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June 02, 2008
Microsoft attacks search with new deal

Call it the backup plan after the Microhoo fiasco. Desperate to find ways to close the gap with Google, Microsoft has been firing on all fronts, but today it looks like the company may have scored a minor victory for its search business by inking a search deal with Hewlett-Packard.

How minor? Well, that depends on two factors: how many people will buy Hewlett-Packard PCs, and of that group, how many will keep Live Search as their default search engine.

Extrapolating on data from market research firm IDC, Larry Dignan of ZDNet predicted that Microsoft could expect to put Live Search into the hands of as many as 16 million computer buyers per year.

That's certainly music to the ears of Microsoft CEO Steve Ballmer, who told his employees on May 1: "Every Dell machine we buy at home comes with the Google toolbar; it's not a good day in my family when that happens."

But as to question No. 2 -- the number of users who will stay with the default search engine -- there's no real answer. According to Angus Norton, a senior director in Microsoft's Live Search group, the figure could be as high as 40 percent. But that estimate is based on historical precedent, which may not offer as much guidance in a market with an increasingly sophisticated user base.

Google, which has a similar deal with Dell, hasn't limited its search initiative to the desktop. The company has also inked deals with browsers like Firefox. But the browser fight puts Microsoft in something of a quandary, given the realities of its antitrust settlement. While Explorer is still the world's leading browser, Microsoft is unable to make its search engine the default in nearly all circumstances, meaning that the company is unable to leverage its lead in the browser wars.

According to Microsoft, the focus will now be on looking for more distribution deals for its Live Search product. However, the company hasn't been shy about looking for alternative ways to get users to try its Google alternative. Late last month, Microsoft said it would offer cash incentives in the form of rebates to users who use Live Search to find and buy products online.

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