Digital Journal — The tech world has long talked about the day that Google would come pre-installed on a PC from a leading manufacturer. Microsoft has wet its diapers numerous times over the idea. Finally, the day has come, as Google has signed a partnership with Dell.
A sign of a new era in the PC-search engine battle, Google and Dell reached an agreement to pre-install Google software on millions of Dell computers over the next few years. It’s a match made in tech heaven, as the couple are the No. 1 search engine and the No. 1 PC maker in the world.
While financial terms were not revealed, the companies say they will share revenue from search-advertising fees. Google’s CEO Eric E. Schmidt says his company’s Web and search software will appear on Dell screens and users will be directed to a website branded by both companies. Dell also says that Microsoft Internet Explorer 6 will be set to use a Google homepage.
Dell and Google spokespeople have so far declined to comment on details of the agreement, but according to Bloomberg.com an unnamed source says Google will pay Dell a fee for every PC that is shipped with Google’s software. This indicates a new era in the PC world where Google could start buying alliances to maintain growth.
“This is very important for Google, particularly if you look at how Microsoft is going to be pushing its search technology by embedding it in Internet Explorer,” Safa Rashtchy, an analyst with Piper Jaffray told the New York Times. “Most people are going to stay with the default search technology that comes with their machine.”
The Google-Dell deal is part of several agreements between the two companies. And while the consumer market accounted for only 14 per cent of Dell’s revenues last quarter, the three-year deal will eventually involve tens of millions of computers.
In the face of competition from Microsoft who has its software pre-installed on virtually every personal computer sold worldwide, the news is a huge accomplishment for Google. The company currently has four times more users for its Internet search than Microsoft, and leads in advertising revenue. This deal could mean even more dollars.
The deal is so big, in fact, that other online giants are forming partnerships, terrified they will be lost in Google’s shadow; Yahoo! (the No. 2 search engine) and eBay (the largest online auctioneer) announced a formal alliance to combat Google’s growing power.
As for Dell, it’s lucky to have Google on its side because the company has been fighting to maintain its market share and growth — something Google could change quickly. According to market researcher IDC, Dell sold 9.64 million PCs in Q1 of 2006, down from 10.5 million in last quarter of ’05.
And for Google, the deal was essential, as the company has expressed deep concern over the last few months over Microsoft’s advantage of having its search software pre-installed on Windows machines: With the upcoming release of Microsoft’s Windows Vista, Google co-founder Sergey Brin has publicly expressed uneasiness over what he called Microsoft’s past anti-competitive behaviour. At a Google press event two weeks ago, Brin said he fears history could repeat itself.
As the battle for ‘Net supremacy heats up, companies are scrambling to form partnerships and ink deals that co-brand big names. The Internet battle has become a tech version of Survivor where a company’s very existence has come down to who is on its side. The only difference: There is no immunity, and competition is so cutthroat that you could be a hero one day, and voted off the island the next.
