Dell Testing Google Toolbar

Google and Dell are testing search and toolbar placement pilots that could put the search giant’s software in the catbird seat with the world’s number one PC maker.

A Dell spokesman confirmed to internetnews.com that the computer maker is currently running a test with Google that includes some of Google’s products, including a Dell-powered home page, Google desktop search and a Google toolbar.

Beyond that, “we can’t comment further because it’s an unannounced product,” said Dell spokesman Bob Kaufman.

Tuesday’s Wall Street Journal reported that if the deal goes through — and that’s still an if right now — Google could pay Dell fees approaching $1 billion over three years, according to anonymous sources cited in the story.

Dell’s Kaufman refused to comment on the fees claim.

Not surprisingly, Google isn’t saying much about any Dell partnership since nothing appears to have been finalized. “What I can tell you is we are testing the distribution of various technologies with Dell,” said Google spokesman Jon Murchinson.

The deal, if it is finalized, would give Google one more thing to keep Microsoft awake about. As the Journal noted, Microsoft’s Chairman Bill Gates has sounded the alarm that any scenario of Google paying for software placement with PC makers could render Microsoft’s software business “increasingly defunct.”

Google’s search darling status isn’t the only thing that has Microsoft watching Google like a hawk. Google’s deal with Sun last fall to offer desktop productivity software — on demand — was answered by Microsoft’s own recent announcement in November to offer hosted versions of its Office productivity software, as well as Windows features, provided the customer is already using the software.