Microsoft hits the jackpot with Apple's iOS 7

Apple got all the headlines with the unveiling of iOS 7, but there's likely plenty of celebrating going on at Microsoft headquarters. When iOS 7 hits, it will be a big boost for Microsoft's struggling mobile efforts.

The big win for Microsoft in iOS 7 is that Bing will become Siri's default search engine. If you ask Siri a question and Siri can't find the answer, it searches the Web for the answer -- and Bing will deliver the results rather than Google. Currently Google is Siri's default search engine.

This is a bigger deal than you might imagine. Mobile search at some point will dwarf searches done from traditional computers. That's one of the reasons Microsoft is investing so heavily in Windows Phone and Windows tablets -- it wants a cut of the growing mobile search market, and with it, a cut of the revenue. Now, with Bing being Siri's default search engine, it will get a chunk right away.

Keep in mind that revenue from mobile search will go beyond simple text ads. With location awareness, search results will point directly to businesses near people who do searches, and Apple and Microsoft will figure out some way to extract money out of those businesses for pointing people their way.

Today Siri-powered Web searches may not come close to the volume of searches done by typing in a search query. But as people get more used to voice control and voice search, they'll search by talking far more often. Voice search may even end up more popular than typed searches.

The Siri-Bing integration could be the first step to a bigger deal between Microsoft and Apple for mobile search. In iOS 7, Google remains the default search engine when you do searches directly from Safari. But in switching the Siri search to Bing, Apple is signalling that it fears Google more than it does Microsoft. If the Siri-Bing connection works well, don't be surprised if all default searches in iOS eventually flow through Bing.

At some point, Microsoft will be getting a fair amount of mobile search revenue from iOS. It already gets hundreds of millions of dollars from licensing deals with Android device makers. One estimate even says that Microsoft could eventually get $8.8 billion a year from such deals. I think that number is highly overinflated. Still, Microsoft will be taking in plenty of money from Android.

With revenue from both iOS and Android flowing in, that means Microsoft will make money no matter what mobile device people use. Some people have faulted Microsoft for what seems like a crazy mobile strategy. But in this instance, it's crazy like a fox.

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