• Illustration: Live Search Results for Product Query

Live Search, Microsoft's Web search site, has received a major update. A larger index and better ranking algorithms should provide more relevant results, while a redesigned interface isolates particular types of related information, such as product reviews and medical information. The improvements could finally help Microsoft increase its search market share, which has stagnated around 10% since the company launched its own search engine nearly two years ago.

Little Progress So Far

After years of outsourcing its search functionality to Inktomi and other companies, Microsoft began working on its own search engine in spring 2003 after it became clear that the company was missing a major opportunity in paid search advertising. (Paid search lets advertisers buy listings next to so-called algorithmic results, which are ordered by relevance.) Google's advertising revenue—mostly from paid search—approximately quadrupled from 2004 through 2006 (reaching US$6.33 billion), showing a much faster growth rate than any of Microsoft's business segments.

To capture some of this growth, Microsoft needed to attract more users and convince them to conduct more searches at its search site, goals it believed required its own search engine. In early 2005 it launched MSN Search (later Windows Live Search, and finally Live Search) and continues to invest heavily in this area—for example, the company has opened two research facilities (Live Labs and the Internet Services Research Center) devoted partly to Web search and made major investments in new datacenters partly to meet the requirements of Live Search.

So far, however, Microsoft's share of search queries has not grown. According to Nielsen/NetRatings, Live Search accounted for about 13% of searches conducted in Aug. 2007—almost exactly the same as its share in Jan. 2005. Over the same period, Yahoo's share of search queries declined slightly, from about 22% to about 19%, while Google's share grew from 47% to 54%.

In Oct. 2007 Microsoft announced the most significant update so far to its search engine, hoping to make Live Search the first choice of people who already use it occasionally: according to Microsoft, more than 70 million people (38% of all searchers) employ Live Search occasionally, but usually as a second or third choice after their Google or Yahoo searches fail.

The autumn 2007 improvements fall into two main categories: better relevance and interface improvements for certain specific searches.

Relevance Improvements

The new version of Live Search uses an index of more than 20 billion Web pages—more than four times the size of the previous index—as well as algorithms that better track the search results that users click on most frequently.

Live Search is also better at recognizing query intent: for example, search engines normally ignore the common word "will," but Live Search understands that "Will Smith" is the name of a celebrity and no longer ignores the word "will" in this context.

Microsoft says that Live Search results are now as relevant as Google's results and more relevant than Yahoo's results, according to internal user testing.

Vertical Searches

Microsoft recognizes that equaling Google's relevance won't be enough—it is also experimenting with interfaces that offer more information than Google's.

For certain type of queries, the Live Search interface now compiles additional information from around the Web and displays it in a box at the top of search results. These improvements cover the four categories that Microsoft says make up 40% of all Live Search queries: entertainment, shopping, medical, and mapping.

For example, if users search on a product name or category (e.g., digital camera), the box may show detailed information such as photos, pricing from e-commerce sites, and an aggregate rating compiled from user reviews. (For an illustration, see "Live Search Results for Product Query").

Searching for a medical condition will return a series of links to specific types of information, such as drugs used to treat the condition (Microsoft acquired this technology when it bought MedStory in Feb. 2007), while searching for a celebrity's name will display images, playable video clips, and a ranking of the celebrity's popularity ("Celebrity xRank") based on the number of queries users are conducting for that celebrity.

Microsoft will also improve the interface for its local search and mapping site, Live Search Local. For example, the company is eliminating a second search box that confused users (one box was for business names, the other for addresses) and will automatically suggest alternative routes to avoid bad traffic conditions.

Availability and Resources

The improved version of Live Search is being rolled out gradually—at this time only selected queries will use the new relevance engine and interface. However, the transition will be complete by the end of 2007.

Live Search is at search.live.com.

The MedStory acquisition was covered in "Health Search Engine Purchased" on page 30 of the Apr. 2007 Update.