Microsoft Fights Search War With Freebies

Microsoft has eyed the world of search, and the reign of Google, with incredible envy for years. But despite smart people and plenty of money, Microsoft hasn’t come up with the secret sauce that makes people give up Google and Yahoo. Now, according to a new report out from Compete.com, Microsoft is finally making some headway in the Web search wars: Compete’s numbers for June show that Google, which captures 62.7% of web seachers, dropped share for the first time since October 2006. And Microsoft MSN/Windows Live search, with 13.2%, is  closing in on number two, Yahoo, which grabs 19.6%. (In May, Microsoft had just 8.4%.)

What accounts for Microsoft’s successful push? Well, for starters, the shipment of Vista, with Live Search as the default search option, should have given them some bump. But as search engine guru Danny Sullivan (the man who knows more about search technology than anyone I’ve ever met) explains very well on searchengineland.com, the bigger factor at play here is that Microsoft is running a promotion, called Live Search Club, that gives users financial incentive to use Live Search. The club lets them play games to win points that can be used to buy Microsoft products. To play the games, you must utilize Live Search. 

My take on this? First of all, you cannot underestimate people’s appetite for “free” anything. Free is a magical word in advertising and journalism headlines, for good reason.

Second, remember Microsoft is closing in on Yahoo’s share of the search market, not Google’s. Yahoo, which knows a thing or two about advertising and shopping revenues, should be able to cook up a way to fight back – at least I hope so, since as a consumer, I’d like to see Google continue to have a strong number two competitor other than Microsoft.

Also, keep this news in perpsective. As Sullivan notes, Microsoft’s June increase is not a slam dunk. It will be more interesting to see if the Microsoft trend continues over the next few months, and if the other sites that track search engine popularity, including Hitwise, NetRatings and comScore, record the trend as well.

Search is a tough, tough game to win when you are trying to convince people to switch engines. In the time I’ve been reporting on search technology, I’ve never seen a slam dunk reason to use Microsoft search instead of Google. Business users won’t be swayed to change their worktime search habits due to the Live Search Club. But will their grandmothers in Arizona do so? Stay tuned. Microsoft may put the moves on Yahoo with freebies, instead of brain cells.