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The deal is Microsoft's latest attempt to chip away at the dominance of search leader Google, by luring customers of the the world's largest personal computer maker to use its search engine.

Under the agreement, Microsoft's search engine will also be the default on Internet Explorer, which is preloaded with HP machines.

Microsoft did not disclose the terms of the agreement, which will begin in January in the US and Canada.

"This

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is the most significant distribution deal for Live Search that Microsoft has ever done," claims Kevin Johnson, president of Microsoft's platform and services division.

Google has a similar agreement with number-two PC maker Dell, which expires in 2009.

Dell says the company has not decided if it will continue with Google after the current deal expires, but that it was "open to alternative" partnerships.

Quite what effect Microsoft's deal with HP will have on Google's search share is difficult to predict, with its US market share currently around 61.5%, and Microsoft's just 9.1%.

Microsoft has begun to step up its efforts to catch Google with a number of initiatives. Last month, it announced a new "cashback" rewards program to encourage people to use its search engine to shop for items.

In February, it made an offer to buy Yahoo that was rejected by the company's board. Microsoft shelved its offer over disagreement on price, but restarted talks with Yahoo last month to buy its search service.