Will Vista Reignite Microsoft's Internet Search Presence?

In last month’s search market share report I mentioned that a lot of people, present company included, were eagerly awaiting the results of Microsoft’s (MSFT) recent consumer launch of Vista. Specifically, many anticipate Vista to re-ignite its presence in Search.

Microsoft’s move to set Live Search as the default engine within Vista could be the long awaited answer to Microsoft’s struggles in the space.

The Compete numbers are in, and so far things are encouraging for Live Search. MSN/Live’s market share increased a full point in February to 9%. This gain was the first major increase in share for the perennial third place engine in nearly a year. Overall web search volume on Live Search increased 10% to nearly 590 million queries in February.

Oddly enough, I don’t think the folks down in Mountain View got the memo. Google (GOOG) market share continued to climb. The search giant gained a full point with market share tipping the scales at a record 63%. Consumers posted nearly 4 billion web search queries on Google alone; that’s a 15% gain since February 2006. Google’s growth can’t go on forever (trust me it’s a mathematical fact … 100% is 100%) at some point incremental gains will be harder for Google to eek out.

So based on the fact that penetration of Vista is still in its infancy, this may bode well for the future of Search at Microsoft and MSN. In order to maintain this trend Live Search is going to have to start bringing some folks over from the Google side of the fence. The gains mainly appear to be coming at the expense of Yahoo (YHOO) and Ask for now. We’ll also need a couple more months of data to really know what’s going on.

Who said the search race was over? I think most of us did, but the launch of Vista is an interesting variable that gives us something to talk about other than “Google increases market share – again.”

Of note, Compete Search maintained its market share of 0.01% in February; however they are confident that with the recent site redesign and addition of SnapShot previews they can exponentially grow their existing user base :)

Where do Compete's traffic numbers come from?

Comments

[Malkiel:]

I agree with your basic premise, that Live Search will generate traffic for Microsoft, but for different reasons. Live doesn't rely on Vista, it's tied to Internet Explorer 7. Since owners of previous versions of Internet Explorer get 7 as a free download, and since the Live search dialog box is built into the browser, XP owners (including me) who have downloaded IE7 but may never have Vista are already using Live. Since the Vista launch is encountering consumer resistance, the free browser upgrade will matter most for now.

The problem Live faces even in its own privileged position on the browser interface is that %$& Google toolbar. When you choose to make Google your default search engine on its own toolbar, it takes the privilege of making itself the default search engine on the IE7 search box as well, which Microsoft will have to disallow to stay competitive.

Finally, Live will need to become a better search engine to keep up interest. So far its searches are returning for me fewer results than either Google, Dogpile, or Lycos. Google has gamed the browser privilege thing well so far, hence they don't yet need to worry.

2007 Mar 08 12:41 PM

[Tom B:]

We'd love to see MSFT throw billions into dominating search. It's liking paying out a hefty dividend, minus the part about actually benefiting shareholders.

2007 Mar 08 01:01 PM