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Friday, May 26, 2006
Dell to Sell Google PCs

Google and Dell said on Thursday that the No. 1 personal computer maker will install Google software on its systems starting from this month, potentially dealing a blow to Microsoft.

Google will incorporate on Dell computers its desktop software, which integrates a number of personal computing applications, a Google tool bar and a co-branded Internet home page, officials from both companies said on Thursday.

"There's probably more to come" in the Google-Dell partnership, Google chief executive Eric Schmidt told investors at a Goldman Sachs & Co. Internet conference. "This is the first" of several agreements.

The companies will share revenue from the tie-up, but Schmidt and Dell spokesman Jess Blackburn declined to give details.

"We're doing this because we feel the tools will help the customers search and organize digital information quickly and easily right out of the box," Blackburn said.

Dell will start selling Google-equipped PCs to consumers and small and mid-sized businesses by the end of this month, Blackburn said. The systems will also be offered to some large corporate customers.

Google and Dell in February said they had begun to test incorporating Google's software package, which would allow PC customers to search both the public Web and information stored on their computers.

At the time, Dell and Google were reported to be in talks to install the software on as many as 100 million new Dell PCs, following a bidding process in which Google edged out Microsoft, the world's biggest software maker, and after Web search rival Yahoo withdrew.

A large-scale agreement with the world's No. 1 PC maker would be a major coup for Google. A decade ago, Microsoft used its leverage over PC makers to control which software came installed in new computers, betting that customers rarely bothered to replace many of those programs.

Dell, whose growth has slowed for the past year as competitors reduced prices, stands to benefit by aligning itself with the Internet's most popular search engine.

The company last week announced it would equip some high-end corporate server computers with microchips from Advanced Micro Devices Inc. AMD, whose advanced processors have been gaining in popularity at the expense of industry leader Intel, previously Dell's sole chip supplier.

Dell, led by Chief Executive Kevin Rollins, has been trying to enhance its image by buying and selling more consumer electronics such as wide-screen televisions, buying Alienware, a seller of high-powered gaming PCs, and opening two storefront outlets to showcase its products.

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