Ben Ames at Infoworld reports that Google knocks Microsoft off Dell PCs:
When consumers boot up their new Dell Inc. desktops and notebooks next week, they will find a Google Inc. homepage and search tools, not the familiar Microsoft Corp. versions, the world’s largest PC vendor confirmed Thursday.
Dell will factory-install the Google desktop, toolbar, search engine and homepage on desktops and notebooks shipping to consumers and small and medium-size businesses worldwide, said Dell spokesman Jess Blackburn.
It will also be installed on certain enterprise systems, unless the buyer specifies its own corporate software tools. Dell will begin shipping the new configuration by the end of May.
No financial terms were announced, but the original rumor had Google paying Dell $1 billion over three years.
But is it really a blow to Microsoft? Joe Wilcox demurs:
I don’t doubt the situation stated by the Journal: “People familiar with Google’s thinking have said the deal with Dell wasn’t designed exclusively to strike back at Microsoft, but rather to increase use of Google’s services.” Google has more to gain by making its own business objectives the priority than making deals against Microsoft. The sky isn’t falling, and Google isn’t looking to get Microsoft.
By contrast, Microsoft’s bigger business objective would appear to be about getting Google. Some friendly advice: Rather than launch zillions of new Windows Live products and services, Microsoft would be better off making the stuff it already sells much better and getting upgrades, like Windows Vista, out the door on time. I swear, too many Microsoft Chicken Littles grew up playing Risk when they should have learned Chess.
And is it even a good deal? Henry Blodget repeats his original criticism of the deal and if the $1 billion is accurate, it does seem rather pricey. Also interesting is how Google will determine the returns. How about a special cookie for preloaded Dell machines?
Finally, as I mentioned in the immediately prior post, one needn’t look for conspiracy in Dell selling their crop of eyeballs for as much as they can get in today’s sellers market. If Microsoft really wanted to keep Dell on board, they could always have paid even more. In the meantime they can can always use it for Windows antitrust insurance – again quoting Joe Wilcox:
By the way, deals like this would have been nearly impossible before Microsoft’s US antitrust case. The landlord (Microsoft) covets his property (Windows). He doesn’t like redecoration (changes to the desktop) or subletters (the likes of Google software or services bundled instead of Microsoft stuff).