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February 8, 2006, 7:44 am
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Computer-maker Dell is running tests with Google to see if it will
install the firm's software on its products.
Dell said it was running a test to see if it will include Google
toolbars and search tools on its computers.
The move would make Google the default search tool on millions of new
computers as it tries to expand its business and attract more users.
It also could help firms chip away at the dominant position of
Microsoft, which also is developing search tools.
At the heart of Microsoft's success was its agreement with computer
manufacturers to make its Windows software the default operating
system on new PCs.
Once the software is on the computer, the majority of users do not
bother to change it, analysts said.
Google is looking to tie up more agreements with manufacturers giving
it greater access to computer users and revenues from advertisers.
Google already has deals with Hewlett-Packard, Gateway, Sony, Apple
"We can confirm that we are running a test with Google that could
include a Google-powered home page, Google desktop search and a Google
Toolbar," said Dell spokesman Bob Kaufman.
However, analysts said that Microsoft's position was not in immediate
danger and the cost of having to tie in manufacturers may hamper
Google's future profit growth.
"There is no serious evidence that [Microsoft's] franchise is actively
being undermined in any material way at this point," said Charles Di
Bona, an analyst at Sanford C Bernstein.
Google's shares have fallen since the firm disappointed Wall Street
with its earnings report last week.
The stock dropped 4.5% to $367.92 on Tuesday.
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