Microsoft (NSDQ: MSFT) has finalized a mutli-million deal with Verizon Wireless for the right to be able to provide the country’s largest carrier with portal, local, Internet search and mobile advertising services. The announcement is expected to take place during Microsoft’s Steve Ballmer’s opening keynote at CES tonight, starting at 6:30 p.m., although Verizon Wireless spilled the beans earlier at an investor conference. The search deal was hard fought and lasted nearly two years, in which all three Internet giants Yahoo (NSDQ: YHOO), Google (NSDQ: GOOG) and Microsoft were first involved, and then more recently, only Google and Microsoft were left. During the negotiations, the WSJ reported that the deal size ranged between $550 and $650 million, making it a significant coup for the emerging mobile search and advertising industry that is just getting off its feet. The decision by Verizon Wireless is important for a number of reasons. First off, it gives Microsoft a foot in the door, which was rapidly closing. The other U.S. carriers were already locked up. If the deal went to Google, it would have owned half the market between Verizon and Sprint (NYSE: S). If it had gone to Yahoo!, it would have been a landslide victory for the Sunnydale company, which already works with AT&T (NYSE: T) and T-Mobile USA. With Microsoft also in the game, the mobile search industry—especially in the U.S.—is still completely up in the air. The second thing to point out is the vote of confidence on Microsoft’s behalf that they believe the the mobile search and advertising market could be of significant value over a five year period, which is the length of their contract with Verizon (NYSE: VZ). Perhaps, it is just buying marketshare, but Medio Systems’ CEO Brian Lent, who provides white-label search services, and to Verizon Wireless specifically, believes differently. “I would suspect that it would be recoupable. Why would anyone would bid that amount?...I think these are not completely unreasonable numbers, given the size of the space. My industry expertise says that over a period of five-ish year period, one should be able to make those types of revenues.” Some more details: The deal will last for five years, and the first devices are supposed to launch in the first half. Searches will integrate voice commands and location-based services, and results will include maps, directions, traffic information, local business information; movie show times, gas prices and weather. In addition, users will be able to search for full-track songs, videos and games. Microsoft’s Live Search will be available on a device’s home screen, by downloading an app. The company did not say what the financial terms of the agreement were, or whether it also included a side deal in which Verizon committed to selling more Windows Mobile devices.

Microsoft (NSDQ: MSFT) has finalized a mutli-million deal with Verizon Wireless for the right to be able to provide the country’s largest carrier with portal, local, Internet search and mobile advertising services. The announcement is expected to take place during Microsoft’s Steve Ballmer’s opening keynote at CES tonight, starting at 6:30 p.m., although Verizon Wireless spilled the beans earlier at an investor conference. The search deal was hard fought and lasted nearly two years, in which all three Internet giants Yahoo (NSDQ: YHOO), Google (NSDQ: GOOG) and Microsoft were first involved, and then more recently, only Google and Microsoft were left. During the negotiations, the WSJ reported that the deal size ranged between $550 and $650 million, making it a significant coup for the emerging mobile search and advertising industry that is just getting off its feet. The decision by Verizon Wireless is important for a number of reasons. First off, it gives Microsoft a foot in the door, which was rapidly closing. The other U.S. carriers were already locked up. If the deal went to Google, it would have owned half the market between Verizon and Sprint (NYSE: S). If it had gone to Yahoo!, it would have been a landslide victory for the Sunnydale company, which already works with AT&T (NYSE: T) and T-Mobile USA. With Microsoft also in the game, the mobile search industry—especially in the U.S.—is still completely up in the air. The second thing to point out is the vote of confidence on Microsoft’s behalf that they believe the the mobile search and advertising market could be of significant value over a five year period, which is the length of their contract with Verizon (NYSE: VZ). Perhaps, it is just buying marketshare, but Medio Systems’ CEO Brian Lent, who provides white-label search services, and to Verizon Wireless specifically, believes differently. “I would suspect that it would be recoupable. Why would anyone would bid that amount?...I think these are not completely unreasonable numbers, given the size of the space. My industry expertise says that over a period of five-ish year period, one should be able to make those types of revenues.” Some more details: The deal will last for five years, and the first devices are supposed to launch in the first half. Searches will integrate voice commands and location-based services, and results will include maps, directions, traffic information, local business information; movie show times, gas prices and weather. In addition, users will be able to search for full-track songs, videos and games. Microsoft’s Live Search will be available on a device’s home screen, by downloading an app. The company did not say what the financial terms of the agreement were, or whether it also included a side deal in which Verizon committed to selling more Windows Mobile devices.

