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Eric Schmidt, Google’s chief executive, yesterday dismissed the notion that the company is competing head-to-head with Microsoft on the internet while launching a deal with IBM in Microsoft’s heartland of the desktop.

According to Microsoft is a new entrant to internet-based services which will take 10-years to come-up to speed. Yahoo! is Google’s main competitor, he said.

Speaking at Gartner’s Symposium and IT/xpo 2005, Schmidt declared: "Twenty years ago, in the PC industry, there was broad competition. It was 10 years before the industry consolidated down - it will probably take the same time in the internet space. Microsoft is a new entrant and it remains to be seen what will play out."

But Google is wasting no time in taking on Microsoft at the desktop level and yesterday unveiled search technology that targets an estimated 100 million Lotus Notes seats that it has developed with IBM.

Google Desktop Search for Enterprise will search Notes in addition to Office, AOL, Internet Explorer, Firefox and other file types. Google’s updated search is – again - free for download and combines searches of desktops, intranets and the internet.

For IBM, the deal continues the development of cross-platform, cross-device alternatives to Windows through its On Demand Workplace strategy.

Google's desktop move comes ahead of an expected ramp-up in Microsoft’s own integrated desktop and internet search capabilities for the next Windows client, Longhorn. Schmidt promised Google would compete against Microsoft on the desktop by going: “Deeper, stronger, faster and more integrated."

He promised Google would continue to innovate against competitors in two areas. One is personalization - that is, knowing more about individuals' personal preferences. Schmidt joked that with six billion people on the plant Google's work is unfinished and that this remains a huge market for both Google and Yahoo!. The second area is the ability to provide comprehensive access to information in that is held in different locations and formats.

Schmidt Google would like to expand the proportion of its business from sources other than online advertising - which accounts for 98 per cent of revenue, according to Gartner - but that this is unlikely to change in the near term. "The model is so broad and deep now, it's unlikely to shift for now." he said.

Google's online advertising business is changing the advertising model for traditional media companies, he said. But he atopped short of saying that Google had plans to use its vast online content and knowledge-based resources to actually become a media company. ®

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