The next release of Microsoft Internet Explorer continues to worry Google, despite the company having no plans to develop a competing browser, Google CEO Eric Schmidt said on Wednesday.

Microsoft is currently beta testing IE7, which contains a search box with a drop-down menu which by default uses the company's search engine. Google executives have complained about this, and Schmidt reiterated their concern on Wednesday.

"We want to make sure that the use of the power of Windows is done in a correct and legally appropriate way," Schmidt said in a question-and-answer session with financial analysts and investors.

Google complained to the US Department of Justice (DOJ) and the European Commission about this. However, the DOJ this month dismissed these concerns as groundless.

Google critics say the company's grievance is inconsistent with the fact that Mozilla's Firefox browser has a similar search box which defaults to the Google search engine.

Schmidt also said Google has no intention of developing its own browser because it doesn't see a user need for it, since there are many good options available in the market.

"We would make the decision based on what end users want," and not to make a defensive move against competitors, he said. "You have a number of fine browsers. People have good choices."

Google's search engine is the most widely used, but others are investing heavily to compete in a race to grab a slice of the online advertising market, which grew 30 per cent last year and is expected to continue to expand.

Asked to name Google's most successful product introduction recently, senior vice president of product management Jonathan Rosenberg described the company's 2004 acquisition of Keyhole and its subsequent integration of that satellite-image mapping technology into Google's local search service. The Keyhole technology boosted Google Local's usage and has made it into a service that people and advertisers find attractive, he said.

Rosenberg also acknowledged that the most disappointing effort in recent times has been Google's attempt to resell ads to print publications. Although that initiative hasn't taken off as expected, Google isn't giving up on it. "That's still in its nascent stages and it will require that we work with the producers of magazines to come up with formats that actually work for the kind of advertisements that we're placing," Rosenberg said.

Meanwhile, Schmidt said Google's management is "ecstatic" over the multiyear deal, announced last week, to include several Google software products with Dell PCs. The companies tested the bundling for six months and found the customers' response to be overwhelmingly positive, yielding a 'win-win' situation. It's very likely that the companies will expand the scope of the agreement, he said.