MSN reloaded!

Lisa Baertlein

SAN FRANCISCO: Microsoft Corp. rolled out a revamped version of its MSN Web search service with partner Yahoo Inc. and made an early test version of its homegrown search engine available to Webmasters and search enthusiasts.

Microsoft, whose launches come amid a frenzied battle for Internet search offerings, came late to the Web search race but over the past year has made the emerging market a top priority. It said its new streamlined MSN offering, which strips out some paid advertising, would rival that of Web search leader Google Inc.

Redmond, Washington-based Microsoft said the changes to MSN search represent a $100 million investment including the value of foregone ad revenue, research and development and marketing.

Meanwhile, Microsoft said it is taking its first steps toward a full launch of its own search engine, which would eliminate the need for the world's biggest software company to license that technology from Yahoo.

Microsoft said its new MSN search function would carry more noncommercial search results and limit the number of paid-search results to three per page.

MSN will continue running Web search ads from Yahoo in a column on the right side of the results page, but would drop Yahoo's controversial "paid inclusion" program in which Web operators pay to have their pages included in searches.

The performance enhancements more quickly deliver results that are about 50 percent more relevant than on the old MSN search, making it the best search service for MSN's 350 million global users, Yusuf Mehdi, Microsoft's corporate vice president of MSN, said.

The MSN search page also includes a drop-down menu that allows users to search within specific areas, such as an online dictionary, news or Microsoft's Encarta encyclopedia, and it has links to other Microsoft properties such as Hotmail.

Analysts said the change should help MSN keep its valuable user base from jumping off its site to search.

Further, the move by Microsoft "puts more pressure on Yahoo and takes away a key point of differentiation from Google," said John Battelle, founder and former chief executive of The Industry Standard magazine, who now runs Searchblog and is writing a book on Internet search.

Dropping paid inclusion represents something of a reversal for MSN, which also had been criticized for forcing users to sometimes wade through pages of results before hitting a non-commercial link

Up until this point, Google has worn the white hat, Microsoft has worn the black hat and Yahoo has worn the gray one," said Battelle, who added that he would not be surprised to see Yahoo clarify its paid-search results in the next quarter or two.

HOMEGROWN SEARCH

Mehdi said Microsoft's new search engine was built on a different search methods and currently has a much smaller index than those from Yahoo or Google, but he declined to elaborate on how Microsoft's offering is unique.

"There is a lot of amazing technology under the covers. (Webmasters) are going to see some pretty noticeable differences," Mehdi said.

"They are further along than I expected them to be, but they are still pretty far away from launching -- at least six months," said Forrester Research analyst Charlene Li, who has seen the new search technology.

Microsoft Chairman Bill Gates, also the co-founder and chief software architect, has said he expects the new search engine to ship this year.

Microsoft's idea of search, however, is not limited to just the Web. It also would take in information stored in personal computers, e-mail, deep databases and corporate intranets.

On that front, Microsoft and Apple Computer Inc. each say they will make search a key component of upcoming versions of their operating systems. Google reportedly is working on desktop search technology and International Business Machines Corp. has its own Web and enterprise search offerings.