recoiledsnake writes: Business Week is reporting that Apple is in talks with Microsoft to replace Google as the default search engine on its iPhone, according to two people familiar with the matter. "Apple and Google know the other is their primary enemy," says one of the people, who's familiar with Apple's thinking. "Microsoft is now a pawn in that battle." Apple is also working on ways to manage ad placement on its mobile devices, a move that would encroach on Google's ad-serving business. The person familiar with Apple's thinking says Apple has a "skunk works" looking at a search offering of its own, and believes that "if Apple does do a search deal with Microsoft, it's about buying itself time."