According to a deal between Yahoo and T-Mobile, the search engine will be part of T-Mobile's Web2go mobile internet service licensing its OneSearch system for use in the phone. The announcement on Thursday came as a result of an ongoing effort between the two firms to provide search functions for T-Mobile. In February, the companies announced that Yahoo would also be powering search functions for T-Mobile in ten European countries.

The deal is being seen as a major coup for Yahoo, which beat out rival Google for the contract. It implies that T-Mobile USA, which is currently rolling out its 3G wireless network, will be able to provide a better Web browsing experience and easier navigation through a home page on its mobile handsets.

Part of the deal also entails Yahoo to offer sponsored search results, and in some cases display advertising within the search results. The two companies will share the advertising revenue, though no further details were given about it.

David Ko, senior vice president of Yahoo's Connected Life operation, boasted about the deal, saying: "With our innovative products and global partnerships we are a leader in mobile search and are incredibly excited to bring Yahoo OneSearch to more and more users. Together, T-Mobile and Yahoo are providing users with compelling mobile services, while creating unique opportunities for advertisers to reach the rapidly growing audience of mobile consumers."

With approximately 3 billion mobile phone users around the world, major search companies are vying for a piece the emerging mobile advertising market, which is still in its infancy. As a result, the stakes for the three main search giants - Google, Microsoft, and Yahoo - have never been higher.