Google Wins the Verizon Wireless Sweepstakes

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Includes: GOOG, VZ
by: Sam Gustin

It's good to be the (search) king.

When it comes to Web search, size matters. Verizon (NYSE:VZ) is close to picking Google (NASDAQ:GOOG) for mobile search after considering rival offerings, including from Microsoft (NASDAQ:MSFT), because it concluded that people now "reflexively" use Google for search, according to the Wall Street Journal.

For Google the pact would be a big win for the Web giant as it eyes the cell phone market.

Google has made no secret of its desire to move into the mobile space. Just last week, Google chief executive Eric Schmidt predicted that the mobile market could be more lucrative than its existing desktop-based Web search franchise.

"We can make more money on mobile than we do on the desktop, eventually," Schmidt said.

Nearly a year ago, the company announced its intention to enter the cell phone business with Android, the open-source mobile operating system. That effort will soon bear fruit, with HTC's Android-powered cell-phone, known as "Dream," which is set to be offered by T-Mobile. Google hopes to serve targeted advertising to mobile users tailored to their interests and location.

As part of the Android push, Google announced the Open Handset Alliance, a consortium of industry players, including Sprint Nextel (NYSE:S), T-Moblie, Samsung, Motorola (MOT), LG, and HTC. But Verizon Wireless was conspicuously missing from the alliance.

At a minimum, a Google pact with Verizon would signal a thawing in relations between the two companies, which have sparred bitterly in recent years over Net neutrality and the rules governing the F.C.C.'s recent wireless spectrum auction.

At a maximum, the deal could pave the way for for the cell phone giant to jump on board the Android bandwagon, giving a big shot in the arm to Google's mobile efforts.

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