Search Engine Enlightenment

Specter of Microsoft expansion looms over web search space

Overture's stock took another hit today as Wall Street caught wind of MSN Search's plan to triple its staff and increase the pace of research and product development. This news was widely known internally; Traffick caught wind of it last week from a source close to MSN.

Investors are betting that Microsoft's initiative might foreshadow an end to their partnership with Overture to serve sponsored search results. Even if this isn't the case, this certainly reduces Overture's negotiating power over future revenue shares.

Other possible implications of an expanded presence for MSN Search:

• Reduced likelihood that MSN will renew with Inktomi after the current contract is up;
  
• A possible shift in MSN's relationship with LookSmart;
  
• On the other hand, MSN could easily acquire LookSmart for their technology, customer list, and editorial staff;
  
• For a change, a fairly serious competitive threat to Google;
  
• This may be a strong indicator of Microsoft's resolve to defeat AOL in the mainstream consumer ISP market;
  
• As with any Microsoft initiative, concerns will no doubt be raised in future about privacy issues, anticompetitive practices, etc.
  

Posted by Andrew Goodman
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