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HP Agrees to Highlight Yahoo Sites on New PCs

September 29, 2006|From Bloomberg News

Yahoo Inc. said Thursday that it reached an agreement with Hewlett-Packard Co. to distribute the Web giant's browser toolbar software and to make Yahoo the default home page on some new computers.

Computers sold in Europe will be set to show Yahoo's home page when users open an Internet browser, and customers in North America will get a co-branded search toolbar, Sunnyvale, Calif.-based Yahoo said.

Yahoo is seeking to lure more users to its websites and search engine through the accord with Palo Alto-based HP, the second-largest computer maker. Yahoo signed a similar agreement with Acer Inc., the fourth-largest PC maker, in September.

Google Inc. has a comparable agreement with Dell Inc., the No. 1 maker of PCs.

"The idea that you can be the default setting is a very good one," said Sue Feldman, an analyst with market research firm IDC. "People don't change their settings very often."

Yahoo also said that its search engine would be set as the default search method in Microsoft Corp.'s coming Internet Explorer 7 browser software on HP computers in North America.

Terms of the multiyear agreement weren't disclosed.

Yahoo is counting on agreements with computer manufacturers to drive more users to its search engine, e-mail service, and news and sports pages.

Making it easier for the customer to get to the things they want and the environments they prefer is always the best way to go," Yahoo Chief Operating Officer Dan Rosensweig said. "Businesses are built on eyeballs. The higher quality, the more distribution that you have, the more value you can create."

HP shipped 8.27 million PCs in the second quarter, accounting for 16% of the market, according to IDC. Dell was the biggest with 10 million, or 19%.

Shares of Yahoo rose 68 cents to $25.33.

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