Microsoft Gets Social

Redmond has big plans for tools and partnerships that will let users consult a circle of friends when conducting Web searches

Software giant Microsoft is taking its MSN Search division on a comeback tour. The next stop: Social search, a way of making Web search more relevant by incorporating the preferences of like-minded Net surfers.

Microsoft (MSFT) plans to unveil a question-and-answer social-search tool in the coming months, says Justin Osmer, senior product manager for MSN. The feature will let users direct questions to a specific universe, such as a group of friends, rather than to get automated lists of results from a generic search engine.

It's one of the many ways that Web companies, including Yahoo (YHOO) and Google (GOOG), are trying to set themselves apart with social search, a targeted pursuit of information that's influenced by the preferences of a person's peer group. Social search is a method whose time has come, Osmer says. Microsoft research shows that generic search engines can't answer 50% of queries asked, he says. The new tool, whose name he didn't disclose, will be "one of the larger projects for us" this year, Osmer says.


  Microsoft is hoping new tools will reverse MSN's market share slide. Its share of the U.S. market for Web searches slipped to 11% in January, from 12.8% a year earlier, according to Nielsen/NetRatings. In the same period, Google and Yahoo gained share.

The emphasis on social search is part of a broader revamp. Microsoft has restructured MSN and introduced a host of new features, including MSN Search and Win, which lets users win prizes, and Windows Live Search Beta, which includes ways to customize searches(see BW Online, 03/08/06, "Microsoft: Searching Your Favorite Sites,").

The foray into social search may not end with the new tool, either. Microsoft is in talks to buy or forge a partnership with two-year-old startup, specializing in social-network search, BusinessWeek Online has learned from people familiar with the matter. A Microsoft spokesman declined to comment.

Launched by two serial entrepreneurs who'd previously dabbled in search and social networking, Eurekster essentially combines generic search, though a partnership with Yahoo, with information culled from social-networking sites, such as Thanks to Eurekster's technology, a Friendster user searching for "skin care" would get results that reflect reviews and preferences of a predefined group, be it friends, neighbors, or another affinity group -- say pregnant women.


  Such filtering isn't easy to do. Eurekster has two existing and six pending patents covering everything from how a search engine can learn from user behavior to how it can utilize collaboration among users to drive search results. "If our technology were in the hands of one of [the search engines or a huge media company], it would be a competitive advantage," says Eurekster CEO Steven Marder. He would only allow that the outfit is negotiating potential partnerships with a number of portals and media companies.

Indeed, the next round of the Web-search wars is likely to center on the ability to networking features. Since Google came out with its Web page ranking system, "we really haven't had another breakthrough [in search technology] for some time now," says Bradley Horowitz, vice-president of advanced products at Yahoo, "until social search."

Social search could also carry more revenue-generating potential than basic search. Yahoo's research shows that people typically use social-network search to find e-commerce opportunities. "These are transactional queries," says Horowitz. "These searches are monetizable." That means advertisers may pay more to have their ads associated with searches that have a social component.


  The search giants also need to rev up their social-search efforts not to be left out of the search game altogether. Today, social networks pose the greatest threat to established sites like Google, Yahoo, and MSN, says Bill Tanser, general manager for global research at Hitwise. Sites like MySpace are drawing an increasing share of Web traffic. These outfits are actively working to improve their internal site-searching capabilities.

Yahoo has led the social-search charge. The company will soon release Yahoo Answers, which lets users ask questions of fellow searchers. It's been out in a "beta" test form since December and is exceeding the company's expectations. Yahoo is also testing Yahoo My Web Beta, allowing users to search among friends' links (see BW Online, 01/23/06, "Yahoo's Social Circle").

Search heavyweight Google has been looking at social search as well. Most notably, it has been tinkering with Google Base Beta, a place where users can post their own content and search for other users' files.


  Microsoft has many assets that could help it leapfrog rivals in the social-network search game. MSN has more than 205 million Instant Messenger users and more than 230 million active users of its Hotmail e-mail service. While Google has amassed a trove of information on users' search preferences, it doesn't have nearly the volume of data on users' social circles.

Still, so far, "Microsoft hasn't found a good way to mine user data," says Rob Helm, director of research at consultancy Directions on Microsoft. And social-network capabilities like those mastered by Eurekster could help change that.

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