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Deal may aid Microsoft search

Firm's toolbar will be offered to downloaders of Sun's Java software.

November 11, 2008|Jessica Guynn | Guynn is a Times staff writer

SAN FRANCISCO — Microsoft Corp., a distant third in the search market, has signed a distribution deal with a former foe in a bid to increase its share of search traffic.

U.S. Web surfers who are downloading Sun Microsystems Inc.'s Java software will be asked whether they would also like to download a toolbar featuring a Microsoft Live Search box, under the deal announced Monday.

The Java software, which is needed to view some websites, is on 800 million desktops worldwide -- more than 9 out of 10 personal computers connected to the Internet -- and gets tens of millions of downloads each month, according to Sun. The companies did not disclose the financial details of the pact. Sun has had similar deals with Google Inc. and Yahoo Inc. in the past.

Striking distribution deals is a key part of Microsoft's plan to catch up to Google.

"This is the beginning of the execution of a new strategy for us," said Brad Goldberg, general manager of Microsoft Live Search. "Building out distribution is one of the key things we are focused on."

Microsoft, based in Redmond, Wash., has been looking for ways to gin up more traffic since abandoning its effort to buy Yahoo in May. Microsoft Chief Executive Steve Ballmer last week dismissed speculation that he was still interested in buying Yahoo.

Microsoft is battling Google, which dominates search. Yahoo ranks second. Google snared 63% of the U.S. Web search market share in August, leaving Yahoo with 19.6% and Microsoft with 8.3%, according to research firm ComScore Inc. Several analysts believe that Microsoft will still attempt to buy Yahoo's search business.

Microsoft seems focused, for the time being, on other strategies such as distribution pacts. Its biggest coup so far was striking a deal with Hewlett-Packard Co. to make its search engine the default on all personal computers shipped in the U.S. and Canada starting in January 2009.

This time, Microsoft has teamed with one of the primary adversaries from its antitrust battles. In 2004, Sun netted nearly $2 billion in a patent and antitrust settlement from Microsoft. The computer-server maker is now struggling, posting a $1.7-billion loss last quarter.

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jessica.guynn@latimes.com

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