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MSN plans new
search engine
By Reed Stevenson (original in
www.forbes.com)
 Microsoft
Corp. said on Friday that a new engine for its MSN Search service will
start up in July, another step in its plan to challenge Google Inc.'s pole
position as the Web's top search destination.
As part of that upcoming shift, MSN -- the Internet
arm of the world's largest software maker -- said it will change the way
that it displays text advertisements that are listed alongside search
results.
Paid listings, or advertisements that piggyback
onto search results, have become a hugely profitable component of the search
industry, estimated to be worth $2 billion in 2004.
Instead of including paid listings within search
results, which critics say results in misleading search results, MSN said it
will display paid listings separately at the top and to the right of search
results generated by its search engine.
"We're really close to finding out what really
strikes consumers as the most relevant search results," said Karen Redetzki,
an MSN product manager.
Redetzki said MSN will list three paid listings at
the top of every search result, of which at least two will be advertisements
sold directly by MSN.
Currently, Microsoft's paid listings are sold
through an intermediary called Overture Services, which became a subsidiary
of Internet media and portal company Yahoo Inc. last year.
Yahoo also declared its intent to become a search
industry heavyweight last year, taking on Google and MSN.
MSN said that it would continue to work with
Overture to bring in paid listings, although it has clearly shifted away
from relying on such providers.
In January, Microsoft ended its relationship with
another paid listing company, LookSmart, and last September said its
relationship with Overture would eventually change, but remain intact for
the medium-term.
"We will continue to partner with Overture, and are
happy with that partnership," Redetzki said.
MSN, which reached profitability on an operating
basis two quarters ago, has aggressively expanded its measures to bring in
more advertising revenue, including selling its own paid listings and
offering free videos on its Web site.
Just over a year ago, Microsoft's executives sat
down at its Redmond, Washington, headquarters and decided to build their own
search technology that would challenge Google's ability to sift through the
Web and return results relevant enough to make it the Web's top search
provider.
Redetzki said MSN was making steady progress and
that July's launch will reflect results driven by a revamped search engine
with better algorithms, the underlying logic involved in sifting through
information.
"We're much farther along in relevancy," Redetzki
said.
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