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The first Google Android-based handset offered by the iPhone-hugging AT&T will not use Google as the default search engine. It will use Yahoo!.

As reported by BusinessWeek, the Android-based Motorola Backflip will debut on March 7, and its browser search box will default to Yahoo!, although users will have the option of switching to Google.

Yahoo! has an existing relationship with AT&T - aka Big Phone, the second largest carrier in the US and the only US provider offering the Apple iPhone - and the two outfits have some sort of deal in place to give Yahoo!'s search engine prime placement.

"We have a long-standing relationship with AT&T and more than 80 carrier partnerships around the world for our award- winning mobile-search experience,” Yahoo! vice president David Katz told BusinessWeek. “Mobile search continues to be a focus for investment and innovation.” Yahoo! and AT&T were not immediately available for comment.

On Tuesday, during a conference keynote in Silicon Valley, Microsoft CEO Steve Ballmer played down the possibility of Redmond inking deals to give its Bing search engine prime placement on Android phones. "That's a little more complicated," he said. "Android without [Google] isn't Android. We're going to have to see where the Android market develops."

But clearly, Yahoo! and AT&T see things differently. Android is a (semi-) open source operating system, which means that handset makers can use its code without the approval of Google - and without making licensing payments to the Mountain View Chocolate Factory.

Unlike Nexus One - which is sold from Mountain View's new online store - the Backflip is not a Google-branded phone.

Microsoft has inked a search deal of its own with Verzion, the largest US carrier, to make Bing the default on certain BlackBerry phones. Google search is the default on the iPhone. But that could change. ®

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