Microsoft, Apple Make It A Big Week For The Search MarketMicrosoft, Apple Make It A Big Week For The Search Market

The browser wars may be over, but the battle of the search engines is just heating up.

Microsoft this week launched a test version of a new search engine that could challenge Google Inc. and Yahoo Inc. by letting computer users search their PCs and the Web with a single tool. Microsoft also unveiled a Google-esque MSN search site, eliminating paid advertising from main search results and introducing a simple, fast-loading design.

Meanwhile, Apple Computer early this week demonstrated a search engine, due next year, that will let Mac users quickly comb the contents of their computers for hard-to-find items such as photos and E-mails. Apple says the technology will give it a lead on similar functionality Microsoft plans to include in its next version of Windows, code-named Longhorn. "It's easier to find something from among a billion Web pages with Google than it is to find something on your hard disk," Apple CEO Steve Jobs said at a developers conference in San Francisco this week.

In Internet search, Microsoft trails Google, which is preparing for an initial public stock offering, and No. 2 Yahoo. But the software company is investing heavily to catch up in a market it came to late, just as it did in the market for Web browsers in the '90s. MSN's ad business reached $1 billion for the fiscal year ended June 30 with "minimal" search-technology investment, Microsoft director Lisa Gurry says. In the next five to eight years, "the trajectory for the search business is incredibly high," she says.

The new search engine that Microsoft started publicly testing this week--at techpreview.search.msn.com--employs a new algorithm Microsoft is developing for release within the year that will replace Yahoo technology used on MSN today. Over time, the algorithm could deliver direct answers to users' queries in addition to Web-site links. The software will also likely let users search the Web, E-mail messages, and PC documents, possibly without having a Web browser open. At the same time, Microsoft is developing a new file system for Longhorn, which is due in 2006 at the earliest, that could make searching a variety of sources easier.

Microsoft's MSN work is likely to reach the market before the Longhorn efforts. "Right now, the fast-track work at Microsoft is going on at MSN," says Matt Rosoff, an analyst at IT consulting company Directions on Microsoft. "They'll do some fairly sophisticated things regarding search--and not just of the Internet. The first concrete new search tools we're going to see out of Microsoft are going to come out of MSN, and they're going to come out well before Longhorn."

Yet Apple could build a lead on Microsoft in the race to help users more easily find what they want on their PCs. In an upgrade to its OS X operating system, code-named Tiger and due next year, Apple plans to release technology called Spotlight that can scan a Mac's file system, plus indexes of documents' contents and metadata about their authorship and attributes. At the San Francisco developers conference, Jobs demonstrated Spotlight searches for Office documents, E-mails, address-book entries, Adobe PDF files, and images.

The ability to quickly find images will become more important as use of Macs and PCs to manage photos and videos grows. "Neither Apple nor Microsoft has said that this global hard-drive search is trivial," says Tim Bajarin, president of consulting company Creative Strategies. "But it is clear if Apple delivers Tiger in the first half of '05, they're going to have quite a lead on Longhorn in that area."