Comcast balks at Google deal

Comcast Corp. (NASDAQ:CMCSA) is unhappy with the search advertising deal it has with Google Inc. (NASDAQ:GOOG) for its broadband portal and is chatting up Microsoft Corp.'s (NASDAQ:MSFT) MSN service, according to the Wall Street Journal (subscription required).

The no. 1 cable company is unhappy with the terms of its current deal with Google and wants a larger share of the advertising revenue, the paper said, adding that Comcast.net is one of the biggest sources of Google search queries from outside the company.

There's isn't anything unusual about the Comcast-Google situation. I'm sure Google is involved in lots of contract negotiations like it. What's weird is that the Comcast dispute got publicized. Why Comcast trying to send Google a message via the Journal?

Though this deal isn't significant for the bottom line of any of these huge companies, it's worth monitoring. My colleague Tom Taulli correctly points out that Google is starting to show vulnerabilities and that search has the potential to become a commodity.

Google doesn't want to give up traffic to any competitor, especially MSN. Microsoft is probably the only company that can break the zen-like calm of Google's management.

The Philadelphia-based company wants to boost its Web presence, which includes sites like Eonline.com, as competition for television and broadband internet services heats up. Microsoft wants to establish credibility in search to rebut critics who claim the company is pouring billions into a foolish quest to catch up to Google.

So there's lots of pride and ego at stake here. It will be interesting to see how things work out.