Microsoft revamps Windows Live search

By Daisuke Wakabayashi

SEATTLE (Reuters) - Seeking to narrow the gap with Google, Microsoft unveiled a retooled Web search service that aims to deliver more relevant results and combines text, video and other information onto a single page.

Microsoft, the world's largest software maker, said Windows Live search is now on an even technology footing with offerings from rival search engines after years of playing catch-up since it started developing its own Web search in 2003.

Its new presentation is in line with an industry trend to step beyond traditional text links, with unified search results that offer Web sites, news, pictures and video on one page.

Rivals Google and Ask.com made similar changes this year, and Yahoo is moving in that direction.

"Microsoft is realistic. It doesn't think it's going to wake up tomorrow and overtake Google," said Allen Weiner, an analyst at research firm Gartner. "Right now, Microsoft wants to establish itself more firmly with its existing users."

Microsoft ceded a head start to Google in Web search and then watched it create a multibillion-dollar business on the back of selling advertisements tied to search results.

Google is now one of its main rivals, using its Web ad money to invest in threats to Microsoft's core desktop software business by offering Web-delivered software as a "service".

Last quarter, Google earned net income of $925 million (459 million pounds), almost entirely from ads. That lagged Microsoft's $3 billion overall profit, but Microsoft online services business posted a loss and the unit's revenue grew at a third of Google's pace.