September 8, 1998 6:30 PM PDT

MSN tests search engine

Microsoft has launched a beta version of its highly anticipated search engine, almost a year after the software giant said it was developing the product with technology firm Inktomi.

The engine, called MSN Internet Search, will be featured at its own Web address and will be incorporated into portal MSN.com's search rotation. Currently, the search rotation includes engines and directories from portal competitors Yahoo, Excite, AOL Netfind, Infoseek, and Lycos.

While any expansion by Microsoft is never good news to its portal competitors, the addition of a search engine most likely will not send many fleeing for shelter. A larger question, analysts say, is whether Microsoft will license its search and directory service to other Net access providers.

"If Microsoft pursues a Snap-like business model whether they're pitching their front end to access players, that would be threatening to many people out there," said Mark Mooradian, an analyst at Jupiter Communications. He was referring to Web portal Snap's business model to license its navigation site to ISPs.

"They can offer deals that no one is able to offer," he added. (Snap is a joint venture between NBC and CNET: The Computer Network, publisher of News.com.)

Microsoft would not provide a definitive time frame for the extent of the beta-test period but said it would be determined by customer response.

Nor would Microsoft say whether it plans to maintain its network of search partners on its site. Currently, the rival search engines pay MSN.com fees to be featured on the site. This licensing arrangement--which browser and portal rival Netscape Communications also does on its Netcenter site--allows the firms, which enjoy high traffic, to charge search engines hefty fees for placement.

However, in the near future, Microsoft will increase the MSN Internet Search engine rotation percentage, said MSN.com product manager Nichole Hardy. Hinting that Microsoft's existing relationships with other search providers are likely to change depending upon how popular MSN Internet Search becomes, Hardy noted that "as [Microsoft] continues through the beta period and when search is final, that may be the time when we shift things around a bit."

Hardy added that the search engine eventually will feature an editorially driven directory that will include an option for full Web searches by Inktomi. This model closely mirrors Yahoo's current style.

The newest addition of a search engine underscores the efforts that Microsoft has taken to launch a portal offering to compete with industry leaders. Already, Microsoft has consolidated all its Web properties under one MSN brand name, revamped the appearance of its portal page, made the navigation of its content more channel-oriented, and announced plans to launch an instant messenger client in the near future.

Still, the inclusion of a search engine, though essential to a portal, may not be as crucial to portals as it was a year ago. Since Microsoft's announcement last year that it intended to launch an Inktomi-powered search engine code-named "Yukon," the search directory landscape has changed significantly. Directories such as Yahoo and Excite have steadily seen search engine usage diminish, but at the same time have built up other content and technology features.

In a sense, search engines have become a commodity, said Patrick Keane, another analyst at Jupiter. "Search as a core is important, but that core is definitely decreasing," he said.

In addition, more Web properties aside from Web portals wanting to build out search functions are overwhelmingly choosing to license technology from providers such as Inktomi, instead of undergoing the laborious and expensive task of building it themselves. "I think it was prudent for [Microsoft] to license someone else and put their brand on that," Keane noted.

Besides the search engine, MSN.com has also adopted a spate of typical portal offerings such as stock quotes, news links, weather, sports scores, and local guides. The site also has integrated other Microsoft Web properties such as its Expedia travel site and the car shopping guide CarPoint into the portal service.

Although relatively late in the Internet portal game, Microsoft has not been counted out of the competition. Analysts have said in the past that Microsoft's deep pockets and its ability to leverage its existing Internet Explorer users into an MSN.com audience has given the company a distinct de facto boost to become one of the leaders in the space.

 

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