Microsoft announces plans to open search technology centre in Europe

Microsoft is still gung-ho on search even after the debacle of its concerted efforts to acquire, or at least tie-up with Yahoo. Perhaps, that's because it realises that the future of computing may well shift from the desk space to cyber space, and Internet search is the most visible platform on the World Wide Web. Moreover, archrival Google already has a considerable head start.

Accordingly, the company today announced plans to open a search technology centre (STC) in Europe as part of its plan to accelerate investments in Live Search. In Europe, Google's dominance is even more than in the US, accounting for as much as 80 per cent of all searches, while Microsoft's share is a paltry five per cent, compared to a 10 per cent share worldwide.

"We are not yet where we would like to be in search in this critical geography," said Kevin Johnson, the president of the platforms and services division at Microsoft, making the announcement at the Cannes International Advertising Festival today.

"Success in search in Europe is paramount and we see the investment … as an important step in doubling down our long-term investments," Johnson said.

The search technology centre will be dedicated to delivering a "locally relevant, more intelligent and powerful search engine experience", Microsoft said. It will be opened in Microsoft's 2009 fiscal year, starting 1 July 2008. The first STC outside the US had been opened in Beijing, China in October 2005.

Microsoft said the opening of the search centre, with "several cities" currently being considered as the European hub, would build on its recent US initiative to offer cashback rewards for users of its search engine who go on to make purchases from retailers. (See:  Microsoft to buy internet search with Cashback to 'get Google')

"Searchers have different expectations and experiences in every geography in the world, so we believe it is critical to make deep investments in physical locations in multiple markets to ensure we are applying the best local expertise to our research and development efforts," said Satya Nadella, senior vice president of the search, portal and advertising group at Microsoft.

''We're already doing some great work in Europe in the enterprise search space through our January 2008 acquisition of Fast Search & Transfer SA, and we're looking forward to opening the European Search Technology Center to further our investments,'' he added.

This move is in line with other investments Microsoft is making in Europe in the advertising business, including the planned expansion of the DRIVEpm media network in fiscal 2009 into European markets including The Netherlands, Belgium, Sweden, Denmark, Norway and Finland. DRIVEpm does business today in the United Kingdom, France, Germany, Italy and Spain.