Search: The Hottest Race In TechnologySearch: The Hottest Race In Technology

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

Microsoft last week launched a test version of a new search engine that could challenge Google and Yahoo 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 last 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 in similar functionality that 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.

In Internet search, Microsoft trails Google Inc., which is preparing for an initial public stock offering, and No. 2 Yahoo Inc. 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, says Microsoft director Lisa Gurry. In the next five to eight years, "the trajectory for the search business is incredibly high," she says.

Microsoft's experimental search engine--at techpre view.search.msn.com--employs an algorithm the company is developing for release within the year that will replace Yahoo technology now used on MSN. Over time, the algorithm could deliver direct answers to users' queries along with Web-site links. The software also will 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 couldmake 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."

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 of its OS X operating system, code-named Tiger and due next year, Apple plans technology called Spotlight that scans a Mac's file system, plus indexes of documents' contents and metadata about their authorship and attributes. At last week's conference, Jobs demonstrated Spotlight searches for Office documents, E-mails, Adobe PDFs, and images.

The ability to find images quickly 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's clear if Apple delivers Tiger in the first half of '05, they're going to have quite a lead on Longhorn in that area."