E-Commerce Week #6

Business Week Online

Google Loses Verizon Mobile Search Deal to Microsoft-But How Big a Loss Is It?

Rob Hof

http://www.businessweek.com/the_thread/techbeat/archives/2009/01/google_loses_ve.html?chan=top+news_top+news+index+-+temp_technology

In the Business Week article, “Google Loses Verizon Mobile Search Deal to Microsoft-But How Big a Loss Is It?”, it talks about how this past week Microsoft’s CEO announced that Microsoft would be serving as the default search service for all the Verizon Wireless brand phones. Many believe that this announcement serves as a huge blow to the leader of desktop searches, Google. But in reality, whether it truly is a blow to the company, depends on how you look at it. Much of it will come down to how well the Microsoft services will work compatibly with all of the products Verizon Wireless has.

Aside from which search engine Verizon is going to work with, statistics themselves show that of twenty percent of mobile users who actually use search engines through their mobile devices, “60% of them use Google and only 6% use Microsoft”. Google already has set deals with Sprint, Nextel, and T-Mobile, but people who use other brands are still choosing to use Google as their default search engine.

Also, Microsoft acquisition of Verizon Wireless did not come without a steep price, it was $650 million in guaranteed payments to Verizon over a 5-year span, which is approximately double what Google offered to pay the company, and there’s no telling how the mobile search market will pan out in 5 years, or whether Microsoft will make any form of a profit. What I learned from this article, is the constant battle between major companies to outdo on another, and the amount of money they are willing to put on the line for that is huge. In this case, either Microsoft will surge above Google like they hope to, or they just set themselves up for a rough five years.