Digital Marketing and Technological Insight

Microsoft, in its never ending quest to catch-up to Google, is releasing an update to its search product Live.com with the focus on improving the technology behind the search results. From what I have seen and heard this update is a giving users of Live Search a much better searching experience. But, will Live really steal market share from Google? Search = Google and that has not changed for years. If anything I see search engines that focus on specific verticals making the true headway. Here is the full press release:

REDMOND, Wash., Sept. 27 /PRNewswire-FirstCall/ — Microsoft Corp. is releasing an update to Live Search (http://www.live.com) centered on improvements to core search technology and deeper advancements in the vertical search areas of entertainment, shopping, local and health. Collectively, these improvements mark a quality milestone based on the company’s focus on delivering a better search experience for consumers and advertisers.

“With this update to Live Search, our engineering focus is on the areas that matter most to our 185 million consumers who use our service every month. We have made dramatic progress in delivering a better search experience to our customers,” said Satya Nadella, corporate vice president of the Search and Advertising Platform Group at Microsoft. “We know what kinds of things consumers are searching for, and we have invested in those key high-interest verticals, including entertainment, shopping, health and local search. With the core platform in place we intend to win customers and earn their loyalty one query at a time.”

The majority of Live Search customer feedback has focused on improving overall search relevance to deliver richer and deeper results and investing in differentiated experiences in high-interest consumer areas such as entertainment, shopping, health and local search.

Richer and Deeper Results

Microsoft’s efforts toward satisfying its Live Search customers can be grouped into a few key areas:

– Over fourfold increase in index size. Nearly 20 percent of customer
challenges came from the long tail of the Web, indicating a need for
broader coverage to help ensure that the right results can be returned
for the highest percentage of queries. The new Live Search has exceeded
the goal of quadrupling its range of coverage, setting a foundation
that will enable it continue to keep pace with the growth of the Web.

– Substantial improvements in understanding query intent. The new Live
Search does a much better job in predicting the intent of the query to
return the best results possible. New investments improve the search
service’s ability to read and understand queries in a way that more
accurately determines intent despite common problems such as spelling
errors, stop words, punctuation and synonyms.

– Significant enhancements to core algorithms. The new Live Search has
incorporated more user click-stream data to inform ranking and
relevancy processes, yielding more relevant results across queries.

– Increased focus on query refinement. Intelligence in the back end
designed to help customers arrive at improved query suggestions helps
Live Search deliver the best results, even making proactive changes to
the query in cases where the engine is confident of the customer’s
intent.

– New Web data extraction model. Core search innovation enables Microsoft
to build rich vertical experiences that update on the fly. This
technology extracts information from across the Web on products
(including ratings and reviews); businesses (including locations,
contact information, photos, hours of operation, ratings and reviews);
celebrities (including buzz, images and videos); and more.

– Expansion of Rich Answers. Based on user feedback that sometimes people
are just looking for a specific fact or answer, Live Search’s improved
Answers platform provides specialized responses to queries about
specific areas such as weather, images, celebrities and entertainment,
sports, stocks, Yellow Pages, maps or quick facts from Encarta®. This
specialized content has been more deeply integrated into the main
search experience to add to custom searches such as images and mapping.

Additional improvements to the service include a new, cleaner user interface that makes the results pages easier to read and use; a more robust Answers platform that provides instant access to information from trusted sources while increasing relevancy; and organization of results pages based on the high-interest search verticals of entertainment, shopping, local and health on one page.

High-Interest Verticals

With up to 40 percent of searches falling into the categories of entertainment, shopping, health and local search, the new Live Search has made deep investments to deliver specialized content presented in a compelling way across these key vertical search areas:

– Entertainment. Helps customers stay informed on the latest
entertainment news with celebrity instant answers accompanied by images
and a new video search feature that offers smart motion previews, facts
and buzz and new xRank celebrity ranking.

– Shopping. Helps customers easily find and discover products along with
reviews, guides, prices and other relevant information.

– Health. New health search functionality intuitively organizes and
surfaces the most relevant online health content from trusted sources,
allowing consumers to refine searches faster and with more accuracy.

– Local. Allows customers to search local business listings for help with
making informed decisions based on rich details and reviews.

