Forrester has a commentary on Microsoft’s recently launched search engine:
The technology: It’s just good enough. In initial testing, MSN’s new search engine delivers search results that are as good as other engines. With 5 billion documents, the index is in range of its competitors. The engine also has a few innovations in the interface that give users more control–such as its Search Builder feature, which narrows search results by freshness and popularity. These are interesting features, but ones that will be quickly copied by other players. The impact: It keeps MSN users loyal. While Microsoft generates significant traffic from its MSN.com portal and Hotmail users, only 40 percent of online consumers who use MSN at least weekly also use it most frequently to search the Internet. The company’s primary goal will be to persuade non-MSN searchers to come back into the fold. Once the new algorithm comes out of beta and is integrated into the site, look for extensive marketing and promotions to encourage people to give it a try. The potential: MSN can now innovate in crucial search areas. Competition in the search field will be a battle for the loyalty of each site’s core users–and all of the search engines will use desktop search, local search and personalized search to tie in users. Having its own search algorithm will allow MSN to finally innovate in these areas that will define the future of search.
The fight illuminates a new reality of the high-tech industry: Searching is the front door to much of computing, and whoever stands at the door controls vast influence and riches. In earlier eras, computer users had other primary entry points: the PC’s operating system and then the Web browser. Microsoft built its fortune by seizing dominance in both of those markets. Now it wants to expand that beachhead to searching.
Google is coming into battle from the other direction: It could extend its influence over searching into other basic computer functions and thereby threaten Microsoft’s grip on PC software. Google, in addition to introducing the hard-drive search feature, has begun offering an e-mail service on a test basis that challenges MSN’s Hotmail. A Google spokesman declined to comment on its strategy for competing with Microsoft.
There’s a third key combatant: Yahoo, currently No. 2 in search and owner of a broad portfolio of Internet services from free e-mail to fantasy football games. At first taken by surprise at Google’s rise, Yahoo has staged a comeback over the past two years, spending more than $2 billion to buy search-engine companies. One of its big customers has been Microsoft, which has paid to use Yahoo’s search technology on its MSN site. Microsoft and Yahoo also split the revenue from advertising linked to the results of MSN searches.
MSN knew it would be hard to match the power of Google’s search algorithms, which had been refined over years and could return reams of results. So MSN focused on what it thought were its own strengths.
By integrating Encarta and MSN Music, MSN was able to tap into services that it owns and that Google — being a pure search engine — doesn’t have. Over time, such services can be used to collect data about a customer that Microsoft can use to improve search results for him. Yahoo has said it will follow a similar path.
The Near Me search feature, meanwhile, taps into what Microsoft sees as its core skill — basic computer science — since it involves marking the geographic location of hundreds of thousands of Web pages. By typing in “dry cleaner near me,” the service would list dry cleaners located close to the searcher. Microsoft argues that services that use phone-directory data as a basis for their location-based searches offer more limited results.
One yet-to-appear feature that Mr. Gates has been pushing for is an Internet search that can include results from subscription Web sites. If a consumer subscribes to an online magazine, for example, a search of the open Web could pull up articles from that magazine.
Walter Mossberg’s comment: “Google is still my search service of choice, but Microsoft has arrived in search and will be a more and more attractive alternative.”