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Nokia (NYSE: NOK) and Microsoft (Nasdaq: MSFT) said Thursday that they have sealed an agreement to incorporate Microsoft's Live Search capabilities into Nokia's Mobile Search platform, allowing consumers to access Microsoft's home-grown search engine directly from Nokia's N-series and compatible Series 60 software-equipped multimedia devices.
Live Search will be available in 14 languages for Web search on Nokia handsets. Microsoft will also provide access to stock quotes, movie times and information from Encarta Instant Answers.
Building From Scratch
While Nokia has been busy signing up big-name companies such as Yahoo (Nasdaq: YHOO) and Yell.com, a yellow pages directory provider, this is the first such deal 
for Microsoft, according to Nitesh Patel, senior analyst at Strategy Analytics.
It's important for Microsoft because "it provides Microsoft with another distribution channel for its search engine, and Microsoft is kind of coming from scratch in the search engine market," Patel told TechNewsWorld. Traditionally, Microsoft has relied on other companies for its search engine technology.
Whether the deal will make money for anyone is uncertain at this point. "Mobile search at this date is still in the very early days. In terms of potential revenue, the upside is not going to be huge," Patel said.
Revenue Generation
Search engine sites make money by selling relevant ad space that is served up with each search result. The price a search engine can charge advertisers depends upon the number of viewers for each advertisement. The more viewers, the higher the charge. The more outlets, the more viewers.
"The thing with the Internet advertising model is, it all depends on the number of eyeballs you can generate," Patel said. Mobile Search is available primarily on the N series of mobile phones, which are the mid- to high-end phones, a small portion of Nokia's handsets.
"People who want to use search engine facilities on their phones are still a very small minority today," Patel said. "It's a bit early to suggest that it's really going to benefit the consumer, but over time we'll see," he added.
Handset Leader
Nokia's Mobile Search application will be available in select markets in Nokia's N80 Internet Edition, the Nokia N73, N93, N70, N71, 6630, 6680 and 6681 models. It's also available as a free download for select Nokia S60 devices.
Nokia is the world's largest provider of handsets, with approximately 34 percent of global market share in the second quarter of 2006. The company shipped 78.4 million phones in that quarter, up by nearly 17 million phones from the year before.
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