The Internet media company, Yahoo Inc. of late said it has struck a deal with Hewlett-Packard Co. to plant its Internet search engine on millions of computers in North America and Europe, the latest volley in a high-stakes battle with Google Inc. and Microsoft Corp. In addition, Yahoo would be the default search portal when HP computers start shipping with Internet Explorer 7 later this year.
The alliance unites two companies trying to catch up to the longtime leaders in their respective fields.
Yahoo spokeswoman Kelly Delaney said financial terms were not being disclosed.
Effective immediately, Yahoo’s home page will be featured on consumer PCs in Europe, Yahoo said in a statement. In North America, HP consumer PCs will come with an Internet browser toolbar that features links to Yahoo services, and Yahoo will be the preferred search service on the forthcoming Internet Explorer 7 browser.
Competition between Yahoo and Google has been fierce for placement in computers shipping the next-generation Internet Explorer browser. Yahoo is in race with rival Google Inc. to win exclusive positioning of their services within the products of major hardware and software makers. The competition anticipates the arrival of a new version of Microsoft’s Internet Explorer, the dominant software for browsing the Web.
Sunnyvale, California-based Yahoo ranks a distant second to Google in the lucrative search engine market while HP, headquartered in Palo Alto, California, ranked second in the world when it came to computer sales, according to industry research.
The deal gives HP computer users instant access to Yahoo search, e-mail, news and finance links.
HP Manager Bob Lund referred to the arrangement with Sunnyvale, California, based Yahoo as an "ideal combination." Pre-installing Yahoo software on HP computers would give buyers "instant access" to Yahoo services such as e-mail, instant messaging, news and finance, according to the companies.
"This relationship is an important component of Yahoos overall strategy to partner with leading global brands that will enable us to further extend our products and services to the world’s community of Internet users," Yahoo chief Dan Rosensweig said in the release.
The agreement requires HP to set up its desktop and notebook PCs in North America so Yahoo’s search engine appears in the toolbar of Microsoft’s Internet Explorer 7, the next version of the Web’s most widely used browser. Yahoo is hoping that the tool bar will generate more search requests, providing a springboard for more ad revenue.
For PCs sold in Europe, HP will program the settings so Yahoo will be the automatic home page.
Microsoft is counting on the next version of its Windows operating system, due out early next year, to help it become a bigger factor in search engine advertising.
While Google has signed a string of such deals with No. 1 PC maker Dell Inc. and software makers like Adobe Systems Inc., Intuit Inc. and media companies like News Corp., but in recent weeks Yahoo has shown momentum and responded by signing similar partnerships with PC makers Acer Inc. and now with HP.
The multiyear distribution deal with Acer calls for Yahoo Web services to be featured on Acer computers. Acer is the world’s No. 4-ranked computer notebook maker, the top supplier of PC notebooks in Europe, and the third-ranked manufacturer in Asia.
Similarly, Yahoo has existing deals to feature its Web search tools with major broadband communications providers in Britain, Canada and the United States.
Google and Yahoo are hoping their respective deals with the world’s top PC makers will help them counter any advantage that Microsoft may get from its updated operating system.
Although Yahoo remains the Web’s most trafficked destination, the company hasn’t been able to narrow Google’s huge lead in Internet search — a factor that has crimped its earnings growth and battered its stock this year. The company already has warned its revenue for the current quarter will fall below Wall Street expectations.
On other fronts, Yahoo’s long-standing position as the most-viewed Web site is being challenged by News Corp.’s MySpace.com, a social networking destination catering to teens and young adults. To counter the threat, Yahoo is rumored to be exploring a possible acquisition of Facebook.com, the second-ranked social networking site, for between $800 million and $1 billion.
HP, the world’s largest technology company, is grappling with its own problems. Determined to plug a boardroom leak, HP authorized a probe that relied on a ruse to dig up the personal phone records of at least 18 people. The deception triggered a scandal that is now the subject of criminal and congressional investigations.
Yahoo did not disclose how much it will pay HP to spotlight its search engine — a detail that Google also left out in its Dell deal.