Microsoft's New Search Czar Outlines Strategy

Microsoft has long lagged behind Google in Web search, struggling to gain market share with its Live Search product and advertising dollars with its adCenter pay-per-click ad network, and lost two top executives earlier this year. Now, Microsoft senior VP Satya Nadella, a fresh face at the helm of Live Search and adCenter, has grand designs for Microsoft's place in the search pantheon.

"No one's yet gotten to a point where they're locked into any one search engine," Nadella says. "When it comes to the core algorithmic relevance, we have matured to a point where we can compete with the Googles of the world. We need to get to the point where the ability to get that word out broadly gives us the shot. Now our challenge is to make sure people are more engaged with us."

There are early hints of success, as Internet metrics firm Compete found Live Search gaining search share at the expense of Yahoo and Google in June. A recent promotion called Live Search Club that rewards users with ringtones, t-shirts and copies of Windows Vista may have helped bolster Live Search, but one month does not a watershed make. According to the Compete numbers, Microsoft still trails Google and Yahoo, with less than a fifth of Google's share. However, according to Microsoft numbers, 60% of Internet searchers use multiple search engines, and 30% of searchers in the United States use Live Search from time to time. That's enough to prove to Nadella there's an open opportunity.

Microsoft entered the search game late and only started developing its own search engine a couple of years ago, and now the company's owning up. "Yes, we were not there in the beginning of this Web search story," Nadella says. "It's fair, we missed it, but we are getting back into the game in a major way."

One of the ways Microsoft may get back into the game is by moving beyond traditional Web search to better opportunities with less entrenched competition. For an example: mobile search, in which Microsoft has been investing heavily.

Last Friday, the company introduced Windows Live Mobile Search 2.0, available for Windows Mobile and J2ME phones and soon BlackBerrys. The downloadable version has includes movie showtimes, local data including reviews, support for storing maps on the device, GPS support and turn-by-turn directions that can prompt users to re-route if they get lost. The mobile Web version supports image search and local directory listings.

Microsoft is quickly gobbling up start-ups, acquiring TellMe, which has a popular voice-activated mobile search service, European mobile advertising company ScreenTonic and mobile search technology provider MotionBridge, all earlier this year. "We think mobile search is going to be a big growth market for us," Nadella says. "It gives us an opportunity to start on a level platform. If you look at the reviews, we often come in first."

Mobile search is but one leaf of a strategy book that includes a focus on "sub-classifying search into various verticals," as Nadella puts it, including mobile, local, entertainment, health, multimedia and commerce, among others. "Instead of all search being just about one destination site and one set of results, we definitely believe in much broader based on vertical so we can make search much more contextual," Nadella says. For example, Microsoft recently integrated specialized medical search acquired from Medstory earlier this year into its MSN Health and Fitness portal and has instituted features in Live Search similar to Google's OneBoxes that will do things like bring up real-time road conditions upon a query for something like "Seattle traffic." "Who said an edit box and 10 blue links is what search is?" comments Nadella.

Video search stands to be another place Microsoft thinks it can gain, even in the face of Google's recent $1.65 billion acquisition of YouTube. Nadella says the opportunity is there because until now, video search has mostly dealt with searching through tags of metadata about videos. Though he doesn't say, he could be tipping his hand to technology that analyzes and searches the audio stream of a video. "Video is going to be big. There's a lot of work we're going to put into our video search on our roadmap," Nadella says, adding that announcements are coming this fall.

Microsoft is interested in crawling the deep Web in areas currently un-indexed by search engines because of complex file formats and a lack of links. There's work to be done in natural language processing to make Microsoft better at processing long queries. And the possibility of embedding Web search into future versions of SharePoint so that business users have easy access to Microsoft search technology. Other goals include figuring out how to use tag clouds on a large scale, opening up Microsoft's search API in new ways and automatically personalizing " though retaining options for user control " the search experience so that results differ some for each individual or to auto-populate tabs and feeds like in iGoogle.

There's innovation to be had, and market share to be gained. "The idea of search being mature is not the case," Nadella says. Still, with the Google juggernaut in the way, and Microsoft's rocky history in search, any climb will likely be long and arduous.