Yahoo has inked a deal with Hewlett-Packard to feature its browser start page and search engine, along with a co-branded toolbar, on HP’s consumer desktop and notebook PCs in Europe and North America.
The deal announced Thursday echoes one Yahoo signed earlier this month with Acer (see Acer PCs to Offer Yahoo Search).
Acer PCs to Offer Yahoo SearchYahoo has been competing with both Google and Microsoft to get its search engine onto more PCs, especially as Microsoft gets set to begin shipping Windows Vista and a final release of Internet Explorer 7 in the months ahead.
MicrosoftIn May, Google struck a deal with Dell to make its search engine the default and to bundle Google’s browser toolbar and Google Desktop software on Dell’s PCs (see Google Goes on Dell PCs).
Google Goes on Dell PCsPalo Alto, California-based HP will begin including the co-branded Yahoo-HP toolbar on its consumer PCs in North America right away. The Yahoo start page on HP consumer PCs in Europe will also be available immediately.
Yahoo will also become the default search engine on HP consumer PCs in North America when Microsoft debuts IE 7, which is expected to be available later this year.
The start page will give Yahoo users quick access to services like Yahoo’s email, news, and finance information, and probably encourage new computer users to sign up with the Sunnyvale, California-based company as well.
“This relationship is an important component of Yahoo’s 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 COO Dan Rosensweig said in a statement.
Yahoo shares rose $0.11 to $25.45 in recent trading Friday, while HP shares climbed $0.82 to $36.79.
Building a Presence
The deal will give Yahoo more of a presence in the consumer PC market. IDC estimates that HP has 25 percent of that market.
Merrill Lynch analysts Justin Post and Han M. Pham estimated that Yahoo would pay a “bounty” of between $1 to $3 for each PC that HP ships under the deal, as well as a share of the revenue from Yahoo advertising generated on HP PCs.
analysts Justin Post and Han M. Pham estimated that Yahoo would pay a “bounty” of between $1 to $3 for each PC that HP ships under the deal, as well as a share of the revenue from Yahoo advertising generated on HP PCs.
“We view the HP deal as moderately positive for Yahoo as the company remains competitive for distribution deals despite lower current search monetization versus Google,” they wrote in a research note.
Since the deal is for consumer PCs only, that leaves room for other partners for HP on its business-oriented PCs in both North America and Europe, they pointed out.
A Yahoo spokesperson declined to comment on the financial terms of the company’s arrangement with HP, or whether it was pursuing placement deals for the business PCs as well.
“I think the deals certainly put Yahoo in a good position to distribute its search engine worldwide,” said the spokesperson, who asked not to be identified, but who was speaking on behalf of another Yahoo spokesperson, Kelly Delaney. “I can’t confirm it’s part of a greater effort, but they’re certainly always looking for deals to get Yahoo ahead of more consumers.”
can’t confirm it’s part of a greater effort, but they’re certainly always looking for deals to get Yahoo ahead of more consumers.”
The news late Thursday came as a positive development for HP on the same day CEO Mark Hurd and former chair Patricia Dunn faced intense questioning from Congress about HP’s probe of boardroom leaks, with general counsel Ann Baskins resigning and pleading the Fifth Amendment (see Mark Hurd in the Hot Seat and HP’s General Counsel Resigns).
HP’s General Counsel ResignsContact the writer:MCohn@RedHerring.com
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