| Biggy2 |
11-09-2004 11:51 PM |
Microsoft to Launch Challenge to Google, Yahoo (tomorrow)
As reported in the Wall Street Journal:
"Microsoft Corp. tomorrow will start its long-awaited Internet search service, adding fresh competition to Google Inc.
After 18 months of development, the Redmond, Wash., software maker will open a preview version of the search service, according to people familiar with the plan. The company is trying to grab a bigger piece of the lucrative business, now led by Google, of combining Internet search and advertising.
A Microsoft spokeswoman declined to comment on the service. Microsoft, which has been testing its search technology since June, had promised a public version by year end. The company is also working on technology for searching for data on personal computers.
At the company's annual meeting yesterday, Microsoft Chief Executive Steve Ballmer vowed to beat its search competitors. "We will catch up, and we will surpass," he said.
Microsoft's service, built by its MSN online group, thrusts the company into a growing battle over how people find information and buy things over the Internet. Google leads the market, but No. 2 Yahoo Inc. over the past year has revamped its service through over $2 billion of acquisitions of search-related companies.
The new search service means Microsoft can stop paying Yahoo for use of its search engine. Yahoo is pushing ahead with new targeted-search services and plans features that rely on information about its users to produce customized search results. "We do value MSN as a partner," said a Yahoo spokeswoman, adding that her company has "planned accordingly" for Microsoft's announcement. She said Yahoo's contract to provide search-related ads to MSN was unaffected by tomorrow's search preview.
Google, meanwhile, is broadening the areas it searches to include data on PCs, and analysts speculate it could roll out instant messaging and other services that Microsoft considers its turf. Microsoft by year end is expected to have a PC search tool. A Google spokesman declined to comment.
MSN executives have said the company is trying to build a service that better tailors results to searchers' queries than current services do.
Internet-search companies are scrambling to increase relevance of results to users. Google and others have launched "local" sites that help consumers find goods and services in their neighborhoods. The latest push uses software that searches e-mails and files on PC hard drives. Google last month released a test version of its technology for searching PCs.
Microsoft brings a big wallet and a track record of coming from behind in areas that it deems critical. The company belatedly recognized the importance of the Internet and ultimately steamrolled Netscape Communications in Web browser software. Scott Kessler, an analyst at Standard & Poor's in New York, says Microsoft's move into search is significant, but that the company is "well behind Google and Yahoo in terms of consumer perceptions about search. It's going to be an uphill battle for them."
MSN began letting customers try out its search engine in June. That technology could search one billion Web pages, or about one quarter of what Google said it could search then. Microsoft received mixed reviews for the test version and has been refining it since.
Separately, Microsoft yesterday said it plans to broaden a legal indemnification program for its software customers, the latest salvo in the company's battle against Linux and related programs. Microsoft has been offering to pay legal costs for many corporate customers if they are sued for violating patents, copyrights or other intellectual-property rights. That indemnification, which had covered Microsoft customers on volume licensing contracts, is being extended to all users, said Martin A. Taylor, Microsoft general manager of platform strategy.
The company says its legal protection is greater than that offered by Linux sellers such as Red Hat Inc. and Novell Inc. Officials of both companies said they offer adequate protection to their customers.
Also yesterday, Microsoft shareholders approved changes to its compensation plans to allow the payment of a special dividend of $3 a share, part of a plan announced in July to use some of Microsoft's $64.4 billion in cash for a combination of dividends and share buybacks."
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