Apple in talks with Microsoft to replace Google search on iPhone

Apple is reportedly in negotiations with Microsoft to introduce the software giant's Bing service as the new default search engine on the iPhone, displacing Apple rival Google. Citing two sources familiar with the talks, Bloomberg reports Apple and Microsoft have been at the negotiating table for several weeks--the sources indicate the discussion is still ongoing and could fall apart. Among the talking points: How much of its search-related advertising revenues Microsoft would willing to share with Apple. In addition, one of the sources tells Bloomberg that Apple is exploring options to manage mobile ads displayed on its devices as it ramps up its efforts to challenge Google's core advertising business.

The Apple/Microsoft talks are the latest salvo in the increasingly intense rivalry between Apple and Google. On the heels of Google's late 2009 agreement [1] to purchase rival mobile advertising network AdMob for $750 million, multiple insider sources indicated Apple also was in talks to acquire AdMob, a defensive move to keep Google from obtaining inside information on the workings of its App Store. Apple ultimately responded by scooping up [2] mobile ad network Quattro Wireless for about $275 million. The competition again escalated in early January with the introduction of Google's Nexus One smartphone [3], the digital services giant's first move into Apple's signature hardware business.

For more on the Apple/Microsoft search talks:
- read this Bloomberg article [4]