Microsoft search to be default on Hewlett-Packard PCs
NEW YORK - Microsoft Corp.'s Internet search engine will become the default search program on all personal computers sold in the United States and Canada by Hewlett-Packard Co., the world's biggest maker of the machines.
The Windows Live Search tool bar will be installed on PCs starting in January, Redmond, Wash.-based Microsoft said yesterday in a statement. The software also will direct users to HP's sites, including its photo service Snapfish.
Microsoft's search engine, the third most popular, will replace Yahoo Inc.'s as the default on HP machines. The agreement is designed to help Microsoft get its sponsored links in front of more users and take market share from Yahoo and Google Inc., the top two US search engines. Microsoft scrapped a $47.5 billion bid for Yahoo on May 3.
"The fact is, very few people actually change their defaults," said Sue Feldman, an analyst at IDC, a market researcher in Framingham, Mass. "This is all about eyeballs right now."
Winning more search users may help Microsoft, the world's largest software maker, fuel growth in Web advertising sales, which reached more than $40 billion industrywide last year. Google got more than six times as many search requests as Microsoft in April, helping the company reap higher ad sales. Yahoo performed twice as many searches.
Microsoft and HP have a "financial arrangement," said Angus Norton, senior director of Microsoft's Live Search Platform. He declined to elaborate. Microsoft has a similar deal with Lenovo Group Ltd. for laptops, and the software maker is pursuing partnerships with other computer companies, Norton said.
"When we talk to our advertisers, they tell us that they get great click through, great advertisement performance, but they don't get the volume that they need," Norton said, referring to the number of people using Microsoft's search engine. He said the deal with HP will drive a "very high" volume of search queries.
Microsoft fell 52 cents to $27.80 in Nasdaq Stock Market trading. The stock has dropped 22 percent this year. HP, based in Palo Alto, Calif., declined 81 cents to $46.25 in New York Stock Exchange composite trading.
Dell Inc., the world's second-largest PC maker, uses Google's search software as the default on consumer machines as part of a three-year agreement signed in 2006, spokesman Jess Blackburn said in an e-mail.
In the first quarter, HP sold 3.88 million PCs in the United States, according to IDC. The tool bar will be built using Microsoft's Silverlight technology and modeled after the MSN toolbar, which has buttons that let users preview websites without leaving the page they are on.
Google handled 61.6 percent of US search queries in April, compared with 59.8 percent in March, Reston, Va.-based ComScore Inc. said last month. Sunnyvale, Calif.-based Yahoo fielded 20.4 percent of searches, down from 21.3 percent, while Microsoft's share fell to 9.1 percent from 9.4 percent.
