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Microsoft Enters Search Market
Pilot Version Poses Challenge to Google, Yahoo Engines

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_____Microsoft Corp._____
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By David A. Vise
Washington Post Staff Writer
Thursday, July 1, 2004; Page E04

Microsoft Corp. plans today to make its much-anticipated foray into the high-stakes battle for computer users searching for information online, posing a new challenge to Google Inc. and Yahoo Inc., the two dominant search engine companies.

After investing an estimated $100 million to ramp up its prowess in search, the company is releasing -- in 28 markets and 11 languages -- the first pilot version of its own automated search technology for scanning the Internet. The company said it plans to have a final version to release within a year.

"We are going to deliver the best search service," declared Lisa Gurry, director of Microsoft's MSN division. "It is a momentous day."

Microsoft also is unveiling what it is billing as a faster, fresher and sleeker-looking search site, www.search.msn.com. Analysts cautioned, however, that Microsoft has much to prove to win over computer users, and formidable obstacles to overcome, given the widespread popularity of Google and Yahoo.

"This is a huge announcement for the search engine industry as a whole," said Andy Beal, vice president of WebSourced Inc.'s KeywordRanking.com, a search engine marketing firm. "Microsoft finally getting involved with search is going to send shock waves through the entire industry. Google has already seen the competition Yahoo is putting up. With Microsoft and their billions of dollars entering the arena, Google is going to be fighting attacks from two sides."

The moves by Microsoft come as search remains the Internet's hottest growth area for computer users and online advertisers. In addition to helping people search the Web, Microsoft Chairman Bill Gates has said the software giant is devising a substantially improved method for finding information stored on a personal computer.

"This massive investment kicks off a wave of innovation from MSN that will move search beyond its current, limited offering to delivering the next generation search experience," Yusuf Mehdi, Microsoft's corporate vice president of MSN, said in a statement.

Microsoft has had success in the past in entering some markets aggressively and prevailing, as it did by taking over the market for Internet browsers that had once been dominated by Netscape Communications Corp. But as a recent defendant in major antitrust actions, Microsoft is now operating under greater scrutiny and regulatory restraint in the United States and Europe. And despite its deep coffers, Microsoft's efforts to overtake America Online as a leading Internet access service failed.

Still, the timing of Microsoft's maneuvers poses a challenge to Google, which is striving to maintain its leadership as the dominant search engine in the months leading up to its planned public offering of stock.

Google declined to comment on Microsoft yesterday. The company previously signaled in filings with the Securities and Exchange Commission that it anticipated the software giant would enter the search market aggressively and become a vigorous competitor.

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