Microsoft Says HP Deal Will Help Counter Live Search Brand Challenges

In the wake of its failed $47.5 billion takeover bid for Yahoo, Microsoft has signed a deal to install a Live Search toolbar in all Hewlett-Packard consumer PCs distributed in the United States and Canada, replacing Yahoo as the default search page. The deal takes effect January 2009.

The arrangement could be a major boon for Microsoft’s search profile, which continues to lag Google and Yahoo.

HP is the world’s largest manufacturer of personal computers. According IDC Worldwide, HP shipped 3.9 million PCs in the United States during the first three months of 2008.

A Microsoft spokesperson declined to say precisely how much more exposure the deal could represent for Live Search, but wrote in an e-mail “we certainly expect this deal to impact marketshare…. We’ll be watching the public reporting from ComScore and others, as always.”

For the month of April, Google’s share of the search market in the U.S. rose to a record 61.5 percent, while Yahoo’s dipped to 20.4 percent and Microsoft’s to 9.1 percent, according to ComScore.

Microsoft’s declining share is not due to an inferior product, but simply a lack of exposure for the brand, said the Microsoft spokesperson — a situation that could be remedied by deals like the one with HP.

“We’ve stated publicly that we have some challenges with our brand awareness. There are still people who don’t know about Live Search, despite it being an excellent search product,” the spokesperson wrote. “That being the case, this sort of distribution deal is a great way to get the product in front of millions more consumers to enable them to discover all our great features.”

In a statement announcing the news on Monday, Kevin Johnson, president of Microsoft’s platforms and services division at Microsoft, called the HP deal “the most significant distribution deal for Live Search that Microsoft has ever done.”