Microsoft Squeezes Verizon To Obtain Value From Lackluster Search Deal

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The clock is quickly running down on a five-year exclusive mobile search deal that Microsoft (NSDQ: MSFT) signed with Verizon Wireless, thinking it would gain a healthy chunk of the market.

However, the already two-year-old deal did not anticipate the extent that Verizon would adopt the Android operating system, and as a result, the WSJ reports today that Microsoft does not have the right to replace Google’s own search engine on phones powered by Google’s Android software. But Microsoft is now pushing Verizon to embed Bing into those phones going forward to extract more value out of the partnership that Microsoft paid an estimated half-billion dollars for.

It’s hard not for Verizon to want to use Google’s own search because it gets a cut of the ad revenues, but increasingly, Bing is expected to start making an appearance on Verizon’s Android phones. So far, only one of the eight Android phones has Bing, but that Bing will be featured on seven new Android phones scheduled to come out on Verizon this fall. The first is Samsung’s Fascinate, which was released in stores last week. The devices that do feature Bing will not be Verizon’s flagship Android devices that get the “Droid” brand. In all cases, users can opt to switch back to Google’s search engine, according to a Verizon spokesman.

Verizon’s deal has helped Microsoft gain a foothold in mobile search. It says that the partnership has helped the volume of mobile searches on Bing more than triple over the past year. “It’s a long-term strategic deal for us,” a company spokesman said. “It will continue to be one of the most important things we’re doing here at Bing in terms of mobile search.”

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