Vodafone eyes quick exit from mobile search deal with Google

Vodafone is understood to be close to pulling out of a three-year deal it signed with Google in February to make the search engine available on its phones.

Sources say the mobile giant is looking at ways it can pull out of the agreement, and instead wants to use a white-label platform that it could brand with the Vodafone name.

The two companies are yet to unveil any products seven months after signing the deal and an industry source suggests Vodafone fears it has “given too much away”. It is thought Google receives half the revenue from keyword searches and at least some of the associated advertising revenues generated.

A Vodafone insider admits it has taken “longer than we had hoped” but insists that the two companies will launch services in the early part of next year. Google’s product management director Deep Nishar, who is responsible for mobile at the company, says it is committed to the partnership.

Google has a similar agreement with T-Mobile’s Web’n’Walk service, while rival Yahoo! is thought to have clinched a deal with Orange. T-Mobile customers are directed straight to Google’s homepage when they click on its icon on their phones.

Many of the leading dotcom players already have standalone mobile-accessible portals. Yahoo!, which also signed a deal to offer its services to 3 customers in June, has a mobile version of its portal operating in the UK.

When Google announced the deal with Vodafone at the 3GSM conference in February, industry experts predicted that the mobile internet would be dominated by the major search engines.

But recently their smaller rivals have sensed an opportunity because of a growing feeling that the operators are reluctant to allow the likes of Google the same control as they do on the Web.

Some analysts believe the operators do not want to give away space on small mobile phone screens to rival brands, while others point out that Google could one day become a rival to Vodafone if it launches as a mobile virtual network operator, as has been suggested.

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