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Vista Makes Run at Google

Microsoft's new search capabilities could grab it some market share.

The release of


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highly anticipated Vista operating system has been met with murmurs that a big push by the Redmond, Wash., software giant isn't quite what it used to be.

But it should garner some attention at


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That's because Microsoft plans to build in Web search capabilities with Vista and its immensely popular suite of Office software over the next six months, according to Andreas Ramos, director of search engine marketing at Position 2, a search advertising consulting firm.

Microsoft will tie in contextual Web search across its host of popular applications such as Word, Excel and PowerPoint in a way similar to how Google's email system currently displays ads, Ramos says. The move will allow Vista users to launch Web searches at the click of a button and from their desktops, rather than having to maneuver to an Internet browser.

If the development pans out, it has the potential to cut a larger-than-expected slice out of Google's market-share domination.

Microsoft, of course, will be nowhere near dethroning Google. But history has shown that being brought into Microsoft's fold can give even technically inferior products a big boost. And at a time when investors have come to merely nod at still-excellent showings by Google in the search space, news of slippage to Microsoft can go a long way in tripping up a stock that's already down nearly 7% in February.

According to research firm HitWise, 63% of Web searches were run on Google during January, compared with 21% for



and only about 10% for Microsoft's MSN division.

Many other search experts arrive at an even higher number for Google by using a different method, which checks where specific Web traffic came from. Ramos estimates that about 89% of search traffic to Web sites is routed through Google.

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But with such big numbers, it's more difficult for Google to chalk up each additional point of market share. Microsoft, meanwhile, faces an easier climb.

Moreover, Microsoft's ability to tie Web searching to the desktop operating systems and applications it has a stranglehold on can have a powerful effect. In order to gain market share, Microsoft doesn't have to deliver search results that are appreciably better than Google's. It simply has to make sure its results aren't markedly worse to win over new converts because of the convenience.

Such a strategy has served Microsoft well in the past. During the 1990s, the company was able to suffocate the threat from Netscape's Navigator browser by bundling its own Internet Explorer product with its Windows operating system. Many saw Netscape as technically superior, but it didn't matter.

Microsoft's Explorer continues to dominate even now, though new browsers with superior capability and more reliability such as Firefox are available for free, thanks to the open-source software movement. Microsoft's Internet Explorer had 86% market share as of January, compared with about 12 % for Firefox, according to the research firm OneStat.

Much was made in the quality-of-search debate about the announcement earlier this week by the high-profile search start-up


that it had licensed "natural language" search technology from


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. But while Powerset, which hopes to let users search through queries that use normal words instead of particular key terms, hopes to outdo Google through better searches, it's really Microsoft that Google should worry about.

Several commentators have suggested that because so many Web surfers are accustomed to launching their searches through Google, this is almost as much of an asset to the company as its search technology. But even more users may be familiar with the Microsoft desktop environment than with the Google search box.

Google, for its part, seems to be anticipating the threat.

The company has been beefing up its suite of online tools, which are similar to Microsoft's Word, Excel and PowerPoint, but which the search giant is giving away for free. Finding a way to decrease the popularity of Microsoft's staple franchise would be one way to blunt a potential attack.


investors expect big things from Google, not the least of which is continued dominance over the one business that makes up nearly all of its revenue. And while Google is eager to tap adjacent, new markets, those efforts remain decidedly mixed. The company keeps increasing the amount of money it makes per search; this led to

fourth-quarter results that again surpassed Wall Street expectations.

But it's important that Google show investors it has a solid plan in place to make money in some other endeavors. Otherwise, it will begin to look like a one-trick pony that's trapped in a cage with the 800-pound gorilla of the tech world.