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Quick Hits: Verizon Chooses Microsoft Over Google?

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Brief scrutiny of today's headlines.

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Microsoft (MSFT) appears to be close to an agreement with Verizon (VZ) to become the default search provider on the carrier's cell phones.

Google (GOOG) is also in the mix, but it appears Microsoft is willing to guarantee Verizon $550 million to $650 million over 5 years, or about twice what Google has offered, the Wall Street Journal reports.

Becoming the default search provider on new smartphones is potentially lucrative - if users stick with using the default provider. But as surfing the Internet has become increasingly easier on smartphones, users always have the option to pick any search engine they prefer.

The bet is most users will stick with the default provider, because the icon will be prominently displayed, but tech-savvy users may simply set up their phones differently, undercutting the deals now being negotiated.

Searching the Internet via a cellphone is still new and only about 7.7% of wireless users, or about 17.6 million people, tapped into the Internet via mobile phone browsers in September.

So far, Google has about 60% of the new market while Yahoo (YHOO) claims about 36%.

Verizon is leaning toward Microsoft as the default provider because the software maker offers better financial incentives than the competition. But Microsoft is seen as a lummox among geeks and many users may shun it.

AT&T (T) plans to make Yahoo the default search engine on its Media Net Web Portal. Google has a search and advertising partnership with Sprint Nextel (S).

Do most people care which company is behind the search as long as the requested information is presented quickly and accurately? Probably not, and that would tip the equation toward the carriers. But that's a huge risk to take, given the individuality – a polite word for orneriness – of consumers and the large sums of money involved.
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