T-Mobile jilts Google for Yahoo oneSearch

Hours after announcing it rejected Microsoft's unsolicited $44.6 billion buyout bid on grounds that the offer "substantially undervalues" its worth, web services giant Yahoo significantly improved its position in the mobile web market, displacing rival Google as T-Mobile's exclusive mobile search services provider in the operator's northern and central European markets.

Announcing the deal Tuesday at Mobile World Congress here in Barcelona, T-Mobile said it will introduce Yahoo oneSearch at the end of March, with the two companies planning to develop a differentiated oneSearch experience optimized specifically for T-Mobile subscribers for future release. They also plan to collaborate on introducing T-Mobile incarnations of Yahoo services like Flickr, Yahoo Messenger, Yahoo Mail, Yahoo Weather and Yahoo Finance.

According to T-Mobile group products and innovation officer Christopher Schläffer, the T-Mobile/Yahoo partnership will emphasize what he called "federated search," a model emphasizing contextual responses culled from multiple sources, not just the web. "We're moving away from the web to something new," Schläffer said during Tuesday's press conference. "Federated search is about direct answers--mobile screens are too small to deal with links, so we're going to push the answers to the screen, [drawing on a] federation of content sources including content from the device portal, local search, and people and community search."

Marco Boerries, executive vice president of Yahoo's Connected Life unit, added "We're focused on giving answers, not web links. We try to find the user context and deliver the result. We're integrated at the operator level, so we understand location, and depending on the keyword and context, we can prepare just the right result. It's search designed with the mobile web in mind."

T-Mobile also announced a series of related items Tuesday, including an expansion of its web'n'walk mobile web portal to include services like YouTube, MySpace, Flickr and Bebo, as well as a European mobile IM service slated to offer access to Windows Live Messenger, ICQ, AOL Instant Messenger and Yahoo Messenger, which T-Mobile CEO Hamid Akhavan said collectively represent roughly 90 percent of the overall IM market. T-Mobile also said it plans to introduce Apple's iPhone to the Austrian market later this year, with a handset based on Google's fledgling Android OS scheduled to launch sometime in the fourth quarter. No doubt in response to EU Telecoms Commissioner Viviane Reding's recent vow to take action in response to concerns Europeans are paying too much for mobile data services outside their native country, T-Mobile also said it will introduce pan-European data roaming plans. Asked by a member of the audience whether the flat data pricing will generate a loss of revenue, Akhavan smiled and said "I hope not." -Jason

For more on the T-Mobile/Yahoo agreement:
-read this release

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