Yahoo (NSDQ: YHOO) may offer users better functionality, and may have wider carrier distribution deals in place—but in the race to own the nascent U.S. mobile search market, it appears that Google’s brand wins the day, according to a research note put out by Bernstein Research analyst Jeffrey Lindsay. Since there are currently no official third-party figures on mobile search market share, Lindsay uses “brand reach,” based on a recent comScore study, which is the number of visitors to a search property divided by the total number of users to access mobile search in a month and used that along with M:Metrics data, to compare market share between the major players for the month of January. Google’s sizable brand reach on mobile—62 percent in January 2009—dwarfs that of Yahoo, its closest rival, with a 30 percent brand reach and Microsoft’s MSN/Live Search with an 11.2 percent reach. The power of the Google (NSDQ: GOOG) brand has allowed the search giant to move to the head of the pack despite what Lindsay considers “the apparent failure of Android,” and despite the expensive efforts by both Yahoo and Microsoft (NSDQ: MSFT) to buy their way onto carrier portals. No small thing given Lindsay’s forecast for mobile advertising: $2.3 billion by the end of 2012.

Lots more on mobile search from the report after the jump

Two mobile search strategies are emerging in the sector, according to Lindsay:

—Google’s strategy, which he calls “pull-through,” relies on users who know it from the internet to seek it out on their mobile phones even if this means hunting down Google or bookmarking it.

—Yahoo and Microsoft’s strategy of “paid-default,” which is to pay carriers to be the default search engine on their portals. Yahoo has paid-default deals with T-Mobile and AT&T (NYSE: T), while Microsoft recently entered into one with Verizon (NYSE: VZ) in which it reportedly guaranteed payments to the carrier of approximately $550 million to $650 million over five years—double what Google supposedly offered initially.

But even as Yahoo and Microsoft are the default search option on three of the four major U.S. carriers, users still far and away prefer Google’s mobile search and are even willing to hunt it out. “This is a level of hassle we thought most consumers would be reluctant to incur. The next strategic issue is whether or not this trend will hold as wireless internet penetration moves into the less discerning demographics, but for now Google’s 60 percent-plus search share seems to have moved directly over to the wireless platform without Google management having too much of an idea why.” As for Verizon deal reportedly snatched from them at the last minute by Microsoft, Lindsay says “it is likely that [this] is one of the best things that has happened to them in a long while.”

Additional Highlights:

—Yahoo Mobile: Lindsay’s report is mostly based on his examination of Yahoo Go, which has been replaced with Yahoo! mobile. Still, he found that Yahoo’s functionality has overtaken Google’s, but the big problem for Yahoo (as always) is how “to translate this gain into superior financial performance with advertisers.” The big difference between the two is that the new portal, Yahoo! mobile, allows users to easily add any application—including those of competitors—to it. Yahoo Go only allowed them to use Yahoo products. Lindsay believes the new strategy will benefit Yahoo!. “Making life generally easier for advertisers is always good and we think they will be be even more pragmatic going forward.” He also thinks Yahoo! “ is keen to develop an Apps Store capability around Yahoo! mobile to get incremental sales and faster access to cooler apps.”

—But isn’t Google Sprint’s default search?: Lindsay doesn’t believe that the search giant is paying Sprint (NYSE: S) the sums its rivals are paying for carrier placement. Google is doing well enough on the other platforms, he says, that they see “no pressing need to give large amounts of cash to secure placement on the other carriers—hence the Verizon outcome.”

—Android a failure: Lindsay classifies Android as a flop, especially since Google didn’t win either Verizon or AT&T, which he says would have made Android a market leader and a force to be reckoned with. He notes that even T-Mobile, which put out the first Andoird phone, abandoned Google in favor of Yahoo! As for Motorola’s recent decision to concentrate on building phones using Android, and HTC’s recent deal with Vodafone (NYSE: VOD) (though this is in Europe), even these are not enough in Lindsay’s view to give Google the upper hand in the OS middleware space – “which was after all the objective for Google, and so we classify Android as a failure in this regard.”