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TheStreet Open House

Could Yahoo! really poach iPhone search from Google?

Stocks in this article: AAPLMSFTYHOO

James Dennin, Kapitall: Marissa Mayer wants to make Yahoo! the default search on iPhones. Could the hardware giant be lured from Google?

Yahoo! CEO Marissa Mayer has done a pretty amazing job so far, by most reckonings. For one, there's straight-up stock performance: Yahoo! (YHOO) is still up 50% for the year despite the sell-off that started in late February/Early March. 

One of the main explanations for Yahoo!'s surge is the success of its many Asian assets, particularly Alibaba. Yahoo! owns a little more than 20% of the Chinese E-commerce giant, whose net income soared more than 100% this quarter. 

Yahoo!'s other assets didn't perform quite so well: figures held steady with last year. And mobile search revenues, which was Mayer's focus at Google (GOOGL) and a major investment of the company, are down. That might be about to change.

Yesterday Re/Code reported that Mayer has targeted Apple (AAPL) as a potential solution to make Yahoo! search relevant again. 

That's because at the moment, Yahoo! already works with Apple. You may have noticed the enthusiastic logo in the in-phone apps that give you your stock prices and weather. Mayer's apparently hoping to leverage that by going after the most lucrative part of the iPhone's real estate: the default search engine. 

Right now Google pays Apple a billion dollars a year to be the default search engine. People like it, generally, and the arrangement generates more advertising revenue for Google than the search engines on its own hardware. 

The question is, will Mayer be able to convince the tech giant to leave behind an arrangement, which, by most accounts, works pretty well? It'd be a big boon to the young CEO whose first initiative was to reorganize the company with a focus on mobile. 

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