WSJ.com - Microsoft, Late to Search Party, Seeks to Capture Google's Turf

WSJ.com - Microsoft, Late to Search Party, Seeks to Capture Google's Turf: "MSN knew it would be hard to match the power of Google's search algorithms, which had been refined over years and could return reams of results. So MSN focused on what it thought were its own strengths.
By integrating Encarta and MSN Music, MSN was able to tap into services that it owns and that Google -- being a pure search engine -- doesn't have. Over time, such services can be used to collect data about a customer that Microsoft can use to improve search results for him. Yahoo has said it will follow a similar path.
The approach ran into criticism from specialists Microsoft invited to its offices in October for input on their impressions of the service. Some of the visitors, including academics and Web 'bloggers,' who run their own news and commentary Web sites, complained that Microsoft is blurring the lines between a neutral Web-search service and one that promotes its own products. MSN didn't change its strategy, but one executive says it is now more mindful of how it offers MSN-related content.
The Near Me search feature, meanwhile, taps into what Microsoft sees as its core skill -- basic computer science -- since it involves marking the geographic location of hundreds of thousands of Web pages. By typing in 'dry cleaner near me,' the service would list dry cleaners located close to the searcher. Microsoft argues that services that use phone-directory data as a basis for their location-based searches offer more limited results.
One yet-to-appear feature that Mr. Gates has been pushing for is an Internet search that can include results from subscription Web sites. If a consumer subscribes to an online magazine, for example, a search of the open Web could pull up articles from that magazine.
It's a common refrain from Microsoft that it takes a long-term approach in every new business it enters, from videogames to hand-held-phone software (both of which are unprofitable). MSN was long one of those money-losing businesses. But it finally made its first full-year profit in the year ended June 30, thanks to strong growth in online advertising. 'Overall we view what we're doing here as a marathon and not a sprint,' says Mr. Naam, the MSN group program manager."