The Wall Street Journal (WSJ) reports this week that Microsoft is close to securing a deal with Verizon Wireless that will see it become the default search provider on the US mobile operator’s devices. According to the report, which cites people familiar with the discussions, Microsoft is proposing a revenue sharing deal with Verizon based on displaying adverts relating to mobile web searches and has guaranteed payments to the operator of approximately US$550 million to US$650 million over five years. Sources say this figure is roughly twice what Internet search giant Google has offered Verizon in separate talks concerning a rival deal. According to previous reports, Google and Verizon have been talks for almost a year regarding a deal that would see a Google search bar included on the homescreen of all Verizon Wireless devices. The WSJ report said that Verizon is favouring the Microsoft deal due to the significantly better financial incentives but remains in discussions with Google.

The situation reflects the growing tendency of mobile operators to partner with large Internet players for search functionality rather than develop their own services. According to data published earlier this year by Nielsen Mobile, Google dominates the mobile search market with a 61 percent market share, followed by Yahoo (18 percent) and Microsoft (5 percent). Yahoo currently has a deal in place to act as the default search provider for Verizon rival AT&T.