Microsoft Takes on Google With New Search Engine

Google could be facing its biggest threat yet after Microsoft yesterday made its long anticipated move into the internet search engine market.

The Microsoft search engine flickered into life in the early hours of the morning amid uncharacteristically little noise. Microsoft is "soft" launching the service in beta, or test mode, allowing the firm to continue to fine-tune the system with feedback from users.

It is available in the US and 26 other countries at beta.search.msn.com and is expected to be fully operational in the early part of next year. Microsoft has eyed the extraordinary success of Google enviously.

The software firm's MSN internet portal has until now been relying on Inktomi, a division of Yahoo, to power its search services. The new service developed in-house will have far deeper capabilities.

Advertising alongside search listings has become the fastest growing revenue spinner on the internet. In its maiden results as a public company, Google said it had generated revenues of $2.2bn in the first nine months of the year.

Microsoft said its service culls results from 5bn web documents. It also promises to provide answers to direct questions, such as "what is the second-longest coastline in the world?" A "search near me" function enables users to sift through local relevant information. Like Google it will offer news and image searches.

Google has a long head start and for many internet users has become the default setting for internet searches. It has 36.1% of the online search market. Yahoo is currently ranked No 2 with 30.6%. Microsoft's existing service is third with 14.4%. Microsoft though has a track record of coming late to a market and then muscling its way into a dominant position.

More recently the software firm has found the going tougher in its attempt to crack some markets, like cable set-top boxes, mobile phone software and video games. Still, Microsoft has deep pockets and has shown dogged patience.

In an attempt to stay ahead of Microsoft, Google earlier this week announced that it had improved its own technology so that more than 8bn pages were now searchable, up from 4bn. Google also recently announced a service allowing users to search books.

Intel yesterday named Paul Otellini as its next chief executive, following the planned retirement of Craig Barrett in May next year. Mr Otellini is a 30-year Intel veteran who made his name overseeing the launch of the Pentium processor in 1993.