Microsoft announce deal with Hewlett-Packard

Microsoft’s live search is to become the default search engine on all PCs sold in the US and Canada by Hewlett-Packard, from next January.

Under the deal reached yesterday, Microsoft hopes its sponsored links will attract more users. Microsoft’s search engine is currently third after Google and Yahoo.

The deal also calls for Hewlett-Packard to install copies of Internet Explorer with an extra Live Search toolbar on those computers. Microsoft said the toolbar would also have links to HP services like its Snapfish digital-photo printing site.

Google dominates the internet search engine market, handling 10 times more traffic than Microsoft’s live search, while Yahoo attracts more than twice as much traffic as live search.

Commenting on the deal, Kevin Johnson, president of Microsoft’s platforms and services division, said this is the most significant distribution deal for live search that Microsoft has ever done.

Angus Norton, a senior director in Microsoft’s Live Search group, said approximately 40% of internet surfers used whatever search engine was set as the default on their computer.

In the first quarter of the year, Hewlett-Packard sold 3.88 million personal computers in the US.

Last month, Microsoft withdrew a bid for Yahoo. The software giant wanted to buy Yahoo to gain a bigger portion of the online advertising market, which is valued at $40 billion a year and is expected to double to $80 billion a year by 2010.

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