Microsoft Nearing Go-Time for ‘Kumo’ Search?

Microsoft search and Kimo

Microsoft is planning to take the wraps off its long-awaited search engine upgrade, codenamed “Kumo,” next week at an industry conference in Southern California, according to various unconfirmed reports.

The development of Microsoft’s (NASDAQ: MSFT) new search engine has been a loosely-kept secret, from the early reports that Microsoft had purchased the domain name to the leak that the software giant was putting the project through internal testing in March.

Now, the buzz is that Kumo (or whatever it may be a code name for) will meet the world at the D: All Things Digital conference next week. Given that one of the stories citing “sources with knowledge of the situation” comes from none other than AllThingsD, and another from the Wall Street Journal, the two News Corp.-owned publications that are hosting the show, this rumor might be worth going along for the ride.

A Microsoft spokesman declined to comment on the company’s plans for Kumo, but in broad strokes, it appears that the upgrade will incorporate semantic features to make a smarter search engine that presents results in a more orderly fashion.

A search for a movie, for instance, might group results by categories such as reviews, fan sites, theater listings or links to a video trailer.

The push for smarter, better-organized search is a crowded race these days.

At an event last week, market leader Google (NASDAQ: GOOG) introduced a feature called Search Options, giving users a menu of choices by which to organize search results. The same day, Google unveiled Rich Snippets and Google Squared, both designed to produce more thorough and neatly ordered results drawing on the metadata contained in Web pages.

Yahoo (NASDAQ: YHOO), the No. 2 player in the search market, has its own initiative underway to take search results beyond the static list of blue links. Yesterday, Yahoo celebrated the first anniversary of its SearchMonkey project, touting its progress in harnessing sites’ metadata and describing its plans to bring smarter search to the mobile Web.

Then there are a host of smaller players angling for a piece of the semantic search market, such as the recently launched and much-hyped Wolfram Alpha.

One the favorite talking points of Google’s executives lately is that search is still a young, unsettled and fast-moving business. In other words, dominance today doesn’t mean dominance tomorrow.

But a look at the latest figures from online metrics firm comScore illustrates how steep a hill Microsoft, Yahoo or anyone else will have to climb to overtake the market leader.

In April, Google handled 64.2 percent of all search queries in the United States, comScore reported. Yahoo’s share of the search pie was 20.4 percent that month, and Microsoft’s 8.2 percent.

According to Standard & Poor’s analyst Scott Kessler, those numbers won’t move much anytime soon, despite the recent flurry of activity in the semantic search sector.

“Even though competition is an issue, especially given minimal switching costs for users, we don’t think material market share losses for Google are likely over [the] near-to-intermediate term,” Kessler wrote in a research note.

For Microsoft, next week’s debut of Kumo (or whatever moniker it settles on for the new brand) would be the latest step in a longstanding crusade to establish a viable competitor to Google in the search market.

The most visible part of that campaign was Microsoft’s failed takeover bid for Yahoo last year, a botched deal that would have resulted in Yahoo inking a major ad partnership with Google, had the Department of Justice not intervened.

With Yahoo under new management, speculation has rekindled about a possible Microsoft and Yahoo have continued to talk about a search partnership. On several occasions, Microsoft CEO Steve Ballmer has suggested that a tie-up with Yahoo still makes sense, but no new deal has materialized.

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