While many big brands are reluctant to invest heavily in what they consider to be "experimental media" during a recession, this deal could serve as a catalyst, both for brands and competitors.

Wireless data -- from business-to-business data to multimedia services -- now represents more than 25 percent of Verizon Wireless' revenue.

"There is certainly the possibility that more big brands will invest in mobile," Mr. Sterling said. "Microsoft now has this ad platform with this carrier, and my impression is that there will be a high degree of collaboration between Verizon and Microsoft, with Verizon exposing some of its data, especially around location, for targeting purposes.

"It's going to be intriguing to see how some of these brands react -- they've seen case studies and read about the higher responses rates of mobile, and many have been tempted but haven't taken the plunge," he said. "More will experiment, especially if some of the carrier's targeting capabilities are brought to the table."

There is also the strong possibility that Microsoft could bundle online and mobile inventory to take advantage of its cross-platform capabilities.

"Google and Yahoo doing some of the same types of things, bringing online display ads and search to the mobile realm," Mr. Sterling said.

It will also be interesting to see how Verizon's competitors react to the deal.

"The other carriers will probably take a bit of a wait and see attitude, but this definitely ups the stakes," Mr. Sterling said. "The carriers are having discussions about mobile advertising -- Sprint has a relationship with both Google and Microsoft.

"This becomes a potential model for other carriers -- a high degree of collaboration, privacy controls and security around customer data, a generous revenue share as part of the whole proposition, letting carriers take a nice chunk of whatever revenue is generated, especially if they can make ad-targeting more effective by releasing consumer data," he said.

This definitely puts more pressure on the others to respond.

The deal is Microsoft's way to make sure that it capitalized some of the momentum it has gained in the mobile space since its acquisition of ScreenTonic, a display advertising company based in Paris.

The software giant acquired ScreenTonic in an effort to get into the mobile advertising space and monetize its own owned-and-operated inventory.

"Over the past year since the acquisition, we've built good momentum," he said. "We service mobile display advertising in 12 countries, including the U.S. -- we already have a pretty well-established advertiser base on the mobile side.

"We also launched a Live Search client for Windows Mobile and the feedback has been very good."

Microsoft's mobile search advertising customers include eBay, mortgage lender Countrywide Financial, Mazda, Progressive, Kia, InterContinental Hotels and Bank of America.

Additionally, Microsoft will be monetizing local search results using ads from Yellowpages.com.

Microsoft's current mobile display advertisers include Coca-Cola, Paramount, Best Buy, McDonald's, Nike, Bank of America, Ford Motor Co., Disney and Adidas.

It is likely that many of these brands will now choose to launch ad campaigns targeting Verizon Wireless subscribers.

With Live Search integrated capabilities, Verizon Wireless claims that its customers will now have easier access to context-relevant search results to help improve the mobile experience.

"We couldn't be more excited -- this is a great deal to explode our business, but it's also just the beginning," Mr. Schiappa said. "We want to grow our momentum and continue to be the market leader in this space.

"We're working feverishly with Verizon to support all of their handset platforms," he said.

Depending on which device they use, customers will be able to use voice commands and typed queries.

They can also choose to use location-aware searches to receive relevant search results, including maps, directions, traffic information, information on local businesses, movie theatres and show times, gas prices and weather.

In addition, customers will also get search results that include news and entertainment content such as downloadable full-track songs, videos and games.

Verizon Wireless customers will be able to access Microsoft Live Search from a device's home screen by downloading an application or through Verizon Wireless' mobile Web service.

The addition of Microsoft's mobile search and advertising services enhance the long-standing strategic Verizon-Microsoft relationship.

Under the five-year agreement, Microsoft will manage search and display advertising on Verizon Wireless' Mobile Web service, creating a one-stop integrated way for advertisers and ad agencies to reach mobile consumers.

Microsoft gets the credibility of adding Verizon Wireless' customers to its consumer base, and one-ups competitors such as Google and Yahoo.

For the carrier, it will mean a healthy share of advertising revenue dollars.

The context for the deal? Wireless customers are increasingly using their phones to access the Web, browse and buy all forms of music, video, games and to look for relevant local information.

"Mobile trends are really telling," Mr. Schiappa said. "Overseas, consumers are spending more minutes on mobile devices than on PCs and that trend is moving west -- iPhone users in particular are spending more time on their handset than their computer."

"We want to continue to invest heavily and grow our mobile business," he said. "We see green-field opportunities to grow in this space."

"As the world keeps moving into the mobile space, it's a great opportunity for us to establish a leadership position."

The goal of the partnership is to make the emerging wireless experience accessible and easy for customers -- while increasing ad-revenue for both partners.

Verizon Wireless operates a wireless voice and data network serving 70.8 million customers, making it the number-two carrier in the U.S.

However, once the acquisition of Alltel closes today, Jan. 9, Verizon Wireless will leapfrog AT&T to become the largest carrier in the U.S.

Headquartered in Basking Ridge, NJ, Verizon Wireless is a joint venture of Verizon Communications and Vodafone.

Founded in 1975 by Bill Gates, Microsoft is a software and services giant. Its operating system for mobile devices is Windows Mobile.

"Our advertising vision is that ads should offer some type of experience that's useful, entertaining or engaging for consumers," Mr. Schiappa said. "The scenario could be ad-driven, but the end user would perceive the experience as super-high-value.

"We want to move beyond just banner ads and a search box to deeply targeted local search, coupons or discounts, maps that helps consumers find a restaurant or retail location -- deeply integrated experiences," he said. "We want to enhance Verizon's network for its customers, and Verizon felt that we were more focused on the experience for the end user, and that's what we'll provide them."

Eventually, the partners want to explore advertising within third-party mobile applications.

"In the early stages, it will be mostly banner ads and a search box, but as we get further along, we both share the desire to leverage the community of third-party developers by sharing the technology to develop applications that consumers value and create experiences that consumers will flock to," Mr. Schiappa said. "We could then serve advertising within those applications."

The benefit of mobile over other advertising platforms is that it is such a personal device.

"Mobile not only has an enormous install base both in the U.S. and globally, but there's different usage pattern -- people use mobile search differently than on a PC," Mr. Schiappa said. "Mobile advertising messages can be more actionable, which is a great opportunity for advertisers to drive decision-making in real time."