Google a Smaller Fish in Mobile World

SAN FRANCISCO -- In its quest for Internet domination, Google(GOOG Quote) has proved itself the king, at least on the desktop.

But on mobile devices, the fight for the throne continues, and Google finds itself battling Microsoft(MSFT Quote) for the crown.

Microsoft is reportedly in the final stages of negotiating a deal with Verizon(VZ Quote) to become the carrier's default search engine on all of its cell phones. Google has also been jockeying for a deal.

If Verizon chooses Microsoft, that would deal a big blow to Google in the mobile space, which many industry observers consider the Internet's next frontier. Verizon is positioned to become the largest carrier in the U.S. once it has acquired privately-held Alltel. The Federal Communications Commission recently approved the acquisition.

Just three months ago, Verizon was rumored to be sealing an agreement to make Google its default search engine. But according to a recent report in The Wall Street Journal, Microsoft came up with more favorable terms in which it would share with Verizon revenue from ads on Web search pages, with guaranteed payments to the carrier of about $550 million to $650 million over five years, or roughly double Google's offer.

Verizon spokesman Jeffrey Nelson would not comment on where the company stands with either Microsoft or Google.

"We aren't going to negotiate major business relationships in the media," he wrote in an email.