Apple dings Google with Bing

Apple has reportedly kicked off negotiations with Microsoft to replace Google as the default search engine on its popular iPhone.

According to BusinessWeek, the discussion over Bing reflects an “accelerating rivalry” between Apple and Google. Indeed, the two corporate behemoths have recently stepped up their competition in several markets, including the crowded mobile space.

For example, the Google Nexus One and accompanying Android operating system now contends with the iPhone and its native OS. 

“Apple and Google know the other is their primary enemy,” an anonymous source told BusinessWeek. “Microsoft is a pawn in that battle.” 

The source added that Apple was also working on a way to manage ad placement on its mobile devices, which could “encroach” on Google’s ad-serving business. 

Slash Lane of AppleInsider explains that Apple’s recent purchase of mobile advertising firm Quattro Wireless was “largely seen” as an effort to counter Google’s acquisition of ad firm AdMob.

“Last week, one report said that Apple co-founder Steve Jobs hopes to ‘overhaul ‘mobile advertising in the same way they had revolutionized music players and phones,” wrote Lane.

“Apple could offer developers the ability to place advertisements in their App Store software, and take a cut of the revenue much like Google already does.”

Clearly, a Bing agreement between Apple and Microsoft will undoubtedly help the latter gain market share in the rapidly expanding mobile search space. 

However, Peter Burrows and Cliff Edwards of BusinessWeek warn that an Apple-Bing deal “may prove” relatively short-lived.

“Given the importance of search and its tie to mobile advertising – and the iPhone maker’s desire to slow Google – Apple isn’t going to outsource the future.”