The Wall Street Journal-20080213-T-Mobile- Yahoo in Search Deal

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T-Mobile, Yahoo in Search Deal

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T-Mobile International AG said it will use Yahoo Inc.'s search service on the phones it sells, replacing Google Inc., in the latest development in the battle for mobile search by the Internet companies.

The deal will make Yahoo's oneSearch service available to T-Mobile's customers in 11 European countries. T-Mobile has the option to bring the service to its U.S. operation, though no decision has been made on that.

Hamid Akhavan, chief executive of T-Mobile, the wireless arm of Deutsche Telekom AG, said the Yahoo agreement will take effect April 1.

In an interview, Mr. Akhavan said his company had tested several search products over the past two years and found Yahoo a "better match with our technology."

The companies plan to bring other Yahoo services, such as Flickr photo sharing and Yahoo Finance, to T-Mobile subscribers. Yahoo had been pushing to get its services and accompanying advertising on mobile devices, which are increasingly coveted terrain for it and rival Google. Both companies have built mobile applications in an effort to win places on those devices, just as they have on personal computers, and to build advertising businesses there.

T-Mobile will continue to feature Google products such as YouTube and Gmail, Mr. Akhavan said.

The deal was announced a day after Yahoo rejected an unsolicited $45 billion offer by Microsoft Corp. for the online search provider MicrosoftCorp.'s unsolicited bid, currently valued at about $42 billion, saying it "substantially undervalues" the company. Microsoft responded by saying Yahoo's rejection didn't alter its view that the offer is "full and fair."

Separately, Mr. Akhavan said that T-Mobile has reached an agreement with Apple Inc. to introduce the iPhone in Austria and that he hopes to roll it out in other T-Mobile territories. But, he added, Apple will likely make a priority of some of the world's largest markets, such as India and China -- spots where T-Mobile isn't present.