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3/16/2007
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Microsoft Pays Enterprise Customers To Adopt Windows Live Search

CEO Steve Ballmer outlines the company's new initiative to become an Internet, information, and advertising company.

Microsoft's next big opportunity appears to be paying business customers to use its search products.

At a speech on Thursday at Stanford University's Graduate School of Business, Microsoft CEO Steve Ballmer described Microsoft's effort to build "two new muscles" by becoming a modern consumer electronics company and "an Internet, information, and advertising company."

"Google has obviously done a nice job with their search product, but frankly have had a hard time getting traction in some of the other areas," said Ballmer.

Having had something of a hard time getting traction in the search business itself, Microsoft has turned to paying Windows enterprise customers to use its Live search tools.

The program is called "Microsoft Service Credits for Web Search." Based on screenshots of a PowerPoint presentation about the program posted by entrepreneur and author John Battelle on his blog, Microsoft is offering enterprise customers between $2 and $10 in credit for Microsoft products and services per PC enrolled annually.

In an e-mail statement, Microsoft confirmed the existence of the program. "Currently, we are conducting a trial program through which Microsoft is providing service or training credits to a select number of enterprise customers based on the number of Web search queries conducted by their employees via Live Search," said a Microsoft spokesperson. "These customers, in turn, are providing valuable feedback to Microsoft on the use of Web search in an enterprise environment. As search evolves into more of a productivity tool, and revenue sharing becomes more commonplace across the industry, we are engaging in mutually beneficial partnerships such as this and our recently announced deal with Lenovo to more easily enable customers to choose Live Search."

Earlier this week, Lenovo Group said that it had struck a deal with Microsoft to preconfigure its PCs to use Windows Live. Google has entered into similar deals with PC makers to distribute its search toolbar and other software.

Microsoft's search credit program appears to have three tiers: "low," "moderate," and "high." The latter two reportedly involve the removal of all toolbars -- Google and Yahoo both use toolbars to drive search traffic -- and setting employees' browser home page to Live Search. The program requires Internet Explorer 7, which suggests Microsoft also aims to counter defections to Firefox and other browsers.

Microsoft remains a distant third in the search market, behind Google and Yahoo.

Earlier this month, it was widely reported that Christopher Payne, corporate VP of Windows Live Search, planned to leave Microsoft to pursue entrepreneurial opportunities. Among bloggers, Payne's departure was seen as a sign of Microsoft's dissatisfaction with its search efforts.

Google did not respond to a request for comment.

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