When it comes to technology companies, unusual pairings aren’t all that uncommon, but when it comes to deals between longtime rivals Microsoft and Apple, any sort of cooperation or deal raises eyebrows. Businessweek is reporting that Apple and Microsoft are in talks to make Bing the default search engine on the iPhone, citing two unnamed sources “familiar with the matter.” According to Businessweek, the possible pairing has to due with Apple feeling competitive pressure from Google, and wanting to sever the iPhone’s ties to Google as a search resource.
Ties between Apple and Google have historically been quite strong, although in recent years the two companies have begun competing directly in several areas. Google CEO Eric Schmidt left Apple’s board when the company announced it was going to launch its own Chrome operating system (Schmidt had already recused himself from matters involving the iPhone), and now Google has launched its own smartphone—sorry, “superphone”—which some say is the company’s first attempt at an “iPhone killer.” However, the companies still cooperate on many fronts, including bringing YouTube video and Google Maps to Apple devices (including the iPhone!), Google is the default search provider on Macintosh computers, and Google’s Chrome Web browser is built on the same open source base as Apple’s Safari—and Apple has been a major contributor to that technology.
It’s not clear how much mobile search traffic from the iPhone is worth to Google—or to Microsoft—but certainly the market for mobile advertising is expanding rapidly—as demonstrated by Google’s intention to purchase AdMob. The iPhone’s popularity also means it represents a substantial portion of mobile Web usage, both in North America as well as many international markets.
However, Microsoft’s CEO Steve Ballmer has historically been one of Apple’s greatest detractors. Ballmer has never had much good to say about the iPhone, and even reportedly took an iPhone out of an employee’s hands at a recent meeting and jokingly pretended to stomp on it when the employee tried to take Ballmer’s picture with the device. When the iPhone debuted, Baller famously predicted there was “no chance” the iPhone would develop any market share. Also, many of Bing’s top-flight services are being developed using Microsoft’s Silverlight technology, which—like Flash—doesn’t run on the iPhone, although Microsoft is working on a version of Silverlight 2 for Nokia S60 and Windows Mobile devices.
Apple and Microsoft have also been engaged in an escalating PR war in recent years, with Apple’s popular “I’m a Mac” campaign featuring John Hodgman as the embodiment of a Windows PC largely controlling the conversation—in fact, Microsoft’s ongoing “I’m a PC” campaign is almost entirely a response to the effectiveness of Apple’s promotions.