MICROSOFT'S dominance of the computer software market came under attack today after PC giant Dell and internet search engine Google reached a landmark deal.
Under the terms of the agreement, millions of Dell computers will come supplied from the factory with Google software already installed, including several PC applications, a Google toolbar and a co-branded homepage.
Financial details were not dis
closed, but both firms will receive revenues from the deal.
When the negotiations between the pair were first reported nearly four months ago, Google reportedly was considering paying Dell up to $1 billion (£534 million) to load its software over a three-year period.
"It's a really big deal for both companies," said Google chief executive Eric Schmidt. "It's very good for them and very good for us."
The deal is likely to mark a major turning point for Google and mark a serious threat to Microsoft. Powered by its dominant Windows operating system and leading Internet Explorer web browser, Microsoft has long been the guiding force for most consumers' computing experiences.
However, Google has emerged as a major threat during the past couple of years as it has rolled out an array of popular new products for doing everything from finding files on hard drives to keeping track of upcoming events.
The web search giant has also adopted a different business model to Microsoft. Instead of selling its software to make a profit, Google makes money by selling advertising to firms that want access to those who use its free products.
Microsoft has identified this sort of software as a key threat to its multi-billion-pound business.
Today's tie-up follows news that Yahoo! and online auctioneer eBay are banding together to fight growing competition from both Google and Microsoft.
Under that partnership, Yahoo! will be the exclusive provider of graphical, branded advertising on eBay's website.
Microsoft had talked with both Yahoo! and eBay about strengthening ties to fend off Google.
The agreement between Dell and Google marks the second time in two weeks that the world's largest PC company has aligned itself with a firm that poses a threat to an industry leader.
Last week, Dell confirmed it would start using some processing chips made by Advanced Micro Devices (AMD), which has been chipping away at the market share of bigger rival Intel.
Schmidt said the tie-up with Dell was likely to be the first of several similar deals. "There is probably more to come," he told investors.
The PC maker will install Google's desktop search software and its toolbar while preserving a space for the search engine in a side panel of Microsoft's latest web browser. The home page on the browser will also be programmed to go to a website co-branded by Dell and Google, providing another springboard to host advertising.
In the final three months of 2005, Google's net profits leapt 82 per cent to around £210m, helped by demand for online advertising.sreid@edinburghnews.com
The full article contains 523 words and appears in Edinburgh Evening News newspaper.
