Dell on Wednesday said it is in the testing stage of plans to load Google’s search and other branded software onto new Dell PCs. While Google has repeatedly denied rumors of its supposed plans to market hardware of its own in the future, the company joined with Dell to affirm that a deal is indeed in the works between the two, with industry analysts indicating computers coming in the spring may offer a first look at the fruits of their partnership.
Neither Google nor Dell would respond to requests for comment. The pair did confirm, however, that the software includes search and other toolbar technology.
Beyond a Browser War
Dell is not the first computer maker Google has partnered with. The company has struck similar pre-loaded software deals in the past, namely with Apple and HP.
This latest deal would broaden Google offerings beyond a toolbar, however, and is thus viewed by some as the biggest PC real estate move since the browser wars of 10 years ago.
“By establishing a link to computers, they can put more stuff on there down the road,” Gartner Research Vice President Martin Reynolds told TechNewsWorld.
Redefining PC Real Estate
Although previous, similar arrangements between major portal players such as AOL and PC manufacturers have failed, Google is looking to redefine what getting “PC real estate” means via placement of its toolbars and other browser-related offerings, according to Endpoint Technologies Associates Founder and President Roger Kay.
“This is a bigger deal,” he told TechNewsWorld.
Google realizes the importance of being the default software preloaded on a PC, he added, and noted that in the future, the cost of that computer real estate is likely to go up.
“This is a critical place,” he said. “The value of the real estate is increasing, and Google realizes now is the time to get it.”
Buy In to Tie In
The benefits of attracting a broader audience and new users might seem clear, yet the price to be paid by Google for such a deal remains uncertain. The matter has added to Wall Street woes for the company, which some worry is prone to seeing declines in its typically hefty profit margins.
Some have questioned whether Google could be overpaying for marketing to customers it might already be able to get with its brand recognition and reputation, but the software company believes it can make money from such a deal, Gartner’s Reynolds told TechNewsWorld.
“From Google’s perspective, it’s really buying eyeballs,” he said. “They obviously think they’re going to get more customers. This is a way to hit everybody who buys a computer.”
Furthermore, by establishing a link to PCs, Google can also add to and enhance its default software offerings in new computers, he added.
Moreover, bidding battles taking place among Google, Yahoo, Microsoft and others looking to pre-load the latest PCs with their software are good for manufacturers that have seen their profit margins shrink in recent years, Reynolds said.
Cash for Computers
The PC makers have nothing to lose by agreeing to such deals, EndPoint’s Kay said, but Google has a lot to gain through pre-installation on PCs.
“Being the default matters, because people are lazy,” he concluded.
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