During an hour-long panel at the CES Mobile Entertainment event today, a host of executives ranging from Pandora to *SanDisk* and *Motorola* to *Sony* *Ericsson* talked about the mobile music industry with a couple of themes standing out: thoughts on the news yesterday that iTunes will allow full-track music downloads over-the-air for the same price, and whether negotiations with music labels, which can always be tricky, are finally starting to loosen up. The backdrop can be put into context with some numbers Atlantic Records shared earlier in the day. Livia Tortella, GM/ESVP of marketing for Atlantic Records, said that Atlantic was one of the first to achieve a 50-50 split between physical and digital music sales, and of the 50 percent going towards digital, she said the mix breaks down to 69 percent from downloads, 18 percent from subscription, and about 13 percent from mobile. On music-label negotiations “being like a colonoscopy”: David Thompson, head of content acquisition for Sony (NYSE: SNE) Ericsson: “The labels are realizing that digital is what matters, and since online is saturated, the only new money is in mobile. The labels are much more willing to come to the table and negotiate.” Following the panel, I asked Thompson to explain: “It [mobile] is the new hot spot for them. They’ve done well with Comes With Music from our competitors, like Nokia (NYSE: NOK), and therefore their digital divisions are getting more freedom and attention internally…it is still a tough negotiation on both sides.” Dave Ulmer, senior director, of Motorola’s Entertainment and Multimedia Products & Services, said: “It’s now inevitable to have the conversations, but it’s still a doctor’s examine.” Nokia’s Trevor Madigan says its hard despite their success: “Certainly, when a global company like Nokia tries to cut a deal for something that’s not an established market, it can be easier. But there’s no publishing community that’s integrated, it can be very challenging. We’ve been reasonably successful, but every country requires separate negotiations.” Reaction to Apple’s iTunes’ announcement: To be sure, Apple (NSDQ: AAPL) isn’t the first company to provide 99 cent track downloads over the phone. Sprint (NYSE: S) has had those prices in place for some time. But will Apple be the one to move the market from one primarily focused around side-loading music to one that is over-the-air? No one on the panel seemed impressed. Thompson: “HSPA [3G] will not be the end all-be all solution. The challenge we have right now is coming up with compelling services that give something to the carrier—they want new subscribers, so we have to come up with music services that do not clog up the bandwidth or ensures someone will sign up for a year, or update their data plan.” Ty Roberts, CTO at Gracenote, was also suspect of it changing things dramatically: “It adds a small amount of convenience. There are places where you want something right away, and want immediate gratification, but it’s still small.” Photo Credit: edans

—MobiTV Adds CBS: MobiTV will offer a CBS (NYSE: CBS) channel as part of its $10/month services, offering full episodes of hits such as CSI: Crime Scene Investigation, Numb3rs, CSI: NY, and The Young and the Restless. The shows will be available on AT&T (NYSE: T) and Sprint (NYSE: S) Nextel the day after they appear on TV. It will also include video-on-demand news sport and comedy clips from CBS Mobile. (CNet) —Player X, Admob Team Up: UK-based Player X and mobile advertising company Admob to offer integrated marketing campaigns that include advertising across AdMob’s global network. The main centre will be the portal Player X runs for O2 UK, and the service will allow content partners to track conversions from their ad campaigns’ right through to download. (release) More after the jump...—T-Mobile Launches G1 YouTube Channel: T-Mobile has launched a YouTube channel to teach people how to use the G1, with customers able to post questions and receive written and video answers from T-Mobile’s experts and other customers. I’m not sure how much use it will get, but it’s likely cheap and the video part makes demonstrations easy. (Mobile Market Magazine) —Kenya Bans Ringtones: Some African news sites are reporting that Kenya’s new Kenya Communications (Amendment) Act not only restricts media and gives the postal service strong powers to invade private communications searching for “obscene” content also makes it illegal to personalize a mobile phone: “Mobile phone owners are not allowed to change the facial appearance of their handsets or customise the phone features to their convenience. The law declares reprogramming of mobile phones illegal. You cannot even install fancy ringtones!” One commenter argued that the law is merely stating that “you cannot change the IMEI number or reprogam it”. I haven’t read the legislation, but wouldn’t be surprised if it was just incredibly poorly written. (The Citizen and Daily Nation)

