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Tuesday, February 1, 2005

Microsoft antes up with new search engine
Challenge to Google and Yahoo! is different from browser game

By TODD BISHOP
SEATTLE POST-INTELLIGENCER REPORTER

Microsoft Corp.'s competition with Google moved from the practice field to the big leagues yesterday as the Redmond company released a finished version of its internally developed MSN Search engine.

The homegrown technology, under development for two years, is the centerpiece of an effort by Microsoft to catch up in an area in which the company acknowledges it has fallen dangerously behind. The release will test once again Microsoft's ability to recover effectively from a late start -- something the company has been able to do throughout its history.

But there's no guarantee that Microsoft will come from behind in the search business as it did in graphical operating systems and Web browsers. For one thing, the competition this time around is especially fierce, requiring Microsoft to grapple not only with search king Google, but also with Ask Jeeves, AOL Search, Yahoo! and many smaller competitors.

"It's not a 'Microsoft takes on Netscape' story again," said Danny Sullivan, editor of Search Engine Watch, a news site about the search business.

Comparison chart

Unlike the Netscape-vs.-Microsoft browser wars, there are two major competitors, Yahoo! and Google, with more market share than Microsoft in the search business. Both already give away their products for free, Sullivan noted, and both have more experience running their own search engines than Microsoft does.

The intense competition reflects the increasingly important role of search technology in the software business. Internet-based programs incorporating and relying on search technology are becoming more prevalent and, through advertising, more lucrative.

In one sign of the significance of the business to Microsoft, the company today is unleashing a marketing blitz, complete with national television advertisements, to promote the new MSN Search technology.

But regardless of its technology's competitive fate, Microsoft executives say it was important for the company to create its own search engine, allowing it to control its own destiny in the long run.

"The last two years for us have been about building this foundation, this platform, that we can now move quickly on, and innovate on," said Microsoft executive Christopher Payne, the MSN corporate vice president who oversaw the effort to develop the search engine.

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Microsoft had previously used search technology licensed from a Yahoo! subsidiary. The internally developed MSN Search engine, available since last year on a preview site, yesterday replaced the Yahoo! technology on the MSN Search page and a redesigned MSN.com home page as part of the official release.

But for the time being, at least, Microsoft will continue to use technology from another Yahoo! subsidiary, Overture, for the paid search results that appear alongside the standard results, Payne said.

Microsoft's bid for a bigger share of the search market comes as Google edges into some of Microsoft's turf by offering software beyond search technology. Google already offers a free e-mail program, photo-editing software and a desktop search program for finding files on Windows computers. Other examples include search services for businesses.

"That's part of the reason why Microsoft's hitting them in their core, too," said Matt Rosoff, analyst with Kirkland-based research firm Directions on Microsoft. "It's like, 'If they're going to hit us, then we'll hit them back.' "

Jim Lanzone, senior vice president of search properties for Ask Jeeves Inc., said he understands why Microsoft wants to control its own destiny in the search business.

Ask Jeeves has followed a similar strategy, using its own search engine to try to differentiate itself. Among other things, Ask Jeeves ranks search results based not just on the global popularity of sites but also on linking patterns within individual subjects. For example, if many plumbing-related sites linked to a particular page, that page would have higher results in a plumbing-related search.

This week's MSN Search launch probably won't have much of an immediate impact on the search-engine market, Lanzone said. More important, he said, will be seeing how Microsoft improves its internally developed technology in the long run.

"By owning it, they can really own the roadmap for it going forward," he said.

Microsoft is already trying to differentiate its search engine from some of the existing players in the market. In addition to offering standard search results, for example, the new MSN Search engine uses the MSN Encarta online encyclopedia to provide answers to questions posed in natural language.

That feature is part of Microsoft's broader effort to go beyond providing links, to actually answer the questions people are trying to figure out when they go to search engines, said Microsoft's Payne.

Other examples of differentiating features include the ability to subscribe to results from standing MSN Search queries. The feature works by pulling data streams called RSS feeds into programs called newsreaders. Some of the advanced users of the preliminary version of the MSN Search program requested the feature, and Microsoft was able to add it "in a matter of weeks," Payne said.

"Without your own search engine, you just can't do that," he said. "I think the next year for us is going to be even more exciting than the last year, because it's really going to be about delivering rapid-fire innovation on top of this new platform."

Encarta isn't the only internal Microsoft connection from which MSN Search could benefit. The company also will be able to funnel users to its search technology from its existing programs and sites.

As part of yesterday's launch, for example, Microsoft also streamlined its MSN.com home page and gave the MSN Search box more prominent placement on that page, with a large search box extending across the top.

Microsoft has also incorporated MSN Search technology into its MSN Messenger program.

Along those lines, one major question for the company's competitors is whether Microsoft will incorporate MSN Search technologies into future versions of other programs -- such as its dominant Windows operating system.

Such a practice could leverage Windows to give MSN Search an advantage over competitors. That could raise some of the same antitrust issues as the Netscape battle, in which Microsoft found itself in legal trouble over its bundling of the Internet Explorer browser with the dominant operating system.

But there are signs that the company isn't interested in repeating history. Although the company last year released a preliminary version of an MSN hard-drive search program that puts an MSN Search field on the Windows desktop, it made it available for voluntary download -- in the same way Google's hard-drive search program is available -- not incorporated into the operating system.

"The key for us isn't about distribution," Microsoft's Payne said. "It's about building a better product."

P-I reporter Todd Bishop can be reached at 206-448-8221 or toddbishop@seattlepi.com
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