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Gates To-Do List: Repaint Semel's Office

David A. Utter
Staff Writer
Published: 2006-05-18

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If Microsoft can fulfill the promise of Bill Gates' address to the CEO Summit in Redmond, Yahoo's CEO Terry Semel may be dining on a large slice of humble pie.

It's easy to characterize the commentary from chief software architect Gates as a master plan to turn rival Google's headquarters into a parking garage. If the company can fire on all its cylinders, and really drive gains in search, online advertising, and web services, it's not Google that has to worry, but Yahoo.

If Google had performed half as well during its last financial quarter, it would have met Wall Street expectations instead of blasting them out of the water. Would Semel be quite as dismissive of Microsoft's bid for Yahoo Search if his company's search ad revenue had dropped by half?

Search forms a big part of the Microsoft strategy, as illustrated by Gates and the reorganized Microsoft leadership. Search and information sharing will be embedded throughout Windows and products like Outlook, SharePoint, and Office.

The Microsoft folks claim to have completed a lot of work with relevance and ranking for documents published through SharePoint. That would speed up sharing of information through an enterprise.

Outside of the corporate world, Windows Live exists, with an improved search capability features like infinite scrolling search results and a slider control to contract or expand each result.

Should the improvements in search inside and outside the desktop prove as good as Microsoft claims, its forthcoming debut of the AdCenter self-service advertising product could make a big impact in the online advertising market, currently dominated by Google and Yahoo.

Yahoo has promised its updated search advertising services will arrive by the end of 2006. That gives Microsoft a couple of quarters to head off Yahoo's resurgent advertising business. If Microsoft makes its AdCenter a relevant and effective product that gains converts from both Google and Yahoo, there's no question who of the pair will fare worse.

Semel said in a Financial Times report: "My impartial advice to Microsoft is that you have no chance. The search business has been formed."

The thing about formations is that someone else can come along with a hammer, a chisel, and a vision of what it should look like, and change it completely. Semel would do well to recall the story of the stonecutter before counting Microsoft out of the business.

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About the Author:
David Utter is a staff writer for WebProNews covering technology and business.

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