Improved Relevance, Interface for Live Search

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.