21 Comments

Summary:

Microsoft Corp today announced that HP would embed its Live Search technology on all consumer PCs sold by the Palo Alto, Calif.-based computer company in the United States and Canada, starting January 2009. Live Search is also going to be the default search engine in all […]

Microsoft Corp today announced that HP would embed its Live Search technology on all consumer PCs sold by the Palo Alto, Calif.-based computer company in the United States and Canada, starting January 2009. Live Search is also going to be the default search engine in all browsers on HP’s web site. Funnily, the big announcement merited only a tiny press release.

So, why is this a big deal? Because it shows that Microsoft is using its time-tested strategy of leveraging its desktop monopoly and big money to win in a market where it has been a late starter.

“This agreement with HP is a strategic indicator of our increased focus on securing broad-scale distribution for Live Search,” said Kevin Johnson, president of the Platforms & Services Division at Microsoft. “This is the most significant distribution deal for Live Search that Microsoft has ever done.” Of course, the terms of the deal -– a euphemism for “HP got a lot of money” -– were not disclosed.

Apart from the fact that Google’s search is really good and really fast, one of the main reasons it commands such a whopping share of the search market -– 67 percent in the United States –- is because it has firmed up distribution deals to embed its search service in everything from the Firefox browser to Dell computers to the Cox.net homepage.

The distribution game used to be Microsoft’s strategy; using its desktop monopoly and mega-cash, it asphyxiated Netscape and became king of the browser market. Thanks to the U.S. Department of Justice, however, the company had to pull back from its monopolistic moves. Even though Microsoft’s Bill Gates and Steve Ballmer told attendees of D6 conference that guys like them tend to avoid monopolies and compete, it is hard to imagine a leopard changing its spots. The desktop search deal with HP is a good example.

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  1. Piyush Agarwal Monday, June 2, 2008

    I am completely appalled by your take on this. How is MS “leveraging its desktop monopoly”? How is this any different than what Google did with Dell etc, which btw even you quote here? Its all about money: Google used money to buy into it, so did MS — why add the monopoly color to it?

    Sorry Om, unless I am really misunderstanding things .. you show yet again that its hard to find balanced view on Gigaom — you stink of anti-MS and (perhaps hence) pro-Apple/pro-Google bias.

  2. jimconnolly Monday, June 2, 2008

    @Piyush
    I appreciate what you are saying, however, I have learnt from my own blog that whenever you say ANYTHING that is either pro or anti Microsoft, Apple or Linux – you get accused of being a hater or fanboy.

    I believe MS LIVE search is very poor – BUT – I REALLY want it to get better. Google’s domination of the search market is helping no one other than Google. They deserve to be be top of the pile because their search product is soooo good – but I am a fan of competition too.

    Thus, I was pleased to hear Bill Gates announce last week, that one of his pet projects is to ‘make Microsoft the best in search’.

    Let’s hope search becomes more competitive and that it’s achieved through innovation and not JUST financial muscle.

    Jim Connolly
    http://www.thetechnewsblog.com

  3. Yeah, this really irks me. It’s sad too that the only way Microsoft can compete with the other innovative incumbents in the search market is to embed the search. They must be hoping the same thing will happen to Google, Yahoo, etc. that happened to Word Perfect with Microsoft Word…Hopefully consumers will see through it.
    http://enflate.com

  4. Piyush.

    Stop being so appalled! In case you were asleep for the last 30 years, Microsoft has the longest history of using its monopoly money to buy and squeeze out competition. Google may have paid for placement as you claim, but against the monopoly of the Microsoft desktop. They have a better product and users that are knowledgeable will re-set their browsers due to that.

    The others, the ones MS is depending on only use whatever is default. That is how they killed off so many competitors in the past!

  5. Sorry, Piyush is right. Google and Microsoft are doing the exact same thing. When Google does it, it’s okay. But if MS does it, it’s “using its monopoly money.” Please.

  6. Piyush Agarwal Monday, June 2, 2008

    @Jim:
    Agreed. On ALL the points. Well said.

    @Stephen:
    You bleed MS-hatred. If only _you_ were not sleeping, you’ll realize that MS did what *exactly* Google did. Why can’t you look at it objectively without MS’s baggage of baddies done over the last 2-3 decades?

    @Impatient:
    Yep. Exactly. Gigaom, very unfortunately, feeds into this media-loved David-Goliath trend and MS haters. *Anything* good or bad, if its about MS — stay back, armor on, screaaam, its a monopolistic move. How dumb! Om just fell to a new low atleast IMO.

  7. Piyush Agarwal Monday, June 2, 2008

    Just clarifying, am no fanboy or hater of any of the companies involved. Nor do I mean to degrade Om — I just voiced my opinion and made an observation.

    Hope you keep your standards up Om, I sincerely hope so!

  8. And in our part(India), HP / Compaq computers are sold with FreeDos OS installed [reduces the price by atleast Rs 2,000]. So this deal makes little sense in our market :-)

    As far as consumer empowerment, I really love HP for pushing AMD in India as well as FreeDos and let consumer do what he wants.

  9. Dude — they are doing exactly what Google and Yahoo do all the time — pay PC manufactures to set the search as the default — this article represents a significant knowledge gap in the overall search marketplace. I would encourage readers to turn to John Battelle’s Searchblog for a more accurate picture of what is happening in search.

  10. @ Piyush Agarwal

    I think you didn’t really read the article before posting your response. What I wrote was precisely what you said – this was a company strategy for the longest time – buy placement or use desktop as a leverage and grow market share. Aka distribution. Google and Yahoo simply out hustled it on that and as a result it caused some problems. Now they are going back to the time-tested strategy that has won market share for them.

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