This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Microsoft, Verizon Near Search Deal: Report

Stocks in this article: MSFT VZ VOD

Updated from 2:34 a.m. EST

Microsoft (MSFT) is moving closer to an agreement with Verizon Wireless to become the default search provider on the wireless carrier's cell phones, the Wall Street Journal reports.

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 (GOOG) offered, the Journal reports, citing people familiar with the discussions.

Microsoft is separately negotiating a deal to put its Windows Mobile software in more Verizon devices. The combined value of the two deals could top $1 billion, although it isn't clear if Microsoft is offering to pay Verizon to use Windows Mobile, or would allow Verizon to use the software for free, the newspaper reports.

Verizon is tilting toward Microsoft because the software giant is offering significantly better financial incentives, but the telecom company is still in discussions with Google and the situation is fluid with both companies, according to the newspaper.

Verizon Wireless is a joint venture of Verizon Communications (VZ) and Vodafone (VOD). In June, the company struck a deal to acquire privately held Alltel. The $28.1 million deal recently received approval from the Federal Communications Commission.

Verizon will join Alltel's subscriber base of approximately 14 million with its 70 million Verizon Wireless subscribers to surpass AT&T (T) and become the largest U.S. wireless carrier, which makes a deal extremely attractive for both Microsoft and Google. Verizon Wireless is currently second in the U.S. behind AT&T, which has nearly 75 million subscribers.

The fight for search engine supremacy on mobile phones isn't the first time Microsoft and Google have gone head to head. In October 2007, Microsoft outbid Google for a $240 million equity stake in social-networking Web site Facebook.

The two tech giants also have sparred on deals involving Yahoo! (YHOO), with Yahoo! rejecting a buyout bid from Microsoft as too low before seeing an advertising agreement with Google scuttled.

The use of search on mobile platforms is still in its infancy, although the proliferation of high-speed data networks has brought an increase in usage. According to comScore M:Metrics data for the month of September, more than 17 million wireless subscribers, or 7.7% of total users, accessed a Web search.

Google is the leader in mobile search, according to the data. Of those 17 million subscribers, 60.1% used Google for their search needs, compared to 36.4% for Yahoo! and 10.3% for Microsoft.

Shares of Microsoft were lately down 2.2% to $20.73. Verizon was losing 2.4% to $29. Google was off 2.6% $303.51.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs