Adobe Systems said Google had agreed to pay the multimedia software maker a "significant" amount to distribute Google's Web search software over several years.SAN FRANCISCO—Adobe Systems Inc. said on Wednesday Google Inc. had agreed to pay the multimedia software maker a "significant" amount to distribute Google's Web search software over several years.
Adobe said it had begun distributing Google search software with new downloads of Adobe's Macromedia Shockwave multimedia playback software, which allows users to view interactive Web programming such as games, entertainment, business presentations, and advertisements via a Web browser.
This and similar recent deals to pre-install Google software marks a change of course for the icon of Web search, which historically has incurred little upfront cost to attract customers to its services. Instead, it has shared a portion of advertising revenue with partners who drive traffic its way.
The deal calls for users to receive Google Toolbar Web search software each time they download Adobe's Shockwave player for use with an Internet Explorer browser.
A Google spokesman was not immediately available to comment on the agreement with Adobe.
Shares of Google rose 3.9 percent, or $14.96 to close at $402.13 on Nasdaq ahead of news of the Adobe deal -- the first time Google has closed above $400 since world stock markets began a sharp slide in mid-May. In extended hours trade after Adobe announced the deal, Google shares edged up to $402.50.
The gains came after new data by comScore Networks showed Google had posted further gains in the U.S. search market during May. Its closest rivals, Yahoo and Microsoft held steady, avoiding the market share losses of prior months.
Next Page: Warding off Microsoft's search challenge.
WARDING OFF MICROSOFT SEARCH CHALLENGE
Google is racing to do deals with software and computer makers to ensure convenient access to its search software ahead of the arrival of Vista, the new version of the Windows operating system, due out over the course of the coming year.
Vista is preparing to offer Microsoft's own search system as a default setting in Vista, potentially undermining Google's dominance of the consumer Web search market.
"The popularity and reach of Adobe technology gives Google even broader exposure to a growing base of consumers," Shantanu Narayen, Adobe's president and chief operating officer, said in a statement.
The Shockwave player runs on an estimated 55 percent of Internet-ready desktop computers, Adobe said.
"We expect the agreement to represent significant revenue to Adobe over a period of years," Narayen said.
Financial terms of the deal were not disclosed.
Adobe said revenue tied to the agreement has been factored into fiscal 2006 targets spelled out by the company last week.
Abode cut its revenue outlook for the 2006 fiscal year to around $2.54 billion to $2.60 billion, down from the $2.7 billion it had previously projected. It blamed weakening demand for other software products it offers to graphic designers.
Last month, Google struck a "toolbar" partnership with top computer maker Dell Inc., which analysts have speculated will involve big upfront payments to win prominent placement for Google's Web search and other services on Dell PCs. Google has declined to comment on the payment structure.
Google chief executive Eric Schmidt said in a conference call with Wall Street analysts three weeks ago that Google was looking to do more big-name partnerships instead of growing through big merger deals in order to expand its customer base.
ComScore said Google's share of the U.S. market last month grew to 44.1 percent, up a percentage point over April, continuing a surge that has added 6.6 percentage points of market share during the last year.
Yahoo sites attracted 27.9 percent of U.S. Internet searches in May, while Microsoft sites handled 12.9 percent.
Separately, rival Internet measurement firm Nielsen//NetRatings said its data for May showed Google taking 49.1 percent of the U.S. search market, compared with Yahoo's 22.9 percent and Microsoft's MSN, with a 10.6 percent share.
