Wednesday, February 8, 2006 - Page updated at 12:00 AM

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Dell's Google software test may hurt Microsoft

Dell is testing software from Google and may distribute the programs on its PCs, a move that would be a blow to Microsoft.

The test includes a Google-powered Dell home page, Google desktop search and Google Toolbar, Dell spokesman Jess Blackburn said Tuesday. He declined to discuss a possible deal.

An agreement would underpin efforts by Google, the top Internet search engine, to expand beyond search and may threaten Microsoft's biggest businesses. Microsoft is building search into the next version of its Windows operating system and creating links to online versions of popular programs to woo users of rival services such as those offered by Google.

"Google is desperate for new revenue streams," said Matt Rosoff, an analyst at Directions on Microsoft, a Kirkland research firm. "It's definitely something Microsoft is concerned about."

Google would pay Dell and Hewlett-Packard to distribute its programs on their PCs, The Wall Street Journal reported Tuesday. Google may pay Round Rock, Texas-based Dell as much as $1 billion over three years, the newspaper said.

Google may be able to win an even bigger slice of the Internet search market by having better placement on PC desktops and toolbars. Google's advances also give PC makers a chance to try to lower the price they pay for Windows software, said Roger Kay, an analyst at Endpoint Technologies Associates in Wayland, Mass.

Microsoft declined to comment on a possible deal between PC makers and Google.

Microsoft, in its settlement after the U.S. antitrust case, agreed to allow PC makers to promote and highlight rival software on their machines.

Copyright © 2006 The Seattle Times Company


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