Microsoft to open European search center

NEW YORK, USA: Microsoft said on Thursday it planned to open a search technology center (STC) in Europe as part of its plan to accelerate investments in Live Search.

The location of the STC has not yet been determined, the company said, with several cities being considered.

The STC will be opened in Microsoft's 2009 fiscal year, starting July 1 this year.

Microsoft has sought to increase its presence in online search in a bid to gain ground on market leader Google Inc and Yahoo Inc to create an online advertising powerhouse.

That effort to gain market share in Web search led to its unsuccessful offer to buy Yahoo for $47.5 billion (24.3 billion pounds) earlier this year. Yahoo said on Thursday that talks with Microsoft over a smaller deal for its Web search business failed to produce a deal.

Last month, Microsoft launched a "cashback" search service that pays users a rebate for buying products they found using the company's Windows Live search engine.