Microsoft launches new search engine to challenge Google

To Google has passed into modern usage as a verb that means to look something up on the internet. Bill Gates, the Microsoft founder, was hoping yesterday that we will soon be talking about MSN Searching instead.

To google has passed into modern usage as a verb that means to look something up on the internet. Bill Gates, the Microsoft founder, was hoping yesterday that we will soon be talking about MSN Searching instead.

While its name might not trip off the tongue, Mr Gates launched his new search engine with a huge fanfare, replacing the existing Yahoo! service which comes as standard with Microsoft's msn.co.uk and unveiling a redesigned home page.

But it has a lot of catching up to do. In Britain, Google commands 60 per cent of all online inquiries, while just over 10 per cent goes throughthe Microsoft search engine.

Microsoft has been remarkably successful at clawing back its position after falling behind rivals in other aspects of emerging technology, such as web browsers and graphical operating systems. It is crucial that it also does so with its search engine ­ which the company believes will allow it to "control its own destiny" ­ but it faces strong competition not just from Google, but Yahoo! and Ask Jeeves.

MSN Search was launched simultaneously in 24 countries and 10 languages, backed by a major advertising campaign. Its secret weapon is the ability to access Microsoft's Encarta encyclopaedia, with its 1.4 million entries. This allows users to ask direct questions such as, what is the world's largest lake?

Mr Gates, who is said to be worth £26.7bn, was meeting European commissioners in Brussels yesterday in a bid to resolve an anti-trust ruling against him which resulted in a ¤500m (£350m) fine last year.

The EU competition commissioner, Mario Monti, ruled that Microsoft was abusing the monopoly position it enjoyed with its Windows operating system, found in 90 per cent of personal computers worldwide.

It was ordered to strip down the Microsoft products it offered as standard with Windows, removing Media Player from the bundle. Microsoft is in talks with officials on how such a stripped down Windows should be sold to the public.

The new Microsoft search engine has been under trial in recent months. The company believes it can loosen the Google stranglehold by slimming down the number of websites it offers for each inquiry and by fashioning it more closely to meet each user's needs.

Matt Whittingham, head of information services at MSN, said: "I think consumers, maybe two years ago, were wowed by the fact that you could enter a relatively obscure search term and you would get hundreds of thousands of results. In fact, there is perhaps too much information out there and what consumers want is results that are tailored to them. They want search engines to be a bit smarter, to know where they are geographically and to alter searches depending on the time of day and if they are at work or at home."

Microsoft believes its search engine will also be more up to date, refreshing its list of around five billion websites every two days compared with every two weeks in other cases.

Google, whose creators Sergei Brin and Larry Page became billionaires when the company they founded was floated on the stock market last year, makes its money through sponsored links ­ adverts which appear on screen when an inquiry is made.

Mr Gates has a long way to go to catch his competitor. Google's internet-leading search engine fuelled a sevenfold increase in fourth-quarter profits to soar past analyst expectations. The Mountain View-based company said it earned $204.1m (£108m), or 71 cents per share, during the final three months of 2004. That compared to net income of $27.3m, or 10 cents per share, at the same time in 2003.

Revenue for the period totaled $1.03bn, more than doubling from $512.2m in the prior year. After subtracting commissions paid to other sites for advertising , Google's fourth-quarter revenue worked out to $653.5m If it was not for a $60m charge to cover stock compensation paid to its employees, Google would have earned 92 cents per share, unadjusted from income taxes.

That figure exceeded the estimate of 77 cents per share among analysts surveyed by Thomson First Call. It marked the second consecutive quarter Google has blown past analysts' earnings estimates since the company's initial public offering of stock six months ago.

THE TEST

* What is the population of Peru?
MSN Search had an instant answer: 28,863,494. Google provided 2,600,00 possible sites. Top of the list was an outdated 26m.

* What is the deepest ocean?
MSN is instant: the Pacific Ocean, maximum 10,924m. Google's first offer misses the mark while its second reports the same answer.

* How rich is Bill Gates?
MSN has nothing. Google shows a real-time Bill Gates personal wealth clock. It calculates how much each US citizen has contributed to it ($203.03).

Conclusion:
2-1 to MSN, but don't ask about Bill Gates.

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