Microsoft, elbowing aside Google, has clinched a search deal with Verizon Wireless, a top executive confirmed Wednesday.
Ivan Seidenberg, chief executive of Verizon, the majority owner of Verizon Wireless, said Microsoft CEO Steve Ballmer would make the announcement at tonight’s keynote at the Consumer Electronics Show in Las Vegas.
Speaking at the Citigroup Global Entertainment, Media and Telecommunications Conference in Phoenix, Arizona, Mr. Seidenberg offered no details on the deal, saying that he promised not to steal Mr. Ballmer’s thunder.
Microsoft had been grappling with Google for a revenue-sharing deal on advertisements triggered by searches by Verizon Wireless customers. The deal reportedly is worth more than a half billion over five years. Once Verizon Wireless completes its $5.9 billion acquisition of Alltel later this week, it will surpass AT&T and become the No. 1 U.S. carrier.
In a wide-ranging address, Mr. Seidenberg acknowledged that a shortage of the Storm handset, the first touch-screen Blackberry model, hindered its highly promoted launch during the holiday season.
“I don’t want to shove my partners under the bus,” he said, but “we didn’t have enough on the shelves.” Still, he termed it a “very successful” launch. The competing iPhone, has boosted Verizon rival AT&T, which has an exclusive contract to sell the Apple product.
Mr. Seidenberg said Verizon now has sufficient growth in wireless and in its FiOS Internet, video and voice services to offset losses in its legacy landline business. “The entire profile of the company has changed significantly in the last three years,” he said.
In particular, Mr. Seidenberg pointed to the boom in data services, such as text messaging. For example, he said that Verizon Wireless transmitted one billion text messages in the third quarter of 2003. In November of the following year, the carrier transmitted a billion in one week. In November 2008, a billion text messages were sent in one day.
“No one could have predicted the activity,” he added. “The amount of data traffic across our networks will be off the charts.”