Microsoft Inks Major Search Deals

Google might be the 800-pound gorilla of the Internet search market—with Yahoo a distant runner-up—but Microsoft seems to be willing to reach into its deep pockets in order to give both companies a little competition. Today, the Redmond software giant announced to new search deals that may help its competitive profile against both Google and Yahoo: Microsoft’s Live Search will be the default search provider for Verizone Wireless, and Dell will be pre-loading Windows Live Essentials—including Live Search—on the majority of its business and consumer PCs.

Microsoft’s deal with Verizon Wireless will go into effect in the first half of 2009, and make Windows Live Search the default search provider on Verizon Wireless devices for the next five years. The deal encompasses both Internet and local search, as well as mobile advertising. The deal gives Microsoft prominent placement on the home screens of Verizon Wireless devices; depending on the device, users may be able to search using voice commands, get maps and traffic information, details on local businesses and show times, and even ephemeral information like local gas prices and weather. The agreement also means Microsoft will be managing search and display advertising on Verizon’s mobile services, bolstering the Redmond company’s digital advertising business. Financial terms of the agreement were not disclosed, but industry watchers generally believe Microsoft is potentially taking a hit on the deal, relying on its cash reserves to give it a significant foothold in the mobile advertising world, and hoping revenue sharing agreements pay off in the long run.

Separately, Microsoft has announced a deal with computer maker Dell to bundle its newly released Windows Live Essentials on the majority of its its new consumer and business-oriented PCs around the world. Windows Live Essentials is a free suite of applications and tools focused on everyday online sharing and communications tasks, including email, photo sharing, online storage, and instant messaging. The deal also includes Windows Live Search, which Dell will also be bundling with its new PCs, giving Microsoft’s search services a footprint on most computers shipped from the world’s (currently) number-two computer maker. Again, financial terms of the deal were not disclosed.