"START IT UP..."
(UPDATE: Reuters has a relevant follow-on story on the subject of this post)
As this New York Times story today highlights, Google is aggressively blending communications services like Google Chat with it's Gmail service. This is significant because Gmail is Google's largest service that requires users to sign-in with registration data. And sign-ins and registration data are the first steps to establishing trust for other services that down the road require credit cards and setting up payment services.
Much like most Google services, Gmail has grown mostly through word-of-mouth and viral marketing efforts by Google. The next logical step for Google is to get more aggressive about "acquiring" new users through traditional marketing efforts.
It's in this context that this front-page story in the Wall Street Journal today titled "Pressuring Microsoft, PC Makers Team up with it's Software rivals", caught my eye.
The article goes on to say:
"It takes only about five minutes to set up a new personal computer by clicking through a series of introductory screens. In that time, however, many consumers choose software and services they will often use for the life of their machine. Historically, Microsoft Corp. held great sway over this "first-boot sequence" as well as other software preinstalled in the factory.
Now PC makers including Hewlett-Packard Co. and Dell Inc. are beginning to take more control over this crucial real estate. They increasingly are trying to sell this space to service providers and software makers, such as Google Inc. After a year of sometimes tense negotiations with Google and PC makers, Microsoft has ceded ground on some key technical details.
In what would be the most significant example of this shift, Google is in serious negotiations to get its software installed on millions of Dell PCs before they are shipped to users, according to people familiar with the matter. Under the deal being discussed, Google, of Mountain View, Calif., could pay Dell fees approaching $1 billion over three years, these people estimate."
PC makers have long marketed their real estate to all comers, especially after the flexibility provided them after Microsoft's settlements with the Justice Department a few years ago. So that part is not new.
What's new is that the last company that could offer hundreds of millions of dollars for desktop space on new PCs was AOL, in order to acquire customers for it's dial-up access services. Now it's Google, offering a billion dollars over three years to just one PC vendor.
Google is starting to proactively acquire customers, just like AOL did in it's early days, and in it's heyday.
As the Journal elaborates,
"Google pays it $1 for every PC that ships with a Google toolbar -- a strip that sits atop a browser and enables users to easily operate Google's search engine -- and another 75 cents the first time a home-computer user taps the service, says a person familiar with the matter."
And Google's taking this to the next logical step:
"Under a scenario Google and Dell are discussing, Dell would set up PCs to run a few Google products straight out of the box, including software to search PC hard drives and its toolbar browser."
It'll be interesting to see if Google's email service is eventually also marketing through these types of deals, especially as the company fuses other communications services like instant messaging into GMail.
As Microsoft readies it's next major version of it's operating system, Vista, for release later this year, with an integrated new browser, the tug of war between Microsoft and everyone else has already begun on what default choices will be offered to new users.
And Google's in there along with all the other usual suspects, duking it out for their fair share.
It's a horse race again.
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