Google, which reportedly has been talking with Verizon about making its search engine the default on most Verizon phones, better close the deal soon--and get it in writing. That's because The Wall Street Journal is reporting that Microsoft is attempting to pry the deal away.
"Microsoft has gotten the mobile carrier's attention by offering a sweeter deal to put its search service and related advertising on Verizon phones. Microsoft is also offering more generous revenue sharing and a guarantee of substantially higher payments to Verizon, say people familiar with the matter."
"Google has been in discussions for months with Verizon to make its search engine the default on most Verizon phones, according to these people."
If true, this comes straight out of the same playbook Microsoft used in the 1990s to gut Netscape. During the browser wars, Netscape struck a deal with America Online, at the time the leading online service provider. But Microsoft moved in quickly and negotiated a deal in which AOL made Microsoft's Internet Explorer its default browser in 1996. In return, Microsoft offered a promotional spot for AOL on the opening screen of all Windows-based computers. This was a huge deal at the time as it put IE in front of AOL's (then) approximately 5 million users.
What a magnificent bluff! After hearing about the outcome of the FCC's wireless spectrum auction (click for PDF), I have to marvel at the poker face Eric Schmidt assumed throughout the course of the last several months.
Android is such a cool name.
(Credit: Dan Farber/CNET News.com)Since Eric the Silent rarely talks about what really goes on inside the inner sanctum, I've saved you the trouble of the guesswork and conducted my own imaginary Q&A:
Q: Thanks for taking the time, Eric. Did you ever seriously think about building your own wireless network in case Google actually won part of the spectrum auction?
Imaginary Schmidt: Get serious.
It never entered into your thinking?
Imaginary Schmidt: Come on. Do you think we're so insane as to want to butt up against AT&T or Verizon?
Wasn't there at least a chance this could serve as a launching point for a new business out of Google?
Imaginary Schmidt: What are you smoking, pal? Our business is solid. We're all about developing apps, making money off of advertising, and causing Steve Ballmer agita. Bear Stearns or no Bear Stearns, we'll still make a bundle. Now, you explain to me why we should even consider taking on the expense of becoming a wireless operator.
But you did file an application with the FCC, didn't you?
Imaginary Schmidt: Glad you noticed.
Last year, when all this first broke, your lobbyists went to Washington and pressed the FCC to make sure there was open access. But you only convinced them to accept one of your proposals. Can you comment?
Imaginary Schmidt: Sure, we still came out ahead. The regulators required the winner--in this case, Verizon--to let any device (or app, I should add parenthetically) to connect to a network using this spectrum.
So, you're still feeling OK even though Google didn't win any licenses?
Imaginary Schmidt: It's all good.
I just wanted to go back to the reasons behind the original decision to bid the minimum $4.6 billion...
Imaginary Schmidt: Let me stop you there. It's very simple. The future's all about open-device and open-application rules. Steve Jobs may not understand that. I can tell you that Sergey, Larry, and I do.
When they look back at the last year, do you think people will say it was all a smoke screen?
Imaginary Schmidt: No. Maybe we could have leased spectrum to other service providers and let them build services. But who needed the headaches? Doesn't really matter what Verizon does with the C block. As long as it remains open to devices running the Android mobile platform, everything's cool.
In a way, though, you also opened the door for your rivals in the mobile business to make a big splash in mobile search and online advertising.
Imaginary Schmidt: We don't talk about the competition.
Yes, but you know the list--Microsoft, Yahoo, AOL...
Imaginary Schmidt: We're done here. Unless you wanna talk about health care.
- prev
- 1
- next
