Microsoft's Search Strategy Goes Vertical

Last Updated Aug 20, 2007 6:20 PM EDT

Windows Live SearchHow often do you query the Web through MSN or Windows Live? Right, and that's one of Microsoft's biggest problems. Hardly anyone uses its online search services, which means it's losing out big time on advertising opportunities. The Google brand of Internet search is so far ahead and has stood in the No. 1 spot for so long that it seems all but hopeless for Microsoft. But the software monolith isn't stupid -- it knows it has a near-zero chance of gaining on Google with its current search properties, and it's moving quickly to execute a sidestepping strategy. Microsoft plans to poke holes in Google's search dominance by snapping up growing "vertical search" Web sites that serve up specialized information. As of yet there's no leading provider of vertical search services -- a fact that has Microsoft thinking it could plant itself on top. BusinessWeek has an interesting article by Jay Greene about Microsoft's best hope in search:
In May [...] only 8.4% of all searches among U.S. Web surfers went through Microsoft's MSN or Windows Live engines, compared with Google's 56.3% share, according to research firm Nielsen/NetRatings. [...]
Microsoft isn't going to give up the fight any time soon. But the software giant is savvy enough to know that it may need to shift the battle to a different front. In recent months, Microsoft has been spending money to boost its efforts in what's known as vertical search, those niche markets where Netizens go when they're looking for specialized information. Think or for job seekers or Technorati or Feedster for blog info. [...]
And there are plenty of other niches for Microsoft to mine. With its deep pockets, Microsoft could buy the search-engine leaders in such vertical markets as job openings, comparison shopping, classified advertising, travel information, and more. "They are going to nibble around certain areas where they think they can make inroads and establish leadership," says Greg Sterling, founding principal of Sterling Market Intelligence, an Oakland [California] consultancy.
As can be expected, Google is privy to the vertical search world and knows that Microsoft is a threat, so it isn't planning just to stand back watch. But if anyone has experience and pockets deep enough to wage a long search war, it's Microsoft.

(Image of Windows Live Search Logo by Windows Live)