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Does anyone remember the hissy-fit Google threw at the beginning of this month over the default settings of Microsoft’s new web browser IE7?

To recap, Google gave Microsoft a week of headaches, going as far as complaining to the US Department of Justice over the fact that IE7 defaults to MSN search unless another search engine had been set as the user-preference before installation.

At the time, Google spokesperson Marissa Mayer was quoted by the New York Times saying, “The market favors open choice for search, and companies should compete for users based on the quality of their search services. We don’t think it’s right for Microsoft to just set the default to MSN. We believe users should choose.”

Flash ahead twenty one days to this week’s big Google news. Google has signed a deal with Dell, buying its way into the default settings of millions of new Dell computers. The agreement will have Dell installing the Google Toolbar on new PCs, along with the development of a co-branded homepage, effectively putting Google in the same position they heavily criticized Microsoft for less than one month ago.

While financial terms of the deal were not released to the public, Google CEO Eric Schmidt, speaking at Goldman Sachs investors’ conference in Las Vegas, said the companies will be sharing revenues generated through search advertising fees.

CNET News quotes Schmidt saying, “The real reason we do this is for users,” Schmidt said. People “turn the Dell machine on, and everything is integrated right there. (This deal) is a turnkey solution for search.”

Meanwhile, over at Microsoft, folks were rumoured to be giggling into their coffee mugs this morning, no doubt pleased that their long weekend begins with a grin at Google’s expense. In an unrelated (but wonderfully timed) interview with the San Francisco Chronical, Microsoft CEO Steve Ballmer weighs in with his thoughts on Google’s famous corporate motto, “Don’t be evil”. This part of the exchange between Ballmer and SF Chronical reporters Ken Howe and Dan Frost tells its own story.

“Q: This is an old question, but it always comes up: What do you think of the “Don’t be evil” mantra as a corporate culture?

A: Who are we talking about?

Q: Google.

A: Do they follow it? (Laughs.)

Q: What do you think of that?

A: I don’t have any comment. I’ll ask you. I mean, it’s one thing to have a mantra and it’s another thing to follow it. Dude, you’ve got to ask yourself that question.

Q: Are you saying that they don’t?

A: I didn’t say anything. No comment about it. It is important for all companies to — we have a mission. We believe in empowering people and businesses around the world to realize their full potential. We have a set of core values that we believe in. I think many companies do have a mission. Many companies do have values. Many companies do have a mantra.

The key is not whether you have one. The key is: What does it mean in practice? Do you drive it? Do you follow it? We do. That’s important. But even when we do, there are people who say well, if you do, shouldn’t X or Y or Z not happen? I mean, the truth of the matter is, getting a very high market share in a business is not inconsistent with our values or our mission, but sometimes when you get a good position in the market, people need to look at you in a different way.

We have good positions in some markets, and some can argue other guys, including some of the guys that you’re talking about, have good positions in other markets. I don’t study other companies’ mantras.”

Mr. Ballmer might not spend a lot of time studying other companies’ corporate mantras but if he did, he might not be surprised to hear Google is being advised to change theirs. The current one, “Don’t be evil” is getting harder and harder to say without a devious smile. The suggested change, “Live long and prosper in big glass houses but don’t throw stones.”