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Could the epic rivalry between Apple and Microsoft be coming to an end? A new Business Week report suggests that Apple has bigger fish to fry and will team up with its former arch-rival to fend off Google's growing influence. In a potential blow to Google, Apple is negotiating a deal with Microsoft to make its search engine Bing the default engine on the iPhone instead of Google.

If the deal goes through, Microsoft will be collecting revenue from ads placed alongside search results. Is this the beginning of a new, powerful alliance against the search behemoth? The team-up has been rumored for a while and Apple's antipathy toward Google has grown. While Business Week advances the idea, Tom Foremski, a longtime Silicon Valley reporter pooh-poohs it. Here are their arguments:

  • Apple's Newest Ally  Peter Burrows and Cliff Edwards at Business Week say the Apple-Microsoft "discussions reflect the intensifying rivalry between Apple and Google" who now compete in the mobile phone market. They quote a tech insider who says "To the extent that it threatens Google, such a deal would be good for Apple." On top of that, "Apple is also working on ways to manage ads displayed on its mobile devices, a move that would challenge Google’s advertising business."
  • "The Rivalry Explanation Doesn't Hold Water," writes Tom Foremski at Silicon Valley Watcher: "I don't buy it. Yes, there is some increased rivalry but on the Internet, that's increasingly true of many companies. This is more likely a financial decision. Apple receives tens of millions of dollars a year from Google for search traffic from the iPhone and also from users of the Apple Safari web browser. Microsoft is most probably using its cash hoard to muscle its way onto the iPhone, and maybe even become the default search engine in Safari. We might see Microsoft do the same with Mozilla and bid to become the default search engine on Firefox."

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