T-Mobile dumps Google for Yahoo

T-Mobile announced on Tuesday that it will soon begin using Yahoo as its preferred mobile search provider in Europe, ending the operator's existing relationship with Google for mobile search.

The move was seen by many as a minor coup for Yahoo, which is competing with Google and Microsoft to win the loyalty of a growing number of mobile Internet users. Others noted that mobile search is in its infancy and said the field is still wide-open.

When T-Mobile signed its original deal with Google, it made headlines as one of the earliest partnerships between a mobile operator and a search provider.

"Well done Yahoo for knocking Google off the Web n Walk home page," wrote John Delaney, an analyst for Ovum, commenting on the announcement. Web n Walk is T-Mobile's mobile Internet offering.

Beginning in March, T-Mobile customers in 11 European countries will see Yahoo's mobile oneSearch by default on their phones. OneSearch is designed to make it easy for mobile users to get relevant search results and navigate through different categories within search results.

The companies plan to offer other Yahoo services to T-Mobile customers, including Flickr, Messenger, Mail, Weather and Finance. Yahoo now counts 29 operators around the world as oneSearch customers.

The deal appears to mark a strategy change at T-Mobile. When the operator launched Web n Walk, the service was designed to mimic the Web by minimizing T-Mobile branded services and prominently offering Google, Delaney said. Since then, it has evolved to add more T-Mobile services. It's not clear yet which strategy end-users prefer. "The risk is that T-Mobile will discover that its users really preferred it when T-Mobile gave them access to the Web, and then got out of their way," Delaney said.

While the T-Mobile/Yahoo deal is a blow to Google, the search giant had a significant mobile win of its own this week. Nokia announced on Tuesday that it will add Google search in addition to its own search offering on select phones. Nokia plans to extend the offering to more phones in the future.

Nokia has begun offering an increasing number of services, such as location-based maps and social-networking services, which could compete with offerings from operators. "Nokia is walking a bit of a fine line because they're definitely moving into what some consider carrier territory," said Mike Wolf, an analyst at ABI Research.

So far, the market for branded search services on mobile phones like those from Yahoo and Google is still wide-open, he said. The search providers are increasingly interested in mobile because there is strong growth in mobile Internet usage, he said. The iPhone is contributing to that as a device that aims to make the mobile Internet as similar as possible to the PC-based Internet.

Services from Yahoo and Google also compete with those that are branded by the operator. Companies like Medio specialize in offering technology to operators for branded search services. Operators in the U.S. have been more likely to use the self-branded option rather than partner with one of the online brands. AT&T, however, is one notable exception -- it uses Yahoo's oneSearch.

Success in the mobile Internet is important enough that Wolf believes that Yahoo's track record in the mobile market was a factor in Microsoft's decision to try to buy the search provider. "Mobile is probably at least a consideration in the acquisition attempt," he said.