The two firms have linked arms in a multi-year agreement that will see Google’s Toolbar included with various Adobe products.
As part of its recent push to have its Web browser toolbar installed everywhere around the world, Adobe Systems Inc. lately said that Google Inc. had agreed to pay the multimedia software maker a "significant" amount to distribute Google’s Web search software over several years.
Adobe said the first product to be bundled with Google Toolbar will be Adobe’s digital media player, Macromedia Shockwave Player, which allows users to view interactive Web programming such as games, entertainment, business presentations, and advertisements via a Web browser.
It will be offered as part of the Shockwave installation process for Internet Explorer on Windows. Adobe says that Shockwave is installed on more than 55 percent of Internet-enabled desktop computers.
Warding Off Microsoft Search Challenge:
This and similar recent deals to pre-install Google software marks a change of course for the icon of Web search, which historically has incurred little upfront cost to attract customers to its services. Instead, it has shared a portion of advertising revenue with partners that drive traffic its way.
The deal calls for users to receive Google Toolbar Web search software each time they download the Shockwave player for use with a Microsoft Internet Explorer browser.
Under the terms of the agreement, the Google Toolbar will also be offered as part of other Adobe product installations in the future. The company declined to specify which ones.
The move is seen by some observers as an effort to outflank Microsoft, especially as Internet Explorer 7 nears its formal launch this summer. The next version of Microsoft’s Web browser software will default to MSN search rather than Google.
Google is racing to do deals with software and computer makers to ensure convenient access to its search software ahead of the arrival of Vista, the new version of Microsoft’s Windows operating system, promised for final release in January 2007.
Microsoft is expected to offer its own search system as a default setting in Vista, potentially undermining Google’s dominance of the consumer Web search market.
Interestingly, Google’s search toolbar will be available only when Shockwave is downloaded for use with Internet Explorer on Windows.
The Shockwave player has been downloaded 200 million times and runs on an estimated 55 percent of Internet-ready desktop computers, Adobe said.
"We expect the agreement to represent significant revenue to Adobe over a period of years," Narayen said.
Counter Strike:
The popularity and reach of Adobe technology gives Google even broader exposure to a growing base of consumers, Shantanu Narayen, Adobe’s president, said in a statement.
"Teaming up with Adobe is not earth-shattering," said Laura DiDio, a Yankee Group analyst. But the fact that they are doing it for Internet Explorer on Windows is Google giving another jab at Microsoft.
Jeffrey Mann, an analyst at Gartner, offered a similar take. "This is clearly part of a pattern," he said. Mann pointed out that Google is looking for many different ways to reach eyeballs, especially as the launch of Windows Vista and Office 2007 draws closer. Much like Internet Explorer 7, these Microsoft mainstays will default to Microsoft’s own search service.
Windows Vista is expected to be released for businesses later this year and for consumers in early 2007. Office 2007 is slated to be released next year as well.
Replacing Yahoo Toolbar:
Google Toolbar will be available immediately by default with the Shockwave player download, but users can opt not to install it. This is the second big Google Toolbar announcement in the past month.
Google Toolbar adds a Google search box to a Web browser to perform searches without going to the Google home page. It also has extra features like instant suggestions as you type in the search box, a spellchecker, and a pop-up blocker.
Google Toolbar also enables users to create bookmarks that are accessible from any computer, and share Web content with other users through Gmail, blogs, or text messaging for mobile phones.
The Google app replaces Shockwave’s current Yahoo Toolbar option, although the Yahoo option will continue to be bundled with downloads of Adobe’s Flash player and the Adobe PDF Reader, at least for now.
In May, Google struck a toolbar partnership with top computer maker Dell, which analysts have speculated involves big upfront payments to win prominent placement for Google’s Web search and other services on Dell PCs. Dell which is now preloading Google Desktop and Toolbar on its PCs, as well as adding Google Search to the Internet Explorer 6 side pane.
Google has declined to comment on the financial terms of the deal or payment structure.
Google chief executive Eric Schmidt said in a conference call with Wall Street analysts three weeks ago that Google was looking to do more big-name partnerships instead of growing through big merger deals in order to expand its customer base.
Adobe said revenue tied to the agreement has been factored into fiscal 2006 targets spelled out by the company last week.
Abode cut its revenue outlook for the 2006 fiscal year to around $2.54 billion to $2.60 billion, down from the $2.7 billion it had previously projected. It blamed weakening demand for other software products it offers to graphic designers.
Google continues lead and even gain in the search market. The just-released May comScore Networks analysis showed Google as the market leader for the tenth consecutive month 44.1 percent of searches (Google picked up a point over April’s 43 percent). Yahoo was in second place with 27.9 percent, while MSN ranked third with 12.9 percent. Google and Yahoo have 95 percent of the toolbar-based searches combined, with Google grabbing 49.1 percent of all toolbar searches.
Meanwhile, Adobe has been butting heads with Microsoft in the publishing space. The San Jose, Calif.-based software firm has voiced its opposition to Microsoft’s inclusion of saving files to Adobe’s PDF format in Office 2007.
A Google spokesman was not immediately available to comment on the agreement with Adobe.
Both companies have taken on a more openly adversarial relationship with Microsoft recently, with Google competing on search, online advertising, and even spreadsheets.