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Dell: Paid Inclusion, Of A Stripe

By - May 25, 2006

When I read this in the Journal today, I thought, “isn’t this deal already done?” Then I remembered that, no, it was simply discussed, but not inked. So now it’s official – Google is playing the distribution game, just like Microsoft does. From the (paid reg required) article:

Google Inc. and Dell Inc. have reached an agreement to install Google software on millions of Dell personal computers before they are shipped to users, said Google’s Chief Executive Eric Schmidt.

Under a roughly three-year pact, Google, of Mountain View, Calif., would pay Dell to have its desktop software for searching the content of a user’s hard drive and emails, and a Web browser search toolbar installed on the computers, according to people in the industry familiar with the matter. Dell would also set the default search engine for users to Google’s offering, one of the sources said. Financial terms are not expected to be disclosed. Talks between Google and Dell were first reported in The Wall Street Journal in February.

My take on this: I’m not entirely sure how to think about this, beyond the obvious. Sure, this makes sense from a business standpoint, but Google did not get to become Google by cutting exclusive distribution deals. It got there by having the best product, a product that folks literally climbed over walls to get to. These kind of deals are, well, pretty pedestrian – they are pay for play: paid inclusion, of a sort. And I thought that was not a very Googley thing to do.

On the other hand, it’s not 1998 anymore. Times have changed, and if Google is going to keep abreast of its competition, it needs to act like any other company.

Now ain’t that something!


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6 thoughts on “Dell: Paid Inclusion, Of A Stripe

  1. There are several reasons why this is a SMART and PRACTICAL idea.

    … Every has heard of Google – most USE it,
    It is fast loading, and has an easy to type URL

    …so many of that group that uses MSN are casual surfers who are doing that probably because the search page is ALREADY there by default – it is easier and quicker than typing Google into the address bar.

    The majors are now all pretty relevant for the casual surfer
    or the casual shopper (including AOL). And whether they click on the SERPs or the PPCs, first, most non-demanding users will be satisfied with page one.

    Getting that Casual surfer (who would be just as happy with google as MSN) will add to Google’s search share and perhaps get more clicks on the PPCs.

    Vista releases will default to MSN, which Google complained about – so this strategy, will “soften the blow”.

    Windows Live is offering desktop search, and VISTA may have it embedded – so Google is being equally strategically proactive.

    Yahoo is also strategizing the best it can by forming high profile partnerships and social networking acquisitions, apparently they can not do what MSN or Google are doing.

  2. JG says:

    One interesting point is that this news.com article makes it sound as if, straight out of the box, customers will have the option of choosing between Microsoft and Google. Or am I reading it wrong? But if that’s the case, then that actually is an admirable bit of integrity on Google’s part, after all the whining they’ve done in recent weeks about MSN Search being the default on IE. Google has wanted Microsoft to prompt users for the choice. So if Google is actually doing the same, by prompting users out of the box, I wholeheartedly applaud that.

    However, if this is not the case, as someone who has bought Dell in the past, I will no longer buy Dell. Prebundled Google software is essentially adware. Yes, the service is nice, but it opens up a huge ad funnel straight into my computer. I don’t care how good Google is; I think this is a terrible and momentous step forward in personal computing.

    It actually makes me wonder, with all this rhetoric about consumer choice, how much choice Google is actually willing to tolerate. For example, if I choose Windows as my operating system on a new computer, what if Windows then turned around an offered me three choices at install time: (1) Use MSN as my search, (2) Use Google as my search, or (3) Use Google as my search, with all the ads stripped away.

    Tools like this exist. Greasemonkey with the proper scripts, for example, works like a charm. So what if Microsoft were to build a similar tool into their OS? They of course wouldn’t turn it on by default.. that would be evil and unfair and monopolistic. But what if they actually gave users the choice of turning it on, for themselves? Easily? I’ll bet lots of people would make that choice. Greasemonkey for the masses.

    Bring it on, Microsoft. Please don’t let them turn my PC into an ad machine. Well, unless you are also planning on turning my PC into an ad machine, integratedly, in Vista. Then, well, knock it off, too. With all respect to everyone here that makes their living this way, I really am sick of ads.

    Darn the pandora’s box that Overture opened up, so many years ago.

  3. Two thoughts:

    a) These kinds of deals open up yet another way for PC manufacturers to differentiate themselves: “buy from us and you get a clean PC with no ads or sponsored software bundles”. Many people would probably pay more to get less (i.e., no preinstalled extra software that they have to figure out). I am tired of hearing that PCs are commodity products: that’s only true because high-tech marketing tends to be incompetent.

    b) The specific deal is the start of users getting a share of the excess cash that their search behavior is generating for the search engines. Yes, at first it’s Dell that’s scoring money for doing almost nothing, but eventually this will filter back to customers in terms of lower PC prices. Finding other ways of getting users their search money back will be one of the big stories in the coming years.

  4. JG says:

    Jakob: I wish I shared your optimism about advertising $$ filtering its way back to consumers in terms of lower PC prices. I don’t believe it. I don’t believe it, because I don’t see it in other areas. Take video games, for example. Games in one form or another have been a part of my life since the Atari 2600. And in relatively recent times, you’ve started to see advertising being introduced into the games themselves. Play a driving game, and the billboards along the virtual road will have real ads from real companies.

    And has this translated into lower video game prices? No. New releases, including those with ads, are still $50. And for the newest gen consoles, they’ve gone up to $60. Ads just keep expanding into everything. And as everyone starts doing it, it blends into the normal mode of doing business; there are no trickle-down price reductions.

  5. First off, well said JG. The deal to me appears to be a clear case of Google’s hypocritic stance: on the one hand Google takes Microsoft to court to get it to change the “default” search engine in MSIE – claiming that openness and parity needs to be ensured by offering the customer the choice to choose a search engine; on the other hand Google pays Dell to get its products installed as the defaults on PCs. Sorry, I’m not buying the “Don’t be evil” motto here. If it’s Google waking upto the fact that it’s not 1998 anymore, then it shouldn’t sell us the belief that Google’s installing all these products to make my search experience better. Honestly, I’m a little disappointed with Google here.

  6. Max says:

    In a few years Google will get worse then Microsoft now. Everything (almost) in the internet-business is connected mit Big G.

    Google is changing. And I don’t think to its’ best.