Verizon Wireless and Google, two industry Goliaths that have seen each other as potential rivals, are discussing a partnership that would give Google’s search service a prominent spot on the screens of Verizon phones, people briefed on the talks said.
The discussions are being spurred by the growing popularity of sophisticated devices like the iPhone that have simplified Web searching on mobile phones. New phones like those based on Google’s Android software, and models coming from Research in Motion and others, are likely to accelerate the trend.
Any partnership deal between the two is more than a month away, perhaps two, as the talks are in an early phase, said people apprised of the discussions. They are negotiating over how much information Google can retain about Verizon’s customers and their searches, the sources said. The two companies would share revenue from advertising that is tied to searches.
Carriers like Verizon have tried to promote their own branded search services on their phones, but these have not gained traction with consumers.
“There is demand for Google search despite what the carriers put in front of them,” said Roger Entner, a telecommunications analyst at Nielsen IAG, a market research firm. “Consumers want brand names they know.”
The two companies have also discussed a broader partnership that could range from joining forces on public policy issues to featuring content from Google on other Verizon services, including Internet access and FiOS TV. Representatives for the companies declined to comment. The talks were first reported in the Wall Street Journal.
Google and its rivals have been working to secure deals with carriers and handset-makers in hopes of gaining a foothold in a market that is small, but growing fast. Of the 36 million Verizon Wireless customers who access data using their phones, about 13.1 million search the Web, say estimates from Nielsen Mobile, which tracks wireless trends. (Verizon has 68.7 million customers overall.)
About 3.8 million of Verizon’s customers use the network to access a search engine like Google or Yahoo, Nielsen said. Significantly fewer customers — 2.3 million — use the most prominent search tool on Verizon’s phones, which bears its own brand.
“That battle may be lost,” said Rajeev Chand, an analyst at Rutberg & Co.
Some carriers have resisted working with search engine companies because they fear those companies will take a large portion of the revenue that is expected to come from mobile advertising. And as the race among carriers has become more competitive, they are also wary about giving information about their customers to new business partners who could later become foes.
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