Microsoft Corp. yesterday made its most forceful move so far to counter the success of Internet giants Google Inc. and Yahoo Inc., unveiling a Web destination for computer users who want to create a home page of continuously updated information on any topic they choose.
The so-called Live.com pages are intended as a gateway for a host of Internet-based services Microsoft wants to provide consumers, including a retooled Hotmail e-mail system, upgraded instant messaging and ways to link computers to mobile devices.
Individually, none of the technologies is groundbreaking, and Microsoft's rivals offer most of them in varying forms. But Microsoft's move is a sea change for the company, a recognition that its products, like those of Google and Yahoo, must engage users in real time on the Internet and not simply be programs on a personal computer's desktop.
"It's a new way to look at software," Microsoft Chairman Bill Gates said at a demonstration for analysts and media in San Francisco. "The whole space is being transformed."
Gates said the company needs to think of its dominant Windows and Office products in terms of "live" services and is renaming many of its products to incorporate the word, such as Windows Live Mail instead of Hotmail. He likened the initiative to other seminal moments in the company's history, such as the first major introduction of Windows in 1990 and Microsoft's embrace of Internet browsing in 1995.
In the past couple of years, Microsoft watched Google and Yahoo leverage search technology into huge businesses that capture users and generate advertising revenue. More dangerously for the software company, the increasing use of high-speed Internet connections allows Google and others to offer products that bypass the Windows-dominated desktop.
Microsoft's own search engine is the centerpiece of the Windows Live page. Users can build a page with blocks of information from the results of any search term they enter, choosing Web pages, news or subscription feeds.
The page also will accommodate a module for Windows Live Mail and the retooled messenger service. Microsoft also is incorporating security tools such as virus scans of incoming e-mail.
Gates said use of Windows Live would not be dependent on either the Windows operating system or Microsoft's Internet Explorer Web browser, although other browsers are not yet fully supported.
And he said the effort would be funded by paid advertising that will be generated on the page whenever search results are displayed, in the same way they are on other search engines.
Gates and new Chief Technology Officer Raymond Ozzie said Microsoft is pushing a related initiative called AdCenter to spread advertising links and paid search results across many of its Internet-based products and services.
Microsoft Office, the company's suite of word-processing, spreadsheet and other productivity programs, also will receive a "live" component, allowing small businesses to use services such as Web hosting and project management.
Wall Street viewed the announcement favorably, pushing the company's moribund stock price up by 1 percent.
But others were not convinced that the initiative would prove to be a cure for Microsoft's slowing growth.
"In some sense, this is a rebranding of MSN [Microsoft's online portal] and Office," said Mathew Rosoff, an analyst at the consulting firm Directions on Microsoft.
He said the company is viewing AdCenter "as the savior."