Microsoft Corp. is releasing an overhauled Internet search engine, under a new name, still looking for traction in a market where rivals Google and Yahoo! have continued to pull ahead.
The Redmond company today plans to issue a preliminary version of Windows Live Search, with a new look and additional features that Microsoft says should make it easier to find information on the Web. The company's share of the Web search market has slipped since introducing its internally developed MSN Search engine last year.
"I'm hoping this does turn it around, without a doubt," said Christopher Payne, Microsoft corporate vice president for MSN Search, in an interview Tuesday. "We believe that it's still very early in search, and that there's still significant room for differentiation. Prior to this, I don't think we've really gotten enough differentiation in order to win people back."
In a related move, Microsoft said it acquired Onfolio Inc., a Cambridge, Mass.-based company, which offers a tool that lets people clip and save text and links from the Web. Microsoft plans to include the technology in a new version of its search toolbar, dubbed Windows Live Toolbar, also due to be released in test form today.
Windows Live Search, though still in test form, signals the future direction of the company's efforts in the market. It's slated to eventually replace the MSN Search service that debuted last year, when Microsoft set out on its own in a bid to make up ground in the search business.
The company says the new features will include a "slider bar" for increasing the number of results on a given page, and a "smart scroll" function for viewing results by continuously scrolling down a page, rather than clicking from one page of results to the next.
In addition, the company says Windows Live Search will include a feature for previewing search results. It will also offer new ways to specify the scope of searches, including a feature called "search macros" for quickly making a query across specific sites or categories of sites.
The improvements by themselves don't appear to be enough to turn the tide against Yahoo! and Google, said Matt Rosoff, analyst at Kirkland-based research firm Directions on Microsoft.
"Some of it's interesting, some of it's neat," Rosoff said. "But I really think that it's going to take a pretty big marketing push ... just to get people to try MSN Search. Then if they've got all the interface in place, if they've got the relevance in place, they might start to see their market share increase."
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The company doesn't have immediate plans for an advertising blitz, but "certainly we'll support it with a broader marketing campaign over time," said Lisa Gurry, director of Windows Live product management. The goal is to release a finished version of Windows Live Search by the middle of the year, Gurry said.
The preliminary version of Windows Live Search will be available through www.live. com, the customizable home page that's part of the company's Windows Live initiative.
Financial terms of the Onfolio deal weren't disclosed. Onfolio's seven employees are expected to join the Redmond company, Microsoft's Payne said.
Microsoft has been rebranding many of its former MSN services with the Windows Live name, although the company says it plans to keep the MSN name for the MSN.com Internet portal. In switching to Windows Live Search for the search engine, it will be leaving behind much of the brand recognition it built with a huge advertising campaign for MSN Search.
It appears that "Microsoft has made a decision that while MSN has great brand recognition, Windows has better," said Jupiter Research analyst Joe Wilcox. However, he added, "Any time you make a branding change, you take risk."
The latest statistics from Nielsen NetRatings show MSN Search slipping to an 11 percent share of Web searches in January, down about 2 percentage points compared with the same month last year. Google and Yahoo! rose to 48 percent and 22 percent, respectively.
A recent Forrester Research survey showed that a smaller percentage of online consumers were using MSN Search as their most frequent search engine, compared with the year before, said Charlene Li, a principal analyst with the research firm.
She said the new Windows Live Search service is "definitely a step in the right direction."
Before introducing its own search engine last year, Microsoft licensed the technology for MSN Search from a Yahoo! subsidiary. Payne noted that the company was six years behind when it started the search project, and he expressed satisfaction with the work done so far, saying he considers MSN Search now "very competitive."
He added, "With this set of features, I think you're starting to see us, hopefully, break out and do some things that people are going to find compelling."
P-I reporter Todd Bishop can be reached at 206-448-8221 or toddbishop@seattlepi.com.
