September 14, 2006 12:00 am

Yahoo and Acer in display deal

Yahoo has joined the race among the internet search giants to grab a more prominent position in front of computer users, sealing a deal with Acer, the world’s fourth-biggest PC maker, to have its services displayed.

The move echoes a ground-breaking deal between Google and Dell that will put the most widely-used search engine prominently in front of anyone buying a new Dell machine.

The scramble for a visible place in front of consumers has been prompted in part by the imminent arrival of Microsoft’s next internet browser, known as IE7.

Microsoft has said it plans to use its own search engine as the default option for all searches conducted through the browser.

Google has complained to competition watchdogs in the US and Europe about the Microsoft tactic, claiming the software company is planning to use its Windows monopoly to try to dominate the search business.

The US authorities have already indicated that they are unlikely to try to block Microsoft’s move.

Dan Rosensweig, Yahoo’s chief operating officer, said the deal with Acer was a broader one to promote the company’s services, not one solely prompted by the impending arrival of IE7.

“We would have done this relationship independent of anyone,” he said.

Yahoo’s search engine will be set as the default on Acer computers that are shipped with the new browser, the two companies said.

They also said that, when opening a browser, users would see a co-branded start page and toolbar that provides quick links to a range of Yahoo services.

For Yahoo, the arrangement provides a way to extend its reach further into markets in Europe and Asia where it does not have the clout that it enjoys in the US and Japan.

Acer shipped nearly 10m PCs last years, roughly a quarter of the number shipped by Dell, according to iSuppli.

According to Gartner, however, it was the leading supplier of notebook computers in the Europe, Middle East and Africa region in the second quarter of this year.

Other PC makers, including Hewlett-Packard, the second-biggest PC company, have also had discussions with internet companies about exclusive deals to distribute their services.

For the hardware companies, the relationships represent a way to earn extra revenue by acting as a distribution channel, either by way of a straight fee or through a share in any advertising revenue that users of the internet services generate.

“It’s a valuable piece of real estate that can be leveraged,” said one person familiar with HP’s deliberations.

Yahoo and Acer refused to disclose the terms of their relationship, though they described it as a “multi-year” deal.

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