Overture Results to Appear on HP Computers

In a break from tradition, paid search leader Overture will deliver its listings to users not through its usual deal with Web portals, but by way of a new agreement with computer manufacturer Hewlett-Packard .

Through the arrangement, Palo Alto, Calif.-based HP will present new users of its Pavilion line of notebook and desktop PCs with results from Overture’s search engine, in which advertisers pay for premium positioning based on search terms. HP will bundle co-branded search pages available through the “Search the Internet” button on the Pavilion Desktop PC’s keyboard, on the default Web start page, and as the default search engine on the computers Web browsers.

Pasadena, Calif.-based Overture typically has deals with portals — some of which in turn deal directly with PC makers to have their sites and search engines pre-installed on new computers. For instance, Overture has deals with Microsoft’s MSN and AOL Time Warner .

“Overture is pleased to begin this new relationship with HP. This agreement represents a new opportunity for us to bring together our 53,000 advertisers with HP’s first-rate users,” said John Gentry, senior vice president and general manager, affiliate business group, Overture. “This agreement demonstrates Overture’s ability to extend the value of our search product into new distribution channels.”

Meanwhile, its new partner said the arrangement would benefit users.

“HP is committed to delivering Internet solutions that make customers’ computing experience more productive and efficient,” said Pendy Pendyala, general manager at HP’s Wireless and Internet Solutions division. “This agreement with Overture will allow HP to deliver an award-winning search experience to our desktop and notebook PC customers.”

For Hewlett-Packard, which receives a cut of Overture’s cost-per-click keyword ads through the deal, the partnership also stands as a way to increase incremental revenue as tough conditions persist for PC manufacturers — and as the firm looks for ways to skim money in advance of its proposed merger with Compaq . While the results of a shareholders’ vote on the merger have yet to be fully tabulated, HP has said it plans to move forward with merger-related cost-reduction efforts, including layoffs that could affect 15,000 to 24,000 employees of the combined company.

Meanwhile, the signing of HP as a new syndication partner comes as Overture is facing new competition from Google, which in recent months began distributing its own paid search listings to portals. (Overture filed a lawsuit against Mountain View, Calif.-based Google last week, citing patent infringement.) Longtime rival LookSmart also has taken steps to ward off the upstart’s mounting threat, last month acquiring WiseNut, a smaller player that uses search technology similar to Google’s highly-regarded engine.

Overture also must contend with the possible expiration of its syndication agreement with AOL Time Warner and Yahoo . After being extended a month, the contract with AOL is up for renewal at the end of April, while Overture’s work for Yahoo expires in June, and is renewable quarterly. Both AOL Time Warner and Yahoo use Google results for portions of their sites.