February 18 2007

Microsoft aiming for top of search rankings

Microsoft is investigating ways to capitalise on online markets. CEO Steve Bulmer told analysts in New York that the company doesn't like being number three in "ad-funded online experiences" behind Google and Yahoo.

Internetnews.com reported that Microsoft has had difficulties "competing for consumers online and in developing a business model for online business services". Bullmer said that "we have a very big competitor" in search and e-commerce. But perhaps more significantly for the company's long-term prospects, he said that "we have one significant competitor in the talent market for the first time, which is Google."

If Microsoft is pinning its future hopes on "ad-funded software and online experiences" it has a lot of work to do. Google and Yahoo's share of the search market is growing and driving up the share of referrals from search engines to retail websites.

Google powered 78% of UK internet searches in the four weeks to 21 October 2006, up 9% year-on-year, according to online competitive intelligence service Hitwise. Yahoo took the number 2 spot, based on share of executed UK searches, with 7.7% of the search market. MSN Search accounted for just 6% of searches.

"Consumers are increasingly using search engines to navigate the web, increasing the importance of search engines as a source of referrals for retailers," commented Heather Hopkins, VP of Research for Hitwise UK.

"Google and Yahoo! Search in particular are seeing strong growth in their share of the UK search market and their share of referrals to online retailers. Growth for these search engines seems to be organic, driven in part by toolbar usage but also growing familiarity with the Google and Yahoo! brands."

Emma Herrod