Search Strategies

The Boston Globe writes:

Microsoft is investing $100 million to enhance search on its MSN consumer Internet service alone, and millions more on multiple search efforts throughout the company. They range from improvements to its custom search offering for businesses, to a more prominent role for search in the next version of the Windows operating system, called Longhorn, to a research project, dubbed Stuff I’ve Seen, aimed at integrating searches for data and files on computers and the Internet.

”There’s no reason to think the ultimate search experience is a little box with a big long list,” said senior researcher Susan T. Dumais, a Maine native who is leading the integrated search effort at Microsoft Research.

Just as they were in the mid-1990s, when they pressed their campaign to overtake Netscape Communications Corp. in the Web browser market, senior Microsoft executives are understated in describing their initiatives, and their strategy, in the search arena.

”If we can get out and provide a better search engine, which we’re in the process of doing . . . it has a lot of upside for our business,” Yusuf Mehdi, corporate vice president in charge of the company’s MSN service on the Internet, told financial analysts.

The emergence of search as a key technology platform for computer users in their homes and offices, driving everything from online shopping to business research, took many at Microsoft and elsewhere in the high-tech industry by surprise. But what really has caught the attention of executives who once regarded search as an afterthought has been the recent explosion of search-enabled online advertising. Microsoft, though still only the number three player in search, saw a 43 percent growth in online advertising in the year ended June 30, enabling its MSN business to record a profit for the first time.

”Search has become the Holy Grail for Microsoft,” said Gene Walton, founder of Walton Holdings, an independent equities research firm in New York. ”No one expected paid search ads to make so much money. It’s a new trend, and it’s a trend that no one thought was going to work. That’s why Microsoft avoided it. Now they want in.”

Key to Microsoft’s strategy is embedding search more conspicuously into Longhorn, the new Windows version expected in 2006 or 2007. While company officials won’t be specific, DeBruyne promised, ”Search will be a pervasive part of the experience. A search box will be part of every window in Windows. It’ll always be available.”

The ability to capitalize on its operating system is seen as a huge competitive advantage for Microsoft in search, just as it was when Microsoft knocked Netscape from its perch in the Web browser market. Microsoft survived a long-running federal antitrust case, which focused on the tie between Windows and the company’s Internet Explorer browser, by agreeing to operate under a court-ordered consent decree. It’s not yet clear what effect, if any, that outcome will have on its efforts in the search arena. But in Silicon Valley and beyond, jaded Microsoft watchers talk of the company preparing to ”pull a Netscape” on Google. writes about Microsoft’s plans to personalise search.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.