AT&T (NYSE: T) is gearing up to launch the Motorola (NYSE: MOT) Backflip, its first Android device, on Sunday, and with it comes a little surprise: The Google-powered phone has been stripped of its flagship search engine, and instead comes loaded with Yahoo.
The removal of Google’s search by AT&T raises a few questions: Will all of AT&T’s Android devices default to Yahoo’s search engine? Will T-Mobile USA have to honor a similar agreement with Yahoo? (NSDQ: YHOO) And, will Verizon Wireless be forced to remove Google (NSDQ: GOOG) search in favor of its exclusive search provider, Microsoft’s Bing?
An AT&T spokesman confirmed that the carrier removed Google search from the phone, but added that other apps, like Gmail, Google Maps, Google Talk, Android Market and YouTube, remain. Engadget stumbled across this nugget of information when reviewing the device this week.
To be sure, the space has gotten complicated as carriers have signed contractual agreements with search providers, and then those search providers have rolled out mobile phones. One thing for certain is that if this continues to be the trend, Google’s business model may be at threat. After all, it gives the operating system for free with the hopes of making money from advertising on its various services, like search. Sprint (NYSE: S) is the only U.S. carrier that routinely integrates Google search into its devices.
AT&T did not say whether Google’s search would be stripped from upcoming Android devices, including the four additional ones planned for this year. Obviously, there’s some exceptions like the iPhone.
It’s unclear if T-Mobile will ever have to do the same. It’s been about two years since T-Mobile USA launched its first Google phone, and it has yet to replace Google’s search with Yahoo—despite having a similar exclusive partnership. A T-Mobile spokesman was noncommittal: “T-Mobile hasn’t announced any changes. Google continues to be our search partner on Android devices.” UPDATE: Yahoo issued the following statement: “We are happy that AT&T has chosen Yahoo! Search as the default mobile search service on the Motorola Backflip, AT&T’s first Android device. We have a long-standing relationship with AT&T and more than 80 carrier partnerships around the world…”
Another question is whether Verizon Wireless will also be required to replace Google? Last year, Microsoft (NSDQ: MSFT) paid millions of dollars for the exclusive right to manage mobile search and advertising on Verizon’s handsets. While Bing has been installed on several phones, including BlackBerry devices, Verizon’s Motorola Droid and HTC Droid Eris, still have Google’s search bar intact. We are still waiting for a comment from Verizon to see if that will change.
What’s more is this subject is likely to raise its ugly head again when Microsoft launches Windows Phone 7 later this year. The new OS could potentially create a conflict for AT&T and T-Mobile—but not Verizon. Of course, this pattern is also replicated worldwide with Yahoo, in particular, having dozens of agreements with carriers on a global basis. However, these headaches may only be short-term: The contracts will eventually expire, and may never be renewed. And, the most obvious option is for consumers to side-step all of the fuss by going to the browser directly and typing in the search engine of their choice.
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