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Wednesday, July 09, 2008 8:21 AM/EST

How Microsoft Might Surround and Contain Google

Perhaps the best strategy that Microsoft might avail itself when it comes to competing with Google is not to get people to use the Microsoft search engine more, but rather getting more people to use the Google search engine less.

The strength of the Google Empire comes from the ad revenue that Google generates every time somebody uses their search engine. At this moment in time, the vast majority of the population thinks of using the Google search engine as a natural reflex. But over the course of the last year, we've seen the rise of any number of vertical search engine tools. They include people search services from Spock.com. Human-assisted search services from Mahalo.com. Any number of product and travel search services, including some from Microsoft. And the Powerset contextual search engine service that Microsoft acquired last week. And of course, Microsoft continues to flirt with the idea of acquiring Yahoo's search services.

Microsoft could try to pull all these services together to create a universal search engine that would rival Google. But that would take a lot of time and might not even work. A more judicious approach would be to make it easier for users to access multiple search services as part of a strategy of weaning people off of Google. Early indications are that this is pretty much what Microsoft might be up to with Windows 7. The simple fact is that the Google search engine is not the best tool for all queries. In fact, as a blunt instrument the Google search engine can be as much counterproductive as it is helpful.

If Microsoft can create a user interface experience within Windows 7 that essentially makes it more natural for users to invoke multiple search services that are optimized for different tasks, then suddenly Google is not as dominating as it is today on the Web.

The first signs of this surround and contain approach to competing with Google might come in the form of a wave of alliances with vertical search companies. We have not seen evidence of those alliances yet, but given the strength of Google in the market you could assume that providers of alternative search services are anxious to partner with Microsoft.

In the meantime, Microsoft would do well to make sure that the search technologies it does acquire don't simply fade away under Windows Live Search because right now, the name of the game is not necessarily how to build a better search engine but rather expose an increasing array of alternatives.

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