahoo, and has replaced the company with its chief rival — Google (NSDQ: GOOG).

The deal shifts the U.S. mobile search dominance away from Yahoo and in favor of Google, which now works with two of the top four carriers. The hand-off between Yahoo and Google was completed as recently as Wednesday, and when visiting the T-Mobile portal from a BlackBerry today, it showed Google as the prominent search provider at the top of the screen — not Yahoo (NSDQ: YHOO).

A Yahoo spokesperson confirmed it was no longer working with T-Mobile for search, and a T-Mobile USA spokesperson declined to comment.

Sources say T-Mobile is also working with search provider Medio Systems, which typically indexes and returns results for content, including ringtones and wallpapers, unlike Google, which returns results for the web.

While Yahoo is no longer providing mobile search, a spokesperson said it is still working with the fourth-largest U.S. carrier on other content services, such as Yahoo! Mail, Messenger, News, Sports, Finance and Flickr. Yahoo also continues to work for T-Mobile International in Europe, and more than 80 carrier partnerships around the globe. The shake-up follows the discovery earlier this week that AT&T (NYSE: T) replaced Google with Yahoo on the Motorola (NYSE: MOT) BackFlip, a Google Android device. At the time, we wondered if T-Mobile USA would do the same for Android-based devices, but now that seems highly unlikely.

The pay-off for the often pricey alliances between carriers and search providers is still largely unknown. While carriers can make it easy for a consumer to use one search provider over another, they are still at liberty to visit the search provider of their choice from the mobile browser. Microsoft (NSDQ: MSFT) reportedly paid about $500 million to be the exclusive search provider on Verizon-branded phones. Yahoo continues to work with AT&T, and T-Mobile and Sprint (NYSE: S) now work with Google.

The deals can apparently also fall apart quickly, too. A year ago in November, T-Mobile USA and Yahoo made a big splash when their partnership was first unveiled. As part of it, T-Mobile revamped its entire portal strategy it calls web2go. Ironically, Yahoo first rolled out on T-Mobile in Europe, where it replaced Google. Since last year, Yahoo’s search was rolled out on most handsets, including feature phones, but not Android-based devices or Sidekicks.

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