Microsoft Nearing Search Deal with Verizon?

Reports have Microsoft close to inking a deal with Verizon to make its Live Search the default Internet search service for Verizon cell phones.

If industry reports are to be believed, we’re starting to see some of Microsoft’s multi-pronged strategy to ratchet up search competition with Google in the wake of its failed takeover offer for Yahoo earlier this year. According to the Wall Street Journal (subscription required) and other sources, Microsoft is close to inking a deal with Verizon Wireless to make its Live Search Internet search service the default search for Verizon mobile phones. If the deal goes through, it would be seen as something of a defeat for Google, which has also been lobbying hard to land the default search spot on Verizon handsets.

Some reports have Microsoft offering Verizon a revenue sharing arrangement on money earned from advertisements shown alongside mobile search results; although different reports have different takes on possible revenue arrangements, Microsoft seems to be guaranteeing Verizon a minimum of $500 million over a period of five years…and most industry watchers agree that’s far more than what Google offered the mobile carrier.

Sources close to Verizon indicate the company hasn’t made any decision on a mobile search provider, and negotiations are still active with both Google and Microsoft.

Microsoft may have some additional leverage to bring to the table besides cold, hard cash: the company is separately negotiating an agreement for Verizon Wireless to offer more devices based on Microsoft’s Windows Mobile platform. The Wall Street Journal indicates there’s a possibility Microsoft might let Verizon put Windows Mobile on devices for free, or even pay the carrier to use Windows Mobile.