Google says Microsoft is unfairly using the new Web browser to steer users to MSN; Microsoft says no way.
Google Inc. is upset that Microsoft Corp. has made MSN the default search engine in Internet Explorer 7, but the software maker says changing to another search provider is easy enough for most people.
With a $10 billion advertising market at stake, Google, the fast-rising Internet star, is raising objections to the way that it says Microsoft, the incumbent powerhouse of computing, is wielding control over Internet searching in its new Web browser.
Delivering text advertising related to search queries is a multi-billion-dollar market that Google dominates. Microsoft launched its big push in the market about a year ago.
The latest fight between the two rivals involve a small rectangular box located on the upper right hand corner of IE 7, currently in beta 2 and set to ship in its final version this summer. The box makes it possible for people to begin their Web search from the browser, rather than going to the provider’s homepage.
Google contends that this puts Microsoft in a position to unfairly grab Web traffic and advertising dollars from its competitors.
The stakes are high for Google and Microsoft, because Internet Explorer, despite losing some ground to Mozilla Corp.’s Firefox browser, still accounts for about 85 percent of the browser market. Google based in Mountain View, Calif., estimates that between 30 percent and 50 percent of searches will begin at the browser, when it offers a search box, according to The New York Times, which first reported the squabble.
Google, which only recently began beefing up its lobbying efforts in Washington, says it expressed concerns about competition in the Web search business in recent talks with the Justice Department and the European Commission, both of which have brought previous antitrust actions against Microsoft.
Google said consumers should be given the opportunity to choose a search engine when installing IE 7, rather than have Microsoft choose for them.
Our biggest concern is for the users, Marissa Mayer, vice president for search products and user experience at Google, said in an email. "We do not think its right for Microsoft to just set the default to MSN on install, we believe users should choose."
The move, Google claims, limits consumer choice and is reminiscent of the tactics that got Microsoft into antitrust trouble in the late 1990’s. Mayer went on to say, "The market favors open choice for search, companies should compete for users based on the quality of their search services."
Microsoft, on the other hand, denies Google, or any other search engine, is at a disadvantage.
Microsoft replies that Google is misreading its intentions and actions. It says the default settings in the browser, Internet Explorer 7, are easy to change. And it says the product was designed with consumers and many partners in mind – even though it might not be to the liking of Google, the leading search engine.
We have developed the new version of Internet Explorer around the guiding principle that the user is in control and can easily choose the search provider they want to use, Microsoft said in an emailed statement. Microsoft is fully committed to supporting search options and we have worked closely with others in the industry to ensure that adding to and modifying the list of search providers and choosing a default provider is easy, safe, and open, said Dean Hachamovitch, general manager of the Internet Explorer group.
On its IEBlog,Microsoft said that it has received no comments on the issue from any of the 24,000 testers who have received copies of IE 7 throughout the development process.
"The short version is that of all the feedback we have received on the product, changing the default search provider is just not an issue for typical end users," the company’s blog said.
While Google has not filed any formal complaints against Microsoft, it has discussed the matter with the European Commission, which is investigating whether Microsoft’s handling of Vista is an abuse of its monopoly in desktop operating systems, Google spokesman Steve Langdon said. While not addressing the issue directly with the U.S. Justice Department, Google has spoken to the agency about the importance of maintaining competition in the search market.
Companies often talk with antitrust officials, and the talks do not imply that an investigation is imminent. But they do indicate that Google is pursuing every option in its escalating rivalry with Microsoft, which has already led to some public battles.
Microsoft in 2000 settled a Justice Department lawsuit that accused the company of anti-competitive behavior for leveraging its dominance on the desktop to capture a majority of the Web browser market. Google fears Microsoft is using the same strategy with IE 7, which will ship with Vista, the next major Windows upgrade set for release in January.
That slice of on-screen real estate has the potential to be enormously valuable, and Microsoft is the landlord. Internet Explorer 7 is the first Microsoft browser to have a built-in search box, while other browsers like Firefox, Opera and Safari have had them for some time. Google estimates that the boxes, when available, are the starting point for 30 to 50 percent of a user’s searches, making them a crucial gateway to the lucrative and fast-growing market for advertisements that appear next to search results.
Microsoft has lost some ground in the browser market in the last year, mainly to Firefox, which is a Google ally. But Microsoft still holds more than 80 percent of the market. And Internet Explorer 7 is expected to be extremely popular because it is an improvement over Microsoft’s previous browser, and because Microsoft will promote downloads of it and include it in Windows Vista.
That gives Microsoft the potential to use the browser to steer substantial traffic, and business, to MSN and away from rivals. MSN handled 11 percent of searches in the United States in March, down slightly from a year earlier, according to Nielsen/Net Ratings, a market research firm. That put it well behind Google, which had a 49 percent share, and Yahoo, with 22 percent. Microsoft insists it has no intention of deploying its browser as a weapon in the search wars. But Google suspects otherwise.
Last December, Google outbid Microsoft to remain the primary search service on America Online, paying $1 billion and taking a 5 percent stake in AOL. Last year, Microsoft sued Google to stop a star computer scientist and manager at Microsoft, Kai-Fu Lee, from working on search technology at Google. The suit was settled, and Lee runs Google’s operations in China.
While it is true a person can change from MSN to another search provider, the process is not as easy as Microsoft could have made it, Joe Wilcox, an analyst for JupiterResearch, said.
Microsoft offers a drop-down list at the search box where a person can choose to go to a Web page and add other search engines, including Google. After adding providers, a person can then use a separate process to change the default setting.
Microsoft replies that giving users an open-ended choice could add complexity and confusion to the browser set-up process, while offering a few options would be arbitrarily limiting.
Instead, those wanting to pick a new search-box option in the new browser need to click through a menu with options like "Get Search Providers," which links to a Web page with six search engines including Google and 16 "topic search" sites, from Amazon to MTV to Wal-Mart.
Hachamovitch, who led Microsoft’s browser team, said MSN was not always the default search in Internet Explorer 7. When downloaded, the new browser inherits the settings from the old Microsoft browser, version 6. But the search default in that program was based on a feature called Auto-Search that Google says was not widely used.
Hachamovitch said Microsoft’s user research and early reviews indicate that it is easy to change the default setting. "People seem to be O.K. with what we are doing," he said.
Google counters that claim with a study it sponsored that was conducted by Tec-Ed, a research firm. It found that only a third of users could master the four-click process to change the default.
The Firefox and Opera browsers come with Google set as the default, but Mayer said Google would support unfettered choice on those as well.
Whether Microsoft’s treatment of the search box will have an impact on the search market is uncertain. From an antitrust perspective, harm to competition is the litmus test, not just swinging a sharp elbow or two. There are many ways people get to search engines other than through a search box – for example, by typing google.com in the browser or making it their home page.
When Internet Explorer 7 begins to be loaded on new machines next year, computer makers like Dell and Hewlett-Packard will be free to determine what search engines and other sites they feature in the browser’s Web guide and search box.
That promises to be valuable screen real estate indeed, especially the coveted spot as the preferred search engine, which the computer makers are likely to sell to the highest bidder. Google and Yahoo have deep pockets, but no one can match Microsoft’s spending power.
"People will be bidding aggressively to get in that space," said Hachamovitch of Microsoft. "And that is a good thing."
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