Microsoft ( MSFT) is backing away from a senior executive's comments earlier this week hyping the company's search engine remake. Neil Holloway, Microsoft's president for Europe, Middle East and Africa, said Wednesday that "in six months' time we'll be more relevant in the U.S. marketplace than Google ( GOOG)." The
remarks , made at a conference sponsored by Reuters, stunned the search industry. "Call me thick, but what the hell is this guy talking about?" wondered blogger and author John Battelle on his battellemedia.com site. "It's a major gauntlet, and a significant timeline declaration (from a company not well known for meeting deadlines)." Holloway's prediction was bold indeed, considering that MSN had just 11% of all search queries in January, according to Nielsen Net/Ratings. That trails Google's 48% and Yahoo!'s ( YHOO) 22%. By Friday, Microsoft was sounding a humbler tone. "When you talk about basic Web relevancy, our customers report that we've made some great progress over the past year, and I know that our research and engineering pipeline is overflowing with intriguing ideas that we will test and release as they're ready," writes Ken Moss, the general manager of Web Search, on the company's internal search blog. "We won't try to predict the progress of our competitors and so we won't forecast when we might take the lead, but this is a long-term game and we are committed to helping drive the next wave of innovation in search for our customers." Perhaps Holloway's original boldness was inspired by Microsoft's failure to break the stranglehold on the search market held by Mountain View, Calif.-based Google. MSN also lags behind Yahoo! and Time Warner's ( TWX) America Online in unique visitors. Last year, Google outflanked Redmond, Wash.-based Microsoft to win a partnership with AOL. Mountain View, Calif.-based Google also agreed to invest $1 billion for a 5% stake in the Time Warner business.
For its part, Google considers Microsoft to be its most formidable rival, Chief Executive Eric Schmidt said during last week's investors meeting. MSN isn't a major contributor to Microsoft's bottom line now, though its importance is expected to grow, says Tony Ursillo, a software analyst with Loomis Sayles, which owns Microsoft shares among its $70 billion in assets under management. "If you are thinking about Microsoft, five years down the road, you really need MSN to step it up and get some mass," he says.