Yahoo and Hewlett-Packard have signed a deal to feature Yahoo search and other services on HP personal computers sold in the U.S. and Europe.

HP will feature a co-branded Yahoo/HP internet toolbar on HP computers and make Yahoo the default search service in Microsoft's upcoming Internet Explorer 7 loaded onto HP consumer desktop and notebook PCs, reports Reuters. HP computer users will have immediate access to Yahoo search, email, news and finance links. Financial terms of the deal were not disclosed.

Yahoo and Google are in a race to have their services paired with the products of major hardware and software makers, in anticipation of the new version of rival Microsoft's Internet Explorer browser, which will prominently feature Microsoft services.