The Guardian
reports that Yahoo is close to a deal with Orange to provide search services to the mobile operator’s subscribers.

The agreement, following a similar deal with 3, would be a boost for the portal in its battle for mobile search users against Google.

It would see Yahoo increasing its visibility to Orange’s mobile users and attractiveness to search advertisers, as well as providing a better opportunity to sell location-based services.

Although the mobile internet hasn’t proved a winner with consumers so far, both Yahoo and Google believe partnerships with mobile network operators will help offset any slowdown in the growth of PPC revenues online.

Google, which has already struck deals with T-Mobile and Vodafone, told The Times earlier this year that the firm’s mobile division will soon become its biggest driver of new business.

Usability is a notorious issue on mobiles, but Google says is testing “dozens” of new search-related products to be used solely on mobiles and PDAs.

Mobiles are also expected to be a key battleground in developing countries, where ownership of mobiles far outweighs penetration of PCs.

Still, user interfaces will only be one barrier to entry out of several – cost and slow downloading speeds among them.