NEW YORK (CNNMoney.com) - Google is in talks with Dell that could result in the search engine paying the computer maker up to $1 billion to have its software factory-installed on new Dell PCs, according to a report Tuesday.

The deal is in its early stages but represents a growing trend in the computer industry where computer companies sell space to software makers, the Wall Street Journal reported.

The paper said users often don't switch from the pre-loaded programs after they boot up a new computer, making this a lucrative market.

Microsoft (down $0.14 to $27.03, Research) is seen as having the most to lose from this new arrangement, according to the Journal.

The company, which for years has exerted great control of what appears on desktops due to the dominance of its Windows operating system, makes most of its money from PC software, the report said.

Google's (down $17.45 to $367.65, Research) toolbar, which sits atop web browsers and allows users to search the Internet, and its software to search a computer's hard drive are among the items that could appear on new Dell (up $0.23 to $29.55, Research) machines, the paper said.

_______________________

Google gets chatty with its gmail. Click here