Microsoft announced today that starting in 2009 all Hewlett-Packard consumer Windows PCs distributed in the USA and Canada will be preloaded with Live Search as the default Web search engine in Internet Explorer and with a custom Live Search enabled toolbar featuring their Silverlight technology. HP had previously been signed up with Yahoo.
Danny Sullivan has a nice table of PC OEMs, their US market share, and the search engine they have signed up with and adding HP clearly is a leg up for Microsoft since HP is a strong number 2 (24%) to Dell (31%) who signed with Google in 2006. Before this HP deal, Microsoft only had Lenovo whose US share was minimal.
The question, of course, is how many users actually stick with the OEM presets for IE or change them or switch to Firefox (which defaults to Google). All of the search engines track the sourcing from toolbars and preloads (use one of them for a search query and check the parameters on the URL) so they have a good idea on traffic and ROI at least after one of these deals is started, but Microsoft undoubtedly has more than ROI on their mind.
First Microsoft has to grow beyond their single digit Web search share if their advertising aspirations are to be realized and this is one way of doing that. Second, a Silverlight toolbar means a Silverlight preload which Microsoft had yet to ante up for with the OEMs and that’s critical if they expect to get their Adobe Flash killer off the ground. There’s been no insight into what sort of bidding went on for the HP eyeballs, but there are lots of reasons why Microsoft would not want to be outbid.