During an hour-long panel at the CES Mobile Entertainment event today, a host of executives ranging from Pandora to *SanDisk* and *Motorola* to *Sony* *Ericsson* talked about the mobile music industry with a couple of themes standing out: thoughts on the news yesterday that iTunes will allow full-track music downloads over-the-air for the same price, and whether negotiations with music labels, which can always be tricky, are finally starting to loosen up. The backdrop can be put into context with some numbers Atlantic Records shared earlier in the day. Livia Tortella, GM/ESVP of marketing for Atlantic Records, said that Atlantic was one of the first to achieve a 50-50 split between physical and digital music sales, and of the 50 percent going towards digital, she said the mix breaks down to 69 percent from downloads, 18 percent from subscription, and about 13 percent from mobile. On music-label negotiations “being like a colonoscopy”: David Thompson, head of content acquisition for Sony (NYSE: SNE) Ericsson: “The labels are realizing that digital is what matters, and since online is saturated, the only new money is in mobile. The labels are much more willing to come to the table and negotiate.” Following the panel, I asked Thompson to explain: “It [mobile] is the new hot spot for them. They’ve done well with Comes With Music from our competitors, like Nokia (NYSE: NOK), and therefore their digital divisions are getting more freedom and attention internally…it is still a tough negotiation on both sides.” Dave Ulmer, senior director, of Motorola’s Entertainment and Multimedia Products & Services, said: “It’s now inevitable to have the conversations, but it’s still a doctor’s examine.” Nokia’s Trevor Madigan says its hard despite their success: “Certainly, when a global company like Nokia tries to cut a deal for something that’s not an established market, it can be easier. But there’s no publishing community that’s integrated, it can be very challenging. We’ve been reasonably successful, but every country requires separate negotiations.” Reaction to Apple’s iTunes’ announcement: To be sure, Apple (NSDQ: AAPL) isn’t the first company to provide 99 cent track downloads over the phone. Sprint (NYSE: S) has had those prices in place for some time. But will Apple be the one to move the market from one primarily focused around side-loading music to one that is over-the-air? No one on the panel seemed impressed. Thompson: “HSPA [3G] will not be the end all-be all solution. The challenge we have right now is coming up with compelling services that give something to the carrier—they want new subscribers, so we have to come up with music services that do not clog up the bandwidth or ensures someone will sign up for a year, or update their data plan.” Ty Roberts, CTO at Gracenote, was also suspect of it changing things dramatically: “It adds a small amount of convenience. There are places where you want something right away, and want immediate gratification, but it’s still small.”

I said last evening to watch for more shoes to drop. And today a pair of shoes fell from the sky and hit the market on the head. On top of that the market was up against resistance as I highlighted on the S&P 500 chart last night. The ADP employment report was much worse than [...]

Intra-day chart of the S&P 500 E-mini futures (5 minute chart) shows a triangle formation that has broken to the down side.There is some Fibonacci support in the 905 area. After that it is the trend line on the daily chart that offers the next significant support (880 - 890)

The pre market futures were already under pressure from the ADP employment report issued a short time ago. But moments ago Intel (INTC) issued what could be called an earnings warning. INTEL CUTS FORECAST, Q4 REV AT $8.2B V $8.74BE ($9B PRIOR ESTIMATE) - Q4 gross margins will be at low end of estimates at 55% +/- [...]

“Technical analysis is the study of market action, primarily through the use of charts, for the purpose of forecasting future price trends.” John Murphy, author - Technical Analysis of the Financial Markets Most people who invest in the market via their 401K, IRA account, or other means select stocks based on fundamental analysis. Fundamental analysis is the [...]

Schaeffer's analyst Colleen S. King takes a look at news on the Street before the market open.

Schaeffer's analyst Colleen S. King takes a look at the major news of the day on Wall Street.

Sprint's best selling phone is the Samsung Instinct, according to 74% of Sprint stores polled in TickerMine's latest survey. The BlackBerry was the next best seller, according to 19% of stores. The Samsung Instinct was also cited by 29% of stores as the best device for email, second only to the BlackBerry, at 42%. The Instinct also took the top prize for best music device (55%); it was followed by the LG Muzik (23%). Sixty-five percent of Sprint stores surveyed said they have seen an increase in the number of customers upgrading their phones or opening new accounts in the past few months.

Schaeffer's Laura Houser takes a look at activity on the Street ahead of the market open

Tammy DeRosier and Paul Keeton With A Second Quarter Review and Third Quarter Outlook