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MSN launches revamped search engine
Thursday, July 01, 2004
Microsoft is expected to take its first baby steps on the road
to Web search independence on Thursday, with the launch of a test
version of a homegrown Internet navigation tool and changes to its
current search engine.
The revamped MSN Search remains a front end for technology provided
by Yahoo, offering mainly a facelift aimed to make it look more
like Google. The relatively minor changes signal that--after a year
in development and $100 million investment--Microsoft's ballyhooed
search push still has a long way to go.
The new MSN Search features fewer clearly marked sponsored ads.
In addition, MSN will host a dedicated "light" search
page that the company boasts will out-Google Google in its minimalism.
Microsoft also took a step that could distance it from Yahoo, removing
search links for now from marketers that pay a fee for inclusion
in Yahoo's search index. The changes are expected to improve search
results by 50 percent, Microsoft claims.
More significantly, MSN will introduce a homegrown Web crawler
and algorithmic search engine in test form, giving Webmasters the
chance to vet the system before it is set to launch later this year,
according to the timeline of Microsoft Chairman Bill Gates.
"If this is a next-generation airplane, this is only the inside
of the engine," Yusuf Mehdi, head of MSN Search, said in an
interview Wednesday.
Microsoft is trying to get ahead in a three-horse race with Google
and Yahoo in Web search, but it still has a lot of work to do. No.
1 ranked Google fields 35 percent of all U.S. Internet searches,
according to market researcher Comscore Networks. In contrast, Yahoo
handles 30 percent of the market and MSN handles 15 percent.
In a further handicap, Microsoft effectively leases its search
results from Yahoo and its subsidiary Overture Services, meaning
it hasn't even gotten to the starting gate when it comes to back-end
technology that increasingly stands as a powerful bridge between
consumers and Internet content.
Asked whether Microsoft might consider making acquisitions to catch
up with its rivals, Mehdi said he was "open" to the idea,
although he would not name potential takeover candidates. Previously
in the interview, Mehdi singled out the efforts of Ask Jeeves in
developing natural language queries, something Microsoft has said
it is interested in improving as a keystone of its pending search
products.
Ask Jeeves President Steve Berkowitz suggested he might be open
to deal if it was in the interests of the company's shareholders,
although he did not comment directly on any offers coming from Microsoft.
Even though Microsoft is coming from behind, the company can't
be counted out. Microsoft has made search technology development
a top priority, with plans to unveil its own Web crawler later this
year. Numerous executives, including CEO Steve Ballmer, also have
lamented the missed opportunity that Google has proven in both serving
Web surfers and wooing advertisers, and have promised advancements
that will change the way people search.
In addition, Microsoft is working to enhance search applications
on the desktop, an arena it could well dominate thanks to its PC
operating system monopoly. The company has touted the importance
of Web and desktop search for the past year, highlighting its new
operating system Longhorn, which will integrate Web and desktop
search, but which is still years in the making.
"An important step"
Search experts said Thursday's unveiling is significant because
it marks the first tangible signs of Microsoft's search push.
"In the long term, it's an important step because we can finally
see the technology, touch it, measure it," said Danny Sullivan,
who watches the industry closely and publishes the newsletter Searchenginewatch.com.
Though small, Thursday's move could plant the seeds for a major
transformation in the search landscape. Most notably, search leader
Google will face pressure from a new front as it prepares to launch
a $2.7 billion initial public offering. After all but ignoring search
for several years, Yahoo has begun to aggressively target Google's
territory. Yahoo purchased search providers Inktomi and Overture,
dropped Google as its longtime search partner, and initiated a major
marketing and technical campaign to incite user loyalty. Now a refocused
Microsoft will join in jockeying for consumer allegiance in the
coming months.
Despite its deep reliance on Yahoo, Microsoft is making efforts
to differentiate its service in the minds of Web surfers.
MSN's Medhi said the new search site for now will drop Yahoo's
paid-inclusion program for natural search results, in a move to
answer people's concern about the commerciality of free listings.
But he left open the possibility of using paid inclusion in the
future.
Yahoo's paid-inclusion program allows Web sites to pay for more
frequent updates in the search index. But the service has caused
waves in the industry because some critics believe it can skew search
results. Ask Jeeves recently said it will no longer offer its program,
and Google executives have denounced it. Now Microsoft has joined
the pack.
