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In a surprising move, T-Mobile has chosen Yahoo’s OneSearch search engine on its phones according to a Yahoo executive. Considering the relationship between Google and T-Mobile with the launch of the G1 – the first ever Android phone – you would expect Google to have somewhat of an inside track on the deal.
But as they say, business is business and Yahoo must have simply put a better offer on the table… right? Afterall, this deal will likely transcend MANY phones. Although no official statement has been given, you can assume the Yahoo search won’t become the G1 default search but nothing is guaranteed.
This would be a HUGE win for Yahoo. While Yahoo has deals with 26 mobile operators around the world which have 850 million subscribers, the companies real and perceived value has done nothing but plummet lately starting with a botched Microsoft takeover and hopefully for them, ending with the resignation of CEO Jerry Yang after the stock price dropped from $30+ to just over $9 in the span of a few months. Microsoft offered to buy the company for $30+ per share, a move that Yang and company rejected in a bluff gone bad.
While Google is (according to most) the dominantly better search engine, that doesn’t matter so much on mobile phones. Consumers are much less likely to download and use applications and extras on their mobile phones and are MUCH more likely to go with the default capabilities. Its the same reason Microsoft’s Internet Explorer has dominated the Browser Wars for so long… and that same initial real estate stakes era is occurring in the mobile world as we speak.
It looks as if Yahoo won this battle, but who will win the war? Remember that Microsoft is also in the process of stealing Verizon’s default search from underneath Google’s feet which would take 2 US based carriers off the table and leaving AT&T and Sprint.
Microsoft has Windows Mobile and Google has Android, giving these two giants anchors in what appears to be a period of turbulent growth. Economists are suggesting that a number of carriers and/or manufacturers will either be purchased, merge or close shop in the next 12 months and a large number of interesting scenarios could present themselves.
What would be the most interesting scenario? If you ask me, it would be Apple buying Yahoo… and at $10 a share, it seems to be a pretty good bargain.
[Via InfoWorld]
If T-Mobile somehow forces the G1 to use Yahoo! for searching… I’ll drop T-Mobile and go back to Verizon. I wont have it. Yahoo! is ancient news now… their search engine is simply inferior and I don’t want to have anything to do with it. I don’t care how much Yahoo! paid T-Mobile… this was a poor choice because consumers want Google for searching. That seems obvious… and in the end it should be in T-Mobile’s best interest to give it’s customers what they want.
Makes sense… google choose Apple over their own product for the voice search.
Sooooo…what happens when Yahoo goes under? Do they then run to Google for help?
In regards to leverage, carriers won’t allow themselves to become too dependent on any one vendor. This is doubly smart when dealing with a vendor as big and as ruthless as Google. If T-Mobile had gone with Google for search, it would have been a surprise.
We switched to Yahoo from Google last year (T-Mobile UK)
I have to agree somewhat with Eric…. One of the key factors in people purchasing the G1 at least in conversations I’ve had the reason is not just android but google overall… Honestly what is the point of total integration of google search/gmail etc… if you are forced to use an out dated and inferior search engine…. that is why yahoo isn’t doing well….. and to the comment regarding people not caring about mobile search or staying with what they are given like they did with IE that may have been true 3 years ago but with more wide spread use of 3g and capable phones including true internet browsing this will not last…. As to the comment that they do not want to limit to one vendor than they should allow you to choice your preferred search engine as you can in/with most browsers….
This was a gay move by yahoo. Like eric who commented before me. many of us came to tmobile because of google. Yahoo sucks. Apple and google are the best in their fields for reason. While yahoo has one foot in the grave. I think phil is right. If and when yahoo goes under they’ll probably go running back to google
How about: Apple buys Yahoo AND Sprint and launches an Iphone 4g this summer?
Who are these analysts who think there will be lots of M&A? I haven’t heard anything on that front, other than the recurring 10 year rumore DT and Sprint will merge.