Will Verizon Give in to Google on Mobile Search?

Updated: I was mildly surprised by the news reported in the Wall Street Journal this morning that Google was in talks with Verizon Wireless to get its search bar embedded on the home screen of Verizon’s phones. Google would love such a deal — the company already has a similar one for some Sprint phones, and it saw significant increases in the use of its search engine on mobiles once people downloaded the search bar to their devices. It also sped up Internet search and made phone subscribers more likely to use their data plans.

Those are positives for both Google and Verizon, which has the most robust 3G network in the country. However it appears that Verizon is stuck on the same issue that surprised me about the deal: the ability for Google to save information from searches. Google stores requests generated on PCs for 18 months; the same practice would be extended to mobile devices. Today, Verizon’s primary value (after the network itself) is its locked-in subscriber base, but in a few years after it opens its network, that advantage might erode. Aside from any personal privacy concerns, the information Google plans to store is what Verizon could one day find most valuable.

But in exchange for a cut of the Google ad revenue, Verizon may cave. Carriers are trying to figure out how to avoid being “dumb pipes” and get a hand in the lucrative content and advertising plays out there. I do find it hard to believe that Verizon would roll over on a deal with the company that caused it such angst during the 700 MHz auction, but perhaps the lure of mobile search dollars is too strong.

Update: We got some data from Nielsen talking about the mobile search habits of U.S subscribers and those from Verizon in particular (for data on mobile search ad spending, check out my comment below). Nielsen estimates that at least 50 million U.S. mobile subscribers search for things using their phone, and Verizon Wireless subscribers make up 26 percent of the active mobile search market.

A Google search bar would appear to help Verizon subscribers search faster and perhaps more frequently. Eleven percent of Verizon data users use the carrier’s portal to navigate to search, while 9 percent of Verizon data users go to the web to search. Only 6 percent of Verizon data users search through a branded carrier portal.

image of search bar on the Blackjack phone courtesy of Google