Microsoft Offers Incentives to Businesses to Use Live Search

In an apparent attempt to boost its disappointing Web search market share, Microsoft is giving financial incentives to large enterprise customers whose employees use Microsoft's Live Search engine.

The program is being tested with "a select number of enterprise customers based on the number of Web search queries conducted by their employees via Live Search," Microsoft said in a statement provided via e-mail through the Waggener Edstrom public relations agency Thursday evening.

In exchange for their employees' Live Search usage, Microsoft is in exchange providing "service or training credits" to these enterprise customers, the company said. The program also allows the vendor to gather feedback from these users regarding Web search use in an enterprise, Microsoft said.

When asked what type of usage commitment participating companies must make, a spokesman for Microsoft declined to provide further details about the program.

Analysis

This is a shrewd move by Microsoft to boost Live Search by tapping into its loyal and well established enterprise customers, but the strategy has its risks, said industry analyst Greg Sterling from Sterling Market Intelligence. Specifically, employees could resent being forced or encouraged by higher-ups to use a specific search engine, he said.

"Ultimately you have to compete at the product level. The product has to stand on its own merits. There's a fairly high risk this will not succeed at the grassroots level, because they're using a top-to-bottom approach here," Sterling said. "I'm very skeptical of the long-term prospects for success at the level of the ordinary worker."

While Live Search is a good search engine, this program hints at a mixture of anxiety and frustration on Microsoft's part, in wanting to use its wealth and muscle to improve its Web search position, Sterling said. "It's a bit of the old Microsoft behavior," he said.

News of this program comes soon after Microsoft announced another initiative to promote use of its Live family of online services, including Live Search. On Wednesday, Microsoft said computer maker Lenovo Group will pre-load Windows Live services on its ThinkPad notebooks, ThinkCentre desktops, and Lenovo-branded PCs.

Playing Catch-up

Despite heavy investments and efforts in recent years, Microsoft hasn't been able to come close to rival Google in Web search. Consequently, Microsoft hasn't capitalized as much as expected on the boom in search engine advertising, upon which Google has built its increasing revenue and profit.

In January, Google captured 47.5 percent of search engine queries in the U.S., compared with 10.6 percent for Microsoft. This week, Microsoft acknowledged that its highest-ranking search executive, Christopher Payne, corporate vice president of Windows Live Search, is leaving the company.

Microsoft confirmed the existence of the search incentive program after details leaked out Thursday afternoon. The news was first reported by technology publisher and author John Battelle in his Searchblog Web site, where he discusses Internet search issues.

"As search evolves into more of a productivity tool, and revenue sharing becomes more commonplace across the industry, we are engaging in mutually beneficial partnerships such as this and our recently announced deal with Lenovo to more easily enable customers to choose Live Search," Microsoft's statement said.