In a deal that would extend Google’s dominance of the mobile search market, reports hint that Verizon is close to inking a deal to make Google the default search engine on its mobile phones. This move comes as a surprise given the adversarial relationship between the two companies during the recent wireless spectrum auction and Google’s entrance into the mobile phone industry with the upcoming release of its Android handsets.
Mobile search is still a fledgling market, with projected spending of only $244 million in 2008. Mobile Internet usage has more than doubled in the last year and is expected to continue rapid growth. Combine those factors with the fact that Google already owns 63% of the mobile search market and it appears as though Google may have won the race before it even started.
Google inked a similar deal with Sprint-Nextel in May to become the default search option on 40 of its mobile phones in return for a share of the search revenue. These deals signal that the wireless companies are not confident of their ability to compete in the search market against Google. It also allows the network operators to tap into Google’s broad network of search advertisers.
One of the key issues that is rumored to be under negotiation is around search query data. Google wants access to information about mobile phone search queries to improve the quality of its search results. Verizon is reluctant to hand over such valuable market data about its customers. There is also the possibility of the deal expanding to include Google as the search provider for Verizon’s web properties as well as its FiOS TV.
The partners may seem like unlikely bedfellows after terse public statements around the wireless spectrum auction earlier in the year. Google has been lobbying for open access to some part of the wireless spectrum quite publicly even since losing its bid for a piece of the spectrum to Verizon and others. Google has also been making waves with carriers by announcing its plans to release open source handsets that would quickly erode the carriers’ control over the applications and service that their subscribers can access.