Verizon inks mobile search deal with Microsoft

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Verizon Wireless will forge a deal with Microsoft to include the software giant's Live Search as the default search portal on its new mobile phones, giving Microsoft a victory over rival Google and ending a months-long dance toward the partnership.

Microsoft CEO Steve Ballmer announced the deal in his keynote address at the Consumer Electronics Show in Las Vegas Wednesday night. Users will be able to download Microsoft Live Search to their phones to check traffic, movies times and other utilities.

Financial details of the deal, which will go into effect in the first half of 2009, have not been disclosed yet, but a report in The Wall Street Journal in November said the deal would include guaranteed payments to Verizon of anywhere between $500 million and $650 million over five years. Microsoft would reportedly share with Verizon revenue generated from ads shown alongside web searches. Verizon is poised to become the largest wireless carrier in the United States with the close of its acquisition of Alltel this week. When the deal closes it will have close to 80 million subscribers, surpassing AT&T Mobility.

The move is a strategic one for Microsoft in a few ways. The company beat out Google in the deal, which had also reportedly been angling to ink the deal with Verizon. It is also Microsoft's first mobile search deal. AT&T and T-Mobile USA use Yahoo, which Microsoft failed to acquire in 2008, as their dedicated search engine. Sprint Nextel uses Google. However, from what is known at this point, this deal does not mean that Verizon customers will be prevented from going outside the Live Search web portal to access other search engines.   

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