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Microsoft Targets Google
Posted on September 19, 2003
REDMOND, Washington (Reuters) --
Microsoft, which is trying to drive growth by investing
in everything from small business software to video
games, has quietly set its sights on a new industry
-- searching the Web.
Chairman Bill Gates, Chief Executive
Steve Ballmer and a handful of other executives sat
down in February to answer a question asked countless
times before in the world's largest software maker's
28-year history. Should Microsoft build or buy?
What they decided was to build technology
that would eventually surpass Google Inc.'s ability
to sift through the Web and return results relevant
enough to make it the top Internet search destination.
"The decision to build or buy
came down to our ability to innovate," said Kirk
Koenigsbauer, strategy manager at Microsoft's MSN Internet
"Our ability to innovate is
predicated on our ability to own the platform,"
he added, a clear sign that Microsoft thinks it can
only beat Google if it owns the technology.
For now, however, Microsoft won't comment on how widely
it plans to use search technology. While it is a company-wide
effort, Koenigsbauer said that any developments will
be led by MSN and used to enhance the portal.
But analysts have interpreted the
decision to build as a sign that Microsoft has greater
ambitions for search, including plans to make it part
of the Windows operating system, the company's main
"Any time Microsoft builds something
into the operating system, they don't want to get that
from anyone else," said analyst Matt Rosoff of
Directions on Microsoft, an independent research group
based in Kirkland, Washington.
Koenigsbauer, who attended the February
meeting, declined to discuss Microsoft's plans for search
beyond MSN. Nor did he disclose the number of people
or amount of money the company will invest in the project.
Can Microsoft pull it off?
Jupiter Research analyst Joe Wilcox, however, said that
with its large concentration of software talent and
nearly $50 billion in cash, Microsoft could out-invest
any competitor for years.
The company is "very, very serious
about search," he said.
At the core of Microsoft's decision
is a belief that search technology is still in its infancy.
"Search engines are doing a
good job but not a perfect job," said Koenigsbauer,
adding most search results today "don't deliver
the results people are looking for."
Part of Longhorn
Search results tailored to individual users based on
a history of their interests and searches is one area
that Microsoft is looking at, Koenigsbauer said.
Analysts said such a service would
be ideal for Microsoft since it could leverage its control
over the Windows operating system, which runs on more
than 95 percent of the world's PCs.
Moreover, they said Microsoft's real
motive is to build search into its various software
products and most likely into the next Windows version,
which is code-named Longhorn.
Gates has promised that Longhorn,
which is expected to launch in 2005 or 2006, will include
database technology to make it easier for users to track
and find information on their computers.
"Long-term, all roads lead to
Longhorn," Wilcox said.
This isn't the first time that Microsoft has put the
search market in its crosshairs.
In 1997, the company looked into
developing search for MSN, but decided to team up with
"We'll continue to partner with
Inktomi in the near-term but at some point we'll go
on our own," Koenigsbauer said.
That also brings into question MSN's
alliance with Overture Services Inc., a leader in search-based
Koenigsbauer said the partnership
is continuing for the "medium-term," and Microsoft
is happy with its relationships with both companies,
which are set to become part of Yahoo Inc., an MSN competitor.
pressure from Google, has been buying search technologies
and marketing its services in television commercials
to attract visitors to its site.