Posted to Ben Finklea's blog on January 9th, 2009

Microsoft Wins Big

steveballmer_0.jpgMicrosoft pulls out over Google to be the default search engine for Verizon wireless handsets, ending the bloody battle to win advertising revenue from what is anticipated to be the largest U.S. cellular subscriber base. It was one of those fierce competitions that even a software giant like Microsoft was considered an underdog. But at the end of this showdown, unlike last night’s BCS National Championship Game, the underdog won.

Microsoft signed a five-year deal with Verizon that starts in the first half of 2009. Microsoft will provide the on-deck portal, as well as the local and internet search engine on the handsets of Verizon’s nearly 70 million customers. Microsoft will also provide mobile-advertising services on behalf of Verizon. The company announced the deal on the eve of the annual Consumer Electronics Show in Las Vegas, as Microsoft CEO Steve Ballmer (pictured here) took the stage for the show’s first keynote. This is a huge move for both Microsoft and Verizon, which is estimated that carriers pocket 60% to 70% of the advertising dollars and the software giant spiked the proverbial punch with revenue-sharing incentives.

In mobile search, Microsoft had yet to make a substantial move until this partnership. Microsoft did strike up an alliance with Sprint more than two years ago, but Google has since taken over as Sprint’s dominant search partner. I seriously doubt Microsoft forgot about Google’s burn with Sprint in the meetings for this deal. They also didn’t forget that Verizon is about to complete its merge with Alltel, and increase its subscriber base to exceed 80 million customers.

Microsoft will offer a suite of mobile functionalities through its Live Search app, including voice commands, location-aware searches, including directions, maps, traffic information and weather. These features are also very efficient ways to target users for advertisers with more precision. There will also be search results for news and entertainment content, and you will be able to download songs, videos and games.

This move provided a much needed boost for Microsoft to re-establish their position in search and new media. Search-related advertising is expected to balloon over the years, according to ABI Research, rising from $813 million in 2008 to $5 billion by 2013. New media will be making a mess of 2009, if your company is not prepared for it. Online video and mobile’s emergence in 2008 will only gather strength this year, so you may want to start that brainstorming session soon. If you want to come pick the brains of my Volacci team, give us a call. Volacci is very passionate about optimizing your search engine ranking, increasing your conversion rates, and maximizing your profit.

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