New York
– Apple (NASD: AAPL) is in talks with Microsoft (NASD: MSFT) to have Bing replace Google (NASD: GOOG) as the default
search engine on the iPhone, BusinessWeek reported, citing two people familiar
with the matter.

The report indicated that the talks "have been under way
for weeks."

"Apple and Google know the other is their primary enemy. Microsoft
is now a pawn in that battle," said one of BusinessWeek’s sources, who was
characterized as "familiar with Apple’s thinking."

The source added that
Apple is also looking to manage mobile advertising on the iPhone, another move
into Google’s territory.

The rivalry between Google and Apple was further
entrenched with the recent release of Google’s first smartphone, the Nexus One.


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