A match made in mediocrity

Yahoo's search engine has been chosen to power T-Mobile's new "web2go" portal, which will serve approximately 32.1 million US customers.

web2go's "mini-portal" provide's blended news, image and other results around a user's query, ClickZ reports. It also comes with a customizable start page and makes downloading mobile content — like ringtones and wallpaper — easier. The system will appear on newer handsets first, including T-Mobile's G1 Android unit, powered by Google, but will roll out on older phones over time.

Yahoo will sell sponsored links and display ads on the search results page, bringing additional revenue to its struggling coffers. Profits will be shared with T-Mobile, but details of distribution and the length of the deal have not been disclosed. It is also unclear whether Yahoo will offer T-Mobile guaranteed revenue. (A comparative value: Microsoft's deal-in-the-making with Verizon assures the carrier $550 million to $650 million a year over five years.)

Earlier this year, Yahoo displaced Google as the default search portal on most T-Mobile devices in 10 European countries and has been sharing search ad revenue with the carrier, Reuters writes. However, rival Google reportedly held 61% of mobile search as of June, according to Nielsen. (Yahoo came in second, with 18%.)

Search providers are willing to cede a majority of the revenue to wireless operators to secure a solid position in the mobile space, because they believe it will become "an advertising gold mine that will eventually surpass online ad dollars," writes Ad Age.

Yahoo is no exception. After watching Google swallow the desktop search market, it aspires not to lose the mobile search battle and is investing heavily in mobile services and partnerships, observes The Wall Street Journal.

Carriers were initially wary of such partnerships because they perceived search engines as competitors trying to piggy-back on network traffic. But as mobile search queries skyrocket with the proliferation of smartphones, and consumers demand better search experiences, they've been forced to change their tune.

Only about 7.7% of US mobile subscribers use search on their phones, according to comScore M:Metrics (via Silicon Alley Insider).