Jeff Weiner, Yahoo's senior vice president of search and marketplace,
said the company stands by its paid-inclusion program. "We
know empirically that paid inclusion improves the quality of results,
and reduces spam, so we're going to continue to remain focused on
quality."
In regards to the coming competition with Microsoft, Weiner said
he welcomes it because it only drives innovation and ultimately
improves consumer choice. "It forces us to perform at our best,"
he said.
On Wednesday, Yahoo also introduced minor changes to its search
results pages to make it "easier on the eyes," a Yahoo
spokeswoman said. Yahoo softened the coloring of certain text, from
red to light blue, and replaced some top-page tabs with links to
suggested query terms. Yahoo is trying to get closer to the users'
intended search query by listing several options related to a keyword;
for example, "apple computer," for the term apple.
Google declined to comment for the story, citing a mandatory quiet
period before its scheduled IPO.
Targeting Google
In many ways, MSN is using Google's formula to win consumers. It
will feature a search site that displays only a search bar, with
few links and a drop-down menu so Web surfers can target their searches
to news, stocks, encyclopedia information, or movies. On the homepage,
it will urge people to "make MSN Search your home page."
Within search results pages, it will display uncluttered pages
with clearly marked sponsored results. It will also continue to
use Yahoo's sponsored listings from its subsidiary Overture Services,
but it will make a greater effort to display ads it has sold on
top of search results.
The timing of Microsoft's search engine may be aimed at taking
the air out of Google's upcoming IPO. Google is expected to raise
tens of billions of dollars later this year in one of the most widely
anticipated tech IPOs. Observers have speculated the war chest could
help Google fend off Microsoft's advances.
Yet Microsoft has a long row to hoe, given that it only started
building a search engine last year. By contrast, Google has spent
roughly eight years perfecting its search engine. Though Gates has
denied it, several industry sources say Microsoft has held talks
to buy Google and Altavista in recent years, but to no avail. The
software maker finally decided to forge out on its own last year,
launching a Web crawler dubbed MSNBot. But that experiment petered
out and until now it has had nothing further to show publicly.
The company suffered a setback earlier this year when its head
of search advertising development Paul Ryan--wooed from Yahoo--left
the company after only a few months on the job. MSN has yet to name
a replacement.
Nevertheless, analysts said they expect Microsoft--a company known
for its stumbles as well as its persistence--to be a major player
in search eventually.
"Microsoft's going to be a significant presence," said
Steve Weinstein, research analyst at Pacific Crest Securities. "Once
they launch their own product, and put marketing behind it, they'll
be material players. But it doesn't make me pessimistic about the
market for Google and Yahoo, because there's such a huge market
opportunity."
Sales from paid-search advertising are expected to reach $3 billion
this year and $4 billion in 2005, financial analysts said. That's
in contrast to sales of less than $1 billion just three years ago.
Ask Jeeves' Berkowitz downplayed MSN's new service, saying it's
par for the course for any search provider to improve their site
and help users find what their looking for. "I don't think
this is going to reshape anything. Microsoft is doing what everyone
else is doing, which is to update the site and focus on the user
experience."
The bigger event from MSN is its new algorithmic search engine,
which sets the wheels in motion for its ultimate replacement of
Yahoo Search and a more integrated search product of its own.
The company has demonstrated innovations planned for later this
year or early next year that will allow people to search for "stuff
they've seen," on the desktop, in e-mail or on the Web. Also,
it will eventually let people use search in the e-mail program Outlook
to find movie times, for example, and paste that information automatically
into an e-mail message.
Gates foreshadowed those changes and the latest cosmetic MSN Search
update in Sydney, Australia, earlier this week, saying the site
would be dramatically improved. He said later this year, the company
will finally introduce its own algorithmic search engine.
Microsoft is also seeking to make advancements in understanding
Web pages and documents to ultimately deliver more relevant results.
Gates said the future of search includes personalization, understanding
local information, and having the ability to analyze semantics of
a document, browse databases and attach domain knowledge.
"We have a long way to go on our own search engine,"
Mehdi said. "The tough software problems (of search) are in
our house. We're a software company."
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