Analysts: Microsoft plots Web search expansion

Microsoft Corp. is significantly increasing its investment in Internet search, tripling its search team and preparing its own paid listings platform, according to a report from industry analysts.

What the analysts call a "strategic shift" at Microsoft includes an expansion of the search team from less than 70 to about 200 people and is backed strongly by senior management, including Chief Executive Officer (CEO) Steve Ballmer, analysts with U.S. investment bank SoundView Technology Group Corp. said in a report published Wednesday.

The analysts said that, after an extensive investigation with sources inside and outside Microsoft, they can "confirm definitely" that Microsoft is setting its sights on search. Ballmer discussed search strategy last week in a meeting in Redmond, Washington, and the search plans were also highlighted in a company memo, according to the analysts.

The analysts believe that, as part of the new strategy, Microsoft will develop its own paid listings platform. This would be devastating for Overture Services Inc., which now handles paid listings for Microsoft. A third of Overture's revenue in last year's fourth quarter came from Microsoft, according to the SoundView analysts.

"There is a real risk to the sustainability of Overture's platform," according to the analysts, who also expect Yahoo Inc., another main Overture customer, to build its own paid search platform. Together, Microsoft and Yahoo accounted for two-thirds of Overture's revenue in the last three months of 2002, according to SoundView.

Microsoft denied it has plans to enter the paid search market.

"Microsoft and MSN are completely committed to our relationship with Overture. We have no plans to develop our own paid search platform," a spokeswoman for Microsoft's MSN said Friday.

She did, however, say that Microsoft continues to expand its search business.

"We are committed to improving the customer experience with MSN Search and we continue to build and invest in this important business for the long term," she said.

The analyst report came a day after Overture announced it would provide paid for search results on MSN Korea. Overture already has agreements with Microsoft for MSN in the United States, Canada, the United Kingdom, Germany, France and Japan.

Join the newsletter!

Or
Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Joris Evers

IDG News Service
Show Comments

Essentials

Mobile

Victorinox Werks Professional Executive 17 Laptop Case

Learn more >

Exec

Budget

Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?