Feb. 11 (Bloomberg) -- Microsoft Corp. hired Yahoo! Inc. executive Larry Heck, bolstering its Internet-search expertise as the software maker tries to catch market leader Google Inc.

Heck headed Yahoo’s efforts to make Internet-search results more relevant, said Mike McCue, general manager for Microsoft’s Tellme unit. A vice president at Yahoo, Heck would be at least the third Yahoo search executive to join Redmond, Washington- based Microsoft since November.

After failing to acquire Yahoo’s search business last year, Microsoft has been raiding the company for talent. Microsoft is investing in search technology to close the gap with Google, which has seven times as much Internet-search traffic, giving it more opportunities to sell online advertising. Microsoft ranks third in the U.S. search market, behind Yahoo.

“If you’re working in search right now and you see Microsoft’s budget and compare that with what’s gone on at Yahoo the last few years, it may make sense to move,” said Matt Rosoff, an analyst at Kirkland, Washington-based Directions on Microsoft. “They want to go where the money is.”

While Microsoft is cutting as many as 5,000 jobs in the next 18 months, the company’s search business is still hiring.

Yahoo spokeswoman Kim Rubey declined to comment.

Better Searches

Heck oversaw a Yahoo lab that developed search and advertising algorithms. That type of work helps increase the chance that users find what they’re looking for. It’s also meant to target ads at more receptive viewers.

At Microsoft, Heck will answer to Satya Nadella, a senior vice president at the online services unit. He will start in a few weeks, the company said.

Microsoft named Yahoo’s Qi Lu as president of its online services group in December and hired Sean Suchter from Yahoo the previous month. Chief Executive Officer Steve Ballmer has said he’s still interested in a search agreement with Yahoo, though he doesn’t want to acquire the entire company.

Lu’s contacts and reputation are helping Microsoft’s recruitment efforts, both among his former Yahoo co-workers and throughout the industry, McCue said.

“He’s exactly what the doctor ordered,” he said.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

Last Updated: February 11, 2009 20:49 EST