With improvements across the core search experience and infrastructure as well as new experiences and specialized content in key, high-interest vertical areas, the new Live Search puts in place a platform that enables Microsoft to keep pace with customer demand and continue to deliver new and innovative search experiences across a range of scenarios and devices. An early example of these new experiences is the mobile search client, a Software plus Services implementation for the mobile phone that puts the power of the Live Search service in the palm of the hand. Speech-based search combines powerful speech-recognition software on the mobile phone with the Live Search service over the Internet. There is still plenty of room for innovation, and Live Search is well poised to lead in this arena.

Steve Case, founder of AOL, is putting his money behind a new online payment company that will attempt to go up against heavyweight PayPal. The new company, named Revolution Money (I better not hear the Beatles song in their commercials), promises to let users transfer money for free as well as offering a credit card to merchants with significantly lower fees. The credit card, named RevolutionCard, will have an interchange fee of 0.5% which is significantly less than the 1.9% average offered by other cards. AOL has signed on as a initial partner (surprise!) and will let users make payments and transfer through its AIM instant messaging system for free.

Revolution Money’s payment system is currently being tested, but should roll out before years end. I am actually really excited to test this, especially the AIM component. Should be interesting how PayPal responds to the latest threat to their market domination.

Online giant Amazon.com finally launched its digital music store, Amazon MP3, today with a catalog of over 2 million songs…all without copy-protection technology. Amazon MP3 lets shoppers purchase and download individual songs or entire albums. The songs can then be copied to multiple computers, burned to a CD as well as copied to many portable devices, included Apple’s iPod and Microsoft’s Zune. Songs cost 89 cents to 99 cents each and albums sell for $5.99 to $9.99.

In order to streamline the purchasing of one or more songs / albums, Amazon developed the MP3 Downloader, a application that sends your purchased songs to your specified music library…it should be noted that customers do not have to download the application in order to purchase songs.

Obviously the success of any music service comes down to the music selection. Amazon has signed on major labels Universal Music Group and EMI Music Publishing, as well as thousands of independant labels. But, is it to little to late? Are to many people just “comfortable” using iTunes? Is there a big enough market for those left over? The only way we will know is if Amazon sticks with this, signs on more labels and most importantly gets that one big band (Led Zeppelin!) that will draw customers by the thousands.

The Wall Street Journal is reporting that Microsoft is in talks with social networking rockstar Facebook to become a major investor. “The people familiar with the matter said that the discussions are still preliminary and Facebook could wind up not taking an investment from either Microsoft or Google. Factors in the discussions include the valuation the suitors would offer to Facebook and other business considerations they could contribute to sweeten any deal.” Obviously this is just the lastest chapter in the Facebook saga - interesting read none the less. In the end I do not see someone buying Facebook, they have become to big and have to much buzz, I predict they will get another round of funding then head towards an IPO. Once public Facebook will push, through acquisitions, to become the next great online business covering not just one vertical but various areas - e.g. Google.

MySpace is on to something big, really big. Peter Levinsohn, President of Fox Interactive Media (the News Corp. unit that owns Myspace), outlined how MySpace will take down Facebook at a Merrill Lynch’s Media & Entertainment Conference on Tuesday. How do they plan on doing this? By targeting ads to the data on a users personal pages of course! Take a few minutes to digest that…got it? Ok. After more then six months of testing, MySpace is ready launch what they call “interest targeting technology” to a broader MySpace audience. This new initiative will allow advertisers to target consumers with advertisements based on the information they put into their profiles.”What we’re talking about is very new — the ability to make [marketing] decisions based on user interests,” Levinsohn told the roomful of investors and analysts.

The algorithms powering MySpace’s new ad targeting system works by grouping users into 10 key interest group like autos, fashion, finance, sports and games. Along with the targeted groups the ad system determines ad placement by key demographic stats and previous ad interactions. This targeting reaches 3 million plus active MySpace users and during tests within the auto category it improved the likelihood that members would interact with an ad by 70%. 3 million users * 70% = $$$$.

Levinsohn views this as only the beginning for MySpace, with future enhancements enabling even more direct targeting. Levinsohn also spent some time comparing MySpace directly to Facebook, mentioning key stats like MySpace users visit 30% more often than Facebook members.

So who do you think MySpace thinks the most about?