Microsoft uses Europe as base for search market battle

Written on 4th October 2008                                                                                                              COMMENT
Ernst-Jan Pfauth, editor in chief

Sometimes your blogger misses news throughout the week. Fortunately, there’s always the weekends to catch up. How about this one: “Microsoft steps up Web search R&D in Europe” on Reuters.com. Microsoft CEO Steve Ballmer traveled all the way to Paris to announce that his company is about to open three research centers in Europe. Why? Well, to catch up with Google on the field of Internet searching. The offices, or “hubs”, will be based in Paris, London, and Munich.

Quite a challenge, and an interesting new approach after Microsoft failed to acquire Yahoo, which now lures with Google. The current Microsoft budget for R&D in Europe is around $600 million a year, but this will increase dramatically. Since Ballmer said that “over the next few years we expect to employ several hundred people, software developers, in these centers in Europe.”

Ballmer told the press that he believes search is still in its “infancy” and thus there’s enough room for innovation. He called Microsoft the “challenger in search”. “For companies like Microsoft search is the key for unlocking huge new opportunities in advertising,” he said.

According to Web research firm ComScore, Microsoft has about 2 percent of the European online search market, compared with Google’s 79 percent.