After more than a year of quiet work, Microsoft is expected to launch a test version of its first Internet search engine later this week.
Today, the competitive landscape couldn't be more changed. After more than a year of quiet work, Microsoft is expected to launch a test version of its first Internet search engine later this week. It follows on the heels of Yahoo, which uncorked its own search technology in February. Suddenly, Google, which has seen its market valuation soar to $45 billion, is embroiled in a three-horse race to dominate the market for searching the Web.
Despite the deep pockets and hefty reputations of Microsoft and Yahoo, Google will be tough to catch. With its Spartan Web interface and fast-loading pages, it has locked in a loyal base of users. Even as Yahoo launched its own search product early this year, backed by a big branding push, Google steadily gained market share.
The search kingpin handled 49% of U.S. Internet searches in October, up from 41% in March, according to the Internet analytics firm WebSideStory.
Microsoft could find the going even tougher. At the moment, it licenses search technology from competitor Yahoo and handles 14% of U.S. searches, according to WebSideStory. That puts it a distant third behind Google and Yahoo, which owns 24% of the market. Some analysts, such as Morgan Stanley's Mary Meeker, have downplayed Microsoft's threat to Google and Yahoo, saying the Redmond (Wash.) software giant would have to be significantly better to steal away entrenched users.
But Microsoft's supercharged desktop search is probably over a year away, according to analysts. Until it can draw on its strongest assets, Redmond's fledgling search effort could be in for a bumpy ride.