Microsoft nears Verizon search deal

Microsoft is getting closer to a deal to become the default search provider for Verizon Wireless, according to reports.

Microsoft could share advertising revenue with Verizon under terms being considered, with guaranteed payments to the mobile service provider of up to $650m over five years, or twice what Google was offering, according to people familiar with the deal.

Microsoft is also reportedly negotiating to put its Windows Mobile operating system on more Verizon devices. The combined deals are thought to be worth $1bn.

Reports that Microsoft was trying to hijack the Verizon deal from Google surfaced last week after Google bowed to federal regulators' opposition and killed its controversial advertising partnership with Yahoo. Microsoft showed its desire to move into Google's search territory earlier this year when it made a multibillion-dollar bid to buy Yahoo.

While mobile search is still a nascent market, Google controls the lion's share with 61 per cent, followed distantly by Yahoo with 18 per cent and Microsoft with 5 per cent, according to research company Nielsen.

Google's preoccupation with regulators over the Yahoo deal reportedly helped create the opening for Microsoft with Verizon.

The move comes as the two companies ramp up their efforts in the mobile arena. The first phone based on Google's Android mobile operating system--a challenger to Microsoft's Windows Mobile--recently went on sale.

Original article: Microsoft said closer to Verizon search deal from CNET News.com