Microsoft (MSFT) Picks Google's (GOOG) Pocket

MsftMobile search is supposed to be the next big thing on the internet. Now that PC users have pretty much decided what search service they want to use, the war is moving to handsets. Microsoft (MSFT) and Yahoo! (YHOO) are desperate to make sure that Google (GOOG) does not move its 65% market share on the PC to mobile devices.

As a way to keep Google in check and pick up some business for itself, Microsoft is about to do a deal with Verizon (VZ), the second largest cellular carrier in the US with over 60 million subscribers.

According to Reuters, “Under the terms being considered, Microsoft would share with Verizon revenue from ads shown in response to cell phone Web searches, with guaranteed payments to the carrier of about $550 million to $650 million over five years, roughly twice what Google Inc offered”.

The trouble is that the money from Redmond will be wasted. Even an eight-year-old can reset the default search function on a handset browser. Since Google has the best search system and consumers are used to using it on their PCs, Microsoft may get very few new customers.

Microsoft is not going to ever be successful with it search product, at least not the way it works now. Google is a better product and nothing will turn people away from that.

Douglas A. McIntyre