Bing Rumoured To Grab iPhone Search From Google

Apple and Microsoft are rumoured to be in talks over making Bing the default search engine on the iPhone. Two people familiar with the matter reportedly told BusinessWeek that the companies have been discussing the proposal for weeks.

Apple and Google have been adversaries in the smartphone market for some time. Last July Apple banned the Google Voice application, as well as third-party Google Voice applications, from its iPhone App Store – ostensibly because several of the Google Voice features compete directly with those in the iPhone.

Then in August, a report from researcher iSuppli suggested that the prickly relationship between Apple and Google was directly related to the continued rise of mobile data revenues. “Companies including Apple, Google, RIM, Nokia and Microsoft are trying to muscle in on the wireless carriers for a share of the lucrative and growing mobile premium content, service and application pies,” said iSuppli’s Jagdish Rebello at the time.

However, the rivalry between the two Silicon Valley giants has gathered pace in recent months, particularly since the launch of Google’s Nexus One smartphone – running on the Android operating system – which was billed by some commentators as an iPhone killer.

“Apple and Google know the other is their primary enemy,” one of the people familiar with Apple’s thinking told BusinessWeek. “Microsoft is now a pawn in that battle.”

Apple was contacted for comment on the search deal rumour but did not respond before the time of this article’s publication.

Becoming the default search engine on the iPhone could have significant benefits for Microsoft, potentially boosting both advertising revenue and market share. Bing’s mobile search share was only 11 percent in November, according to analyst firm Neilsen, compared to Google’s 86 percent. BusinessWeek suggests that Microsoft may even be willing to take a smaller cut of the revenue or pay a higher annual fee than Google does, in order to clinch the deal.

An alliance between old rivals Apple and Microsoft would be surprising, but not unprecedented. In the mid-1990s Apple was in dire financial straits and, had it not been for Microsoft building Mac versions of its Office suite, the company may have crashed and burned. When Apple co-founder Steve Jobs returned to the company in 1997, he extracted a promise from Microsoft that it would continue tp develop upgrades of Office for the Mac, in exchange for settling intellectual property infringement claims.

However, even if the rumours turn out to be true, an Apple-Bing deal would merely be an attempt by Apple to buy itself some time. “Apple isn’t going to outsource the future,” the insider told BusinessWeek.