Dell to Preinstall Google Software

Google has reached an agreement with Dell to have its software preinstalled on millions of new computers. Among the software included would be a customized version of the Google Toolbar, along with its Desktop Search product.

Additionally, new Dell owners will have their homepages set to a co-branded portal site. Google beat out Microsoft for the deal after Yahoo withdrew its bid, in which 100 million Dell PCs could ship with the Google software.

Such an agreement would help the Mountain View, Calif., based search giant continue its dominance as Microsoft makes changes to Vista to promote its own tools. Google complained to the Justice Department, although the agency sided with Microsoft saying the company was adequately giving users a choice of search engines.

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Dell is the number one PC manufacturer with an 18.1 percent market share as of the first quarter of this year, according to IDC. The deal will put Google's tools in front of one out of every five new PC users. According to the Wall Street Journal, an agreement was less out of Google striking back at Microsoft than increasing the use of its software products.

Nevertheless, the disagreement over Internet Explorer 7 was cited as a reason for ensuring that the Dell deal went through. Analysts criticized Google previously for taking the legal route rather than hammering out deals with OEMs.

"This reminds me a lot of the Netscape complaints in the 90's," JupiterResearch analyst Michael Gartenberg previously said. "Didn't help Netscape very much back then and actually made them look quite weak."

Gartenberg also pointed out that Microsoft is making concessions to Google. In the builds he tested, upon visiting Google, IE offers to change the default settings to use the Google search engine. He did admit that as Microsoft evolves, it would be harder for the company to "co-opt" the browser and Windows desktop.

"More interesting is what's worrying Google, is it that Microsoft's search has crossed the line to be good enough or that there's going to be mass adoption of IE 7 and Vista (or both)?" Gartenberg added.

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