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Microsoft (Nasdaq: MSFT) is flexing its muscles this week with strong moves against its rivals. The software giant on Monday released the Zune digital media player hoping to take a bite out of Apple (Nasdaq: AAPL). Three days later, the company inked a mobile search deal 
with Sprint Nextel (NYSE: S), leaving Google (Nasdaq: GOOG) out in the cold.
Microsoft may not have been first-to-market with a digital media player, but the company is the first of the three search titans to align with a major U.S. wireless carrier.
The strategic alliance between Microsoft and Sprint promises the development and delivery of a range of new services, starting with an initiative that lets its customers tap into Windows Live Search for mobile on their wireless phones.
Cell Phone Searching
Consumers can use the mobile search service to find location-based content on the Internet, such as nearby stores and restaurants. The service also provides new opportunities for targeted local advertising.
"In recent years, the search box has fundamentally changed the way people interact with the Internet, but we have only just begun to scratch the surface for what search and live Internet services can do in the mobile space," said Steve Berkowitz, senior vice president of the online services group at Microsoft.
Windows Live Search for mobile combines Microsoft Windows Live Local Search features, such as maps and directions, with capabilities that allow the indexing and discovery of relevant mobile content.
Here's how it works: Users type a keyword or phrase into the search box -- just as they would on the desktop -- and pull up location-based results.
For example, consumers who search for "sports" on their wireless phone can search all of Sprint's content relating to sports, including ringtones, wallpapers and applications with "sports" in the title. In addition, they can search for local information available online, such as business listings for sports stores, maps, directions and relevant advertisements from local businesses.
The location-based offering made available Thursday from Sprint and Microsoft requires users to input their location by entering their ZIP code, address, or city and state. Future versions of the service are planned to enable consumers to give permission to automatically locate them and show the nearest businesses that match their search.
One Hand Washes the Other
The alliance is a significant deal for both Microsoft and Sprint, according to Sterling Market Intelligence Principal Analyst Greg Sterling. Both parties stand to gain plenty in terms of market competition, he told TechNewsWorld.
"It's a coup for Microsoft to have Sprint in its corner and to distribute advertising through Sprint," Sterling noted. "Psychologically it also has value, because it shows some momentum for Microsoft. Microsoft's online market share for search has been incrementally declining, which has to be very discouraging for the company given all the effort it is putting into it."
The deal makes Microsoft more than a me-too third-place player in search, but it also gives Sprint -- the third place player in the wireless carrier market -- a leg up against rivals Cingular and Verizon.
"From a carrier standpoint, the conventional wisdom has [been] that carriers don't want to work with the search engines because they could be marginalized," Sterling said.
"Fears of being marginalized are going to take a back seat to competitiveness. Sprint wants some leverage in its battle against Cingular and Verizon, and it thinks Microsoft is going to offer that leverage."
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