Chalk one up for Microsoft — sort of.

If today’s report in the Wall Street Journal is right, then Microsoft is about to land an agreement with Verizon Wireless to become the default search provider on its cellphones.

In its battle with Google, that should count as a win for Microsoft, even if the company had to offer much, much better terms than its rival.

From the article: “Verizon is tilting toward Microsoft because the software giant is offering significantly better financial incentives, but the telecom company is still in discussions with Google and the situation is fluid with both companies, these people said.”

The WSJ says the deal would likely call for Microsoft to share revenue with Verizon when advertisements come up in response to a search. It reports that there would likely be guarenteed payments to Verizon of $550 million to $650 million over five years. That’s about twice what Google offered, according to the report.

If accurate, Microsoft’s super aggressive offer shows just how worried it is about Google. It needs wins, particularly when it comes to search deals.  But as Silicon Alley Insider points out, Google is under some pressure, too.

“Google is now probably getting quietly desperate, too (stock price $300), so it will be interesting to see if it panics and does something economically stupid. Probably not, but possible, given how much Google is betting on the growth of mobile.”

And so the battle rages on…

Keep an eye on:

• Dentsu, Japan’s largest advertising company, cut its annual profit outlook by 20 percent and said it would buy a U.S. ad agency as it seeks growth outside the stagnant and mature domestic market (Reuters)
• Conde Nast’s online media division laid off more than three dozen staffers from ad sales to infrastructure (AdAge.com)
• Shares in struggling Midway Games Inc. - media mogul Sumner Redstone’s pricey gamble on the video game business - sank to a fresh all-time low (NY Post) 

(Photo: Reuters)

The International Advertising Association (IAA) is holding its World Congress in Washington D.C. this week, when hundreds of advertising and media executives descend on the nation’s capital to talk about social communities, marketing regulation, return on investment, and, of course, the economy.

Here’s what ad industry types are saying:

“Advertising and the economy seem to go hand in hand. Really, the fact that the economy is weakening is going to have an impact on the industry in the short term.” Bob Liodice, President, Association of National Advertisers

“An actors’ strike would be incredibly devastating, particularly to the television business. The industry paid a large price for the last work stoppage. I don’t think either the (local) economy or the business would be able survive something like that.” Jeff Zucker, Chief Executive Officer of NBC Universal

“Speed is the new big.” Chuck Brymer, Chief Executive Officer, DDB Worldwide

“We’d love to be able to be able to put all that we do together… Unfortunately, our industry is just not doing a very good job of integration.” Michael Roth, Chief Executive Officer, Interpublic Group

“Measurement is fundamentally the biggest challenge we as an industry face.” Elizabeth Ross, President, Tribal DDB

“What we’re going to see is a shift in advertising. Companies want to make sure they get the best ROI during these tough times. But they won’t stop spending, and I think they really should spend more.” Wally Snyder, President, American Advertising Federation

“Right now they (18-26 year olds) are spending more time on the Internet than they do a combination of TV and radio. About 15 hours per week.” Kevin Johnson, President, Platform and Services Division, Microsoft

“We’ve stopped using the term ‘consumer.’ If you think about it, it’s somewhat derogatory. Makes people sound like eaters.” Tom Bernardin, Chief Executive Officer, Leo Burnett

“The business model in which the agency’s sole function is to create advertising and buy media on behalf of clients is no longer viable. Indeed, we need a new model. The agencies of the 21st century need to develop relationships with clients where both parties share risks and rewards equally in true partnership.” Tateo Mataki, Chief Executive Officer, Dentsu