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Google announced the development of a desktop based search tool that sounds an awful lot like the plans for Microsoft’s new operating system Longhorn. Due to be released in early-mid 2006, the Longhorn operating system is said to fully integrate search with the O/S, making any file your computer has ever accessed a searchable document. These files would include items from your hard drive, corporate Intranet and the common Internet. The idea behind the move was to a) create a better operating system that allows users to find information from a far greater range of documents, and b) to take large amounts of market share away from other (non-MS) search tools. Google is trying to counter this threat by introducing its own desktop based system that will have similar features to those found in Longhorn. According to today’s technology section of the New York Times which broke this story, the new software is being code named “Puffin”. (subscription to NYTimes required) As Google made this announcement this morning, there has (thus far) been no response from Microsoft.

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Tuesday, November 25th, 2003

Thoughts on Longhorn

Today’s Globe and Mail (Canada’s National newspaper) has an amazing disection of Microsoft’s emerging OS, Longhorn. This article should be required reading for any SEO or anyone interested in SEO. Read more…

Last week it was reported that Microsoft and Google had met to discuss a possible buy-out. This week, Microsoft Chairman Bill Gates stated that the discussions never happened. Four weeks ago, it was reported that Google was going to issue an IPO in February 2004 through a “Dutch Auction” format. The next day, Google Communication Director David Krane, was all over the phones demanding retractions of the story. Obviously someone is telling stories somewhere along the line… Read more…

MSN dealt a predictable, yet massive blow to the Australian search directory LookSmart yesterday with the announcement that MSN search will not renew an agreement to display results from the LookSmart directory. The current agreement which ends in mid January 2004, is LookSmart’s largest revenue stream, accounting for over 65% of the already beleaguered company’s $140Million annual income. LookSmart, which recently announced a move towards the paid-contextual advertising market, will almost certainly be fatally damaged by this move with LookSmart shares down 52 percent at $1.44 by the close of trading yesterday. Investors fled the company so quickly that trading on LookSmart’s stocks was closed shortly after the announcement.

Our analysis: MSN has dropped LookSmart for three main reasons:

1) First of all, LookSmart was entering the paid, contextual advertising sector, a market MSN wishes to dominate in the coming years. The last thing MSN needs is another rival to contend with on top of Yahoo and Google. By dropping LookSmart at this time, MSN is effectively consolidating its competition by eliminating the smallest.

2) Secondly, MSN doesn’t need to draw results LookSmart as it can now compile its own results from a mixture of Inktomi listings and sites spidered by the new MSNBot.

3) Thirdly, Microsoft needs to dominate the multi-billion dollar search market as its traditional markets are either flattening or shrinking as Linux romances the desktop market and Apple’s Unix driven Mac OS X continues it’s drive into the micro-product market. Microsoft’s signature product, Windows has proven to be a constant security risk as viruses and worms continue to penetrate and MS continues to issue patches, leading many IT decision makers towards UNIX and Linux based systems.

Microsoft is clearly aiming to take paid-advertising market share away from current industry leader Google and second runner Yahoo (Overture) however the imminent demise of LookSmart might actually come back to haunt MSN in a few months as LookSmart may have just become a more attractive take-over target for Google or Yahoo. LookSmart’s technology is sound and its newly announced paid-placement business model could generate revenues if LookSmart has learned to treat its customers with greater respect than they have in the past. While Yahoo has already been on a purchasing spree this year with the acquisition of AltaVista, AlltheWeb and Inktomi, Google has yet to take over another major search player, instead targeting smaller companies who’s technology could improve their current product.

Whatever happens to LookSmart in the coming months, MSN’s move has definitely moved the goalposts on the search engine playing field and escalated the business war between the big-three.

One of the oldest search tools on the web has recently introduced a sleazy marketing campaign targeting other search engine’s clients. Lycos, owned by Madrid based TerraLycos, is using GATOR advertising to display advertisments for their free email system when users (who’ve either downloaded or been infected with GATOR software) go to competitor’s sites. Read more…

A great deal of information is leaking out of Redmond Washington this week as Microsoft’s spin-masters start the process of promoting the new search tool that will be incorporated in the new version of the Windows operating system currently code named, “Longhorn”. The new OS will blur the division between a computer’s hard-drive and the general Internet. The goal is to create the ultimate search tool, though with the number of features and tools being spoken of this week, it looks much like a Swiss-Army knife compared to the butter knife MSN currently provides. Read more…

What will Microsoft do to increase its presence in the search engine industry? For a long time MSN has barely been a going concern in the search engine industry, but now with Google whispering about a ’04 IPO and Yahoo! buying Overture and Inktomi, there doesn’t seem to be many options left for the software giant. Here is some insight from MSN product manager Lisa Gurry:

“Lisa Gurry says the company plans to move aggressively to develop its in-house search expertise while continuing to rely on Yahoo as a supplier. ‘We will make the right investments to stay competitive in this space,’ says Gurry.” (USA Today)

Does “make the right investments” highlight a potential buyout of a known search service? This target has long been debated but the field of potential targets have narrowed considerably if we rule out a major buy of Google or Yahoo! by Microsoft.

“For the record, Gurry says Microsoft is not considering buying Yahoo or Google ‘at this time.’”

Who does that leave? Our money is on an acquisition of Teoma/AskJeeves. Teoma is really the only search engine that I can think of which has demonstrated the potential to innovate and maintain the clean search image that Google so quickly rose from. I suppose, however, that this prediction is a no-brainer since there is really very few to pick from.

Till our next news.
- Ross Dunn

Google Adwords Certified Partner Member of SEO Consultants Directory EMarketing Association