Lots of coverage this morning, including our own, about Google’s new desktop search tool. Some readers may be wondering why the news is all over the Internet this morning, but not in their papers. That’s because Google imposed an oddly timed 7 a.m. embargo on the story.

UPDATE: Not discussed in our original Mercury News story is how Google hopes to make money on its desktop search tool. Two ways. Because the tool is integrated into the user’s Google home page, it will generate more search queries. Many of those will be for the desktop only. But many will also be combined Web/desktop searches. More search queries generates more inventory for advertisers and potentially more money for Google. Forrester Research analyst Charlene Li says Google may even consider pairing ads with the desktop search queries.

From a research note she released today:

Paid search receives a shot in the arm. Increased use of desktop search � and thus, Web search � means that Google’s paid search revenues will continue to grow. While it plans to place ads only next to Web search results for now, look for Google to test placements next to desktop search results as well, with placement keyed to query terms, not the content of the files. While some people may object, the benefits of effective desktop search will outweigh the concerns of ads appearing next to personal files. Some will appreciate the added value, while others will ignore it.

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