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Microsoft Corp today announced that HP would embed its Live Search technology on all consumer PCs sold by the Palo Alto, Calif.-based computer company in the United States and Canada, starting January 2009. Live Search is also going to be the default search engine in all browsers on HP’s web site. Funnily, the big announcement merited only a tiny press release.

So, why is this a big deal? Because it shows that Microsoft is using its time-tested strategy of leveraging its desktop monopoly and big money to win in a market where it has been a late starter.

“This agreement with HP is a strategic indicator of our increased focus on securing broad-scale distribution for Live Search,” said Kevin Johnson, president of the Platforms & Services Division at Microsoft. “This is the most significant distribution deal for Live Search that Microsoft has ever done.” Of course, the terms of the deal -– a euphemism for “HP got a lot of money” -– were not disclosed.

Apart from the fact that Google’s search is really good and really fast, one of the main reasons it commands such a whopping share of the search market -– 67 percent in the United States –- is because it has firmed up distribution deals to embed its search service in everything from the Firefox browser to Dell computers to the Cox.net homepage.

The distribution game used to be Microsoft’s strategy; using its desktop monopoly and mega-cash, it asphyxiated Netscape and became king of the browser market. Thanks to the U.S. Department of Justice, however, the company had to pull back from its monopolistic moves. Even though Microsoft’s Bill Gates and Steve Ballmer told attendees of D6 conference that guys like them tend to avoid monopolies and compete, it is hard to imagine a leopard changing its spots. The desktop search deal with HP is a good example.