The arrangement will immediately propel Microsoft’s search engine from a negligible player into a major one in the mobile search market. The most recent comScore (NSDQ: SCOR) figures showed that Yahoo had 34.6 percent of the mobile search market in the U.S., while Google had 63 percent. Those figures are somewhat misleading, however, since a deal to make Microsoft the default search provider on Verizon (NYSE: VZ) phones is just beginning to roll out and should add significantly to Microsoft’s share. Together, Microsoft and Yahoo will dominate the U.S., by having exclusives with not only Verizon, but also AT&T (NYSE: T) and T-Mobile USA. Sprint (NYSE: S) Nextel is the only carrier working with Google (NSDQ: GOOG). In all, Yahoo has about 70 operator relationships worldwide.

Bartz, meanwhile, said during the call that by having Microsoft power its mobile search engine, the company would be able to invest in other mobile areas. “We are very interested in doubling down on the mobile experience,” she said. “(This) frees us up to invest in other areas of the mobile experience.”