I have initialized a number of Win7 machines in the last few days. In every case, when I was finished and tried to change the search provider to Google, I could not.
I just had another to initialize another. On initial startup, IE8 was installed. I changed the search provider to Google without a problem. Then after IE11 was installed, KB3038314 failed as described a few hundred times in this posting.
I suspect the reason it has failed in this particular case relates to the fact that Google was already set as search provider.
I have "hidden" this update, along with the highly objectionable KB3035583 one.