Microsoft Pays Businesses

In an effort to sway more corporate customers toward their new search products, Microsoft is offering to pay businesses who make the switch. At a speech at Stanford University, Microsoft's Steve Balmer said Microsoft's effort was similar to building "two new muscles" by being both an electronics company and an "Internet, information and advertising company."

Ballmer compared Microsoft's Live Search to Google, saying that the Internet search king had "obviously done a nice job with their search product, but frankly have had a hard time getting traction in some of the other areas."

His comments were fairly ironic, as Microsoft is now offering Windows Enterprise customers between $2 and $10 (as a credit toward Microsoft products and services), for each computer who enrolls per year.

Microsoft confirmed the new program via a Microsoft spokesperson. "Currently, we are conducting a trial program through which Microsoft is providing service or training credits to a select number of enterprise customers based on the number of Web search queries conducted by their employees via Live Search. These customers, in turn, are providing valuable feedback to Microsoft on the use of Web search in an enterprise environment. 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."

Industry analyst Greg Sterling said the move is a good one by Microsoft, as it will tap into a large well of current users, but cautioned it does have its risks. "Ultimately you have to compete at the product level," he said. "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. I'm very skeptical of the long-term prospects for success at the level of the ordinary worker."

Over the past years, Microsoft has invested a great deal of money, first on its MSN search and now Live Search. In spite of this, Microsoft lags well behind both Google and Yahoo search engines. In January, Google was used by Internet researchers roughly 47.5 percent of the time. Yahoo was in second with 28 percent of the market, while Microsoft managed to capture only 10.6 percent.

Sources:

http://www.informationweek.com/showArticle.jhtml
http://www.informationweek.com/windows/showArticle.jhtml
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/16/AR2007031600799.html