Gates: Microsoft fights back from underdog status on search

Unveils Cashback

After vague statements over the last weeks about internal investments that will allow it to compete in search without Yahoo, Microsoft on Wednesday laid out more of its vision for improving on its current "underdog" position in search.

While describing some new search technologies from Microsoft and some future ideas, executives were also cautious to repeat that theirs is a long-term vision that may take a while to spell success for the company. They spoke during an annual get together for advertisers, this year hosted on Microsoft's campus in Redmond, Washington.

"I have to say, it's kind of fun to be the underdog," Microsoft Chairman Bill Gates confessed. The company has put an unusual effort toward building the team that's working on search, he said. "We've done more on this to build a great team then on any effort I can remember," he said.

Users should expect to see new features every six months from Microsoft's search group, he said. "We have a long-term commitment," Gates said. The company is willing to experiment, he said.

Wednesday's launch of Cashback represents the latest new feature. When Web users search for a product on Live.com, results may feature a Cashback tag. If users end up buying a product with the tag, they'll receive money back.

Microsoft expects that the concept will create a whole new business model, though it also expects that it might take some time for it to shake up the industry. "We understand this is a journey. When you change the user experience or business model, it takes time to percolate through to behavior changes," said Satya Nadella, senior vice president of the search, portal and advertising platform group at Microsoft.

Gates pointed out how Cashback is different than existing search advertising methods. "In search, when you get those ads, in a sense you don't get anything back in return," he said. That compares to other media like TV or radio, where in exchange for advertisements, viewers and listeners get content.

Cashback "gives you a reason why you should use a particular search," he said.

Over 700 merchants including eBay, Barnes and Noble, Sears, Circuit City, Home Depot, Zappos.com, Overstock.com and Kmart have signed up to advertise as part of the Cashback program. "That confirms there is this opportunity for change," Gates said.

Microsoft also showed off search features in beta release based on the company's recent acquisition of Farecast. When Internet users search on Live.com for flights, results will include information collected by Farecast that predict when a traveler can get the best deal on a flight. Microsoft has also used that technology to now offer similar information to people looking for hotel deals.

In addition, Microsoft showed off innovations it has made in video search as well. When users search for videos on Live.com, they see a page of videos and, on the right hand column, options for refining the search. They'll also see a list of other related videos that might interest them. In addition, users can hover over the video with their mouse and the video starts to play. Gates showed off the results for a video search for Tiger Woods in Live.com and compared it to a Google video result for the same topic.

"Make no mistake, we're about having the best search, the best results, so people want to use it for quality alone but also some of these innovations in the business model will excite and drive that," Gates said.

Still, he cautioned that the software required to drive the innovations that Microsoft envisions could take many years and billions of dollars to develop, he said.

While the effort to show off new search capabilities at Microsoft seemed to correlate with the company's recent decision to pull its acquisition offer for Yahoo, none of the executives referred to the ongoing discussions with its search rival. Neither Gates nor Nadella took questions from the conference attendees.

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Nancy Gohring

IDG News Service

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