Dell builds Google PCs, sort of

Mountain View (CA) - Dell and Google apparently have reached an agreement to ship PCs that come with a standard installation of a Google software package. According to media reports, the cooperation will be only the first in a series of deals.

The rumor of the Google PC has been making its rounds in Internet forums for several years. So far, we have not seen those speculations to transition into a real product and even Google executives typically take question about such a device with humor: "Is there a rumor?" said, for example, co-founder Larry Page at the Consumer Electronics Show in January of this year. On a more serious note, spokespeople told TG Daily back then that those rumors were "an idea out of the blue sky."

But Google does not necessarily need to build a system to get its name onto a desktop. Media today reported that the company in fact followed up on an announcement made by Google and Dell last February, which said that Google software would be installed on Dell PCs. Details of the negotiations have been kept secret, but some sources suggested back then that Dell would put Google on up to 100 million computers at the factory level.

According to Bloomberg News, Google will be paying Dell a fee for every PC that is shipped with Google software. Google is likely to be able to regain the cost through an increased user crowd that will boost the firm's already strong advertising sales. Jordan Rohan, an analyst at RBC Capital Markets in New York told Bloomberg that "a payment by Google of $5 for each PC would be made back in about 12 clicks by users on a Google ad."

The Dell-Google deal is considered widely as a setback for Microsoft, which had its place on Dell desktops for several years. In any case, a standard Google installation on Dell computers represents yet another challenge for Microsoft to gain dround on Google's dominance in the search market and may weaken the firm's strategy to attract users through a richer serach capability in Windows Vista.

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