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Mike Nichols, the new general manager of Microsoft’s Live Search, insists that a typical user no longer notices a difference in the results…

imageMike Nichols, the new general manager of Microsoft’s Live Search, insists that a typical user no longer notices a difference in the results generated by a Google (NSDQ: GOOG), Yahoo (NSDQ: YHOO) and Microsoft (NSDQ: MSFT) search. Unfortunately for Microsoft, that supposed parity isn’t showing up in Live Search’s market share, which badly trails that of its two rivals. Microsoft’s share reached an all-time low in February, according to comScore.

As a result, Nichols says, the company is now focusing on some areas — like branding and marketing — that it has forsaken in the past. Some of that new focus, including a possible rebranding, is likely to show up in an update to Live Search expected later this spring. As for the product itself, he says there are opportunities to deliver a more differentiated experience, particularly around complex search queries.

Will Google and Yahoo fans be willing to try out a new Live Search? Nichols said Microsoft’s research shows that most searchers already use more than one search engine every week. Nichols, who has been in the job about three months, talked with us about where Live Search is headed. Below are excepts from the interview.

More after the jump, including Nichols’ views on why Google is vulnerable

Why has Microsoft had difficulty addressing these issues in the past?

Nichols: Our focus has been very much on the core-product fundamentals. We’ve known that these were problems. I think that was the right prioritization because now we are in the game. Now we do have a product that we would put up in a blind-search test.

How does the Kumo search prototype (which Microsoft started testing internally earlier this month) solve the problems you outlined?

We’re testing, not just in the Kumo test, but in all kids of top-secret prototypes that I can’t tell you about all kinds of ways to address these and other opportunities.

There’s a bridging of the way that people use search today to address many of the problems that we see … that only a few providers are well positioned to do. In our case, we’re the best-positioned to do this because Google suffers from the innovator’s dilemma. To a degree, every change they make to their search engine has a potential revenue implication for them.

In our particular case, we, of course, care about revenue as well, but we’re not in the market position they are in. We are in a position where we can be a bit riskier.

Results in Kumo are automatically categorized. Is this what you mean by making it easier to conduct complex searches?

Well beyond that. I believe there are a ton of different ways to do better on these types of tasks. We are testing some of those things in the test environment and there are some that haven’t even been rolled out.

Why would you want to use the Kumo name in a rebranding?

I’m not going to argue for it or against it. It is just a name that we are testing at the moment. I’ve read some of your stuff and others too speculating about other names that we own the rights to that we can decide to do. And there are plenty of others that we can consider as well. We’re not closed to the option of sticking to our brand but putting meaning into it.

What do you mean by giving meaning to the Live Search brand name?

We haven’t done a good enough job informing customers that we have a strong product that is worthy of trial today, not to mention the stuff we have coming. … You need to make people aware of why that product is worthy of their trial. And we haven’t done a good job of making people aware of why they should try it.

Can you tell me when this is all going to be settled?

I’m afraid not.

In a year, will you have more market share than you have today?

I’m going to let you predict. I don’t want to get quoted saying that. We are certainly aiming to improve our market share, so I am not trying to be cagey on it.

Considering recent market-share trends for the major players, is it realistic to think that you would ever be able to catch up with Google on your own?

I think the data we see in terms of people being used to using multiple search engines, the data we see in terms of people being willing to change their primary search engines, the data we see in people having changed the dynamics for how they use search engines and all the opportunities we see here with ways that search engines could be improved — I absolutely think a better mouse trap has the potential to win in this area so we are working on building a better mouse trap.

  1. First Microsoft needs to have revenue path for its search technology. I don't see one. Without the clear goals spending money is purely waste.

    Build products like Adsense and Adwords(similar to Google) make sure ads are delivered based on page contents. Microsoft made Adcenter similar to Adwords but i have not seen anything similar to google's Adsense product.

    Indexing internet is the complex task everyone thinks. But i think making products with this massive data and giving them as services to customer is still more complex.

    Microsoft is a great company. Microsoft made PC simple to use for anyone starting from DOS to Windows and keeping consistent look and feel. This didn't repeat in search area.

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