Dell Testing Google Software Package Install on New PCs

Yesterday, PC giant Dell admitted that it was testing a package of Google software on its new PCs, setting the stage for a second round of desktop competition for Microsoft. The first round came 2 years ago, when the world's largest PC maker started offering Corel WordPerfect products on its PCs. Since then, Corel has reported millions of new users each year, thanks to PC bundles.

"We can confirm that we're running a test with Google that could include a Google-powered Dell home page, Google Desktop search, and a Google Toolbar," a Dell spokesperson said, responding to rumors that Dell and Google had been working together. Google is also reportedly working with HP, the world's second largest PC maker, but HP has refused to comment.

What's interesting about this development is that Google apparently beat competing offers from Microsoft and Yahoo, both of which were eager to get their Internet and file-search technologies on Dell's PCs and home page. Google now hopes to see its search tools added to more than 100 million new Dell PCs, according to reports. Responding to the developing situation, Microsoft Director Neil Charney told Reuters, "Our goal is to continue working closely with our \[PC makers\] to empower users with clear ways to find, organize, and use information that matters to them."

Although it's a bit early to declare Microsoft's Windows monopoly seriously threatened, Microsoft originally secured its dominance by locking up the PC desktop and artificially bundling software products. In the mid-1990s, the software giant brought a federal antitrust lawsuit down on itself when it illegally coerced PC makers into excluding competitors such as Netscape from PCs. Microsoft was also charged with threatening IBM not to include its IBM Lotus SmartSuite office productivity packages on IBM PCs. When IBM demurred, Microsoft withheld its Windows 95 license.

Today, even attempting such coercive tactics is a lot harder. Closely regulated by antitrust watchdogs around the world, Microsoft can't wield the same control it once did over PC makers. And Dell, with its ever-increasing slice of the PC market, obviously feels it can begin exerting some control of its own. For a company as cost-conscious as Dell, Google's superior deal was no doubt familiar territory: Dell consistently pits parts suppliers against one another to get the best prices. In such an open market, it seems, Microsoft doesn't always win.