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Report: Microsoft beats out Yahoo, Google on Verizon deal

Microsoft is close to announcing it has beat out Yahoo and Google in a coveted deal to be the search provider on Verizon phones, according to a Reuters story.

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto

Microsoft is preparing to announce Wednesday it has been selected as the search provider for Verizon mobile phones, beating out archrival Google and Yahoo, according to a Reuters report.

Yahoo shares spiked during mid-day trading as news surfaced that Verizon had chosen a mobile search provider, but then fell back to earth after the Microsoft disclosure.

There has been much speculation over the past year about who would sign the coveted search deal with Verizon, which is expected to overtake AT&T as the No. 1 U.S. carrier after Verizon closes on its purchase of Alltel, Reuters said. Increasingly, consumers and businesses are turning to their mobile phones as a means to interact with the Internet and advertisers are well aware of the trend.

Verizon CEO Ivan Seidenberg, revealed the carrier's search choice during a presentation at an investment conference, noting Microsoft's CEO Steve Ballmer is expected to make a similar announcement at the Consumer Electronics Show in Las Vegas.

Although Seidenberg did not delve into further details about the deal, it is expected to generate between $550 million to $650 million in guaranteed revenue a year.

For Yahoo and Google, the announcement is a blow to their mobile efforts.

Yahoo in November announced a deal with T-Mobile USA to power its search and mobile Web portal. And although Yahoo recently was able to extend its relationship with Verizon to provide its Web portal to computer users, it fell short in doing the same for Verizon's mobile customers.