Microsoft signs search distribution deal with HP

June 2, 2008 6:02:57 PM PDT
In a bid to boost its Web search traffic, Microsoft Corp. on Monday announced a deal that will make its Live Search the default on Hewlett-Packard Co. personal computers shipped in the U.S. and Canada, starting in January.

The deal also calls for HP, the world's largest PC maker, to install copies of Internet Explorer with an extra Live Search toolbar on those computers. Microsoft said the toolbar also links to HP services such as its Snapfish digital photo printing site.

Since Microsoft called off its $47.5 billion offer to buy search competitor Yahoo Inc., the company has been under pressure to prove it has a new plan for attracting more people to Live Search.

Google Inc. fields more than 10 times Microsoft's search traffic and has parlayed that into billions of dollars in advertising. Yahoo, the No. 2 search engine in the U.S., attracts more than twice as much as traffic as Live Search.

Microsoft has already made a similar arrangement with the much smaller, China-based Lenovo Group, while Google has a distribution deal in place with Dell Inc. and Mozilla's Firefox Web browser.

"Every Dell machine we buy at home that comes with the Google toolbar, it's not a good day in my family when that happens," Ballmer said to a gathering of employees on May 1. He told them Microsoft is now willing to invest more in distribution deals.

Microsoft would not reveal financial details of the deal or say how much additional search traffic it expects to gain.

Angus Norton, a senior director in Microsoft's Live Search group, said about 40 percent of Web surfers use whatever search engine is set as the default on their PC.


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