Lagging in search, Microsoft still looks to be No. 1: Berkowitz

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NEW YORK - This year's Search Engine Strategies New York keynote conversation was with Steve Berkowitz, senior vice president of Microsoft's online services group, which includes MSN and Windows Live.

He told SES conference chair Danny Sullivan that while Microsoft was currently lagging behind search leaders Google and Yahoo, the company was developing technologies that would project it in the long term as a chief competitor in search.

A former CEO of, Mr. Berkowitz said Microsoft had a great number of ideas, talents and new products that it was "figuring out how to unlock the potential of."

The company has said on a number of occasions that it needed more time and that it was the early days in the search business.

"We haven't done a good job at making ourselves cool," Mr. Berkowitz said. "We have many great products and technologies. What we need is deeper engagement with customers. We need to tout our technology more. We also need time to do that."

One of Microsoft's goals is to turn its 500 million users into searchers by focusing on both destination search and convenient search.

"When I think about what I have to do now, it's really about unlocking that potential, which is incredible -- the technical talent that's there, the marketing talent that's there, the stuff that's going on in our labs, it's just really creative stuff," Mr. Berkowitz said. "Learning how to market it and bring it to market in a more creative, innovative way … It's really about innovation around the core. We're making some great strides in how we engage our audience."

"We've got an interesting ecosystem in this business," he said. "So the question becomes, over time, 'How do you look at how you share value in that ecosystem?' You have partners, you have advertisers, you have consumers, you have content creators. We, both as a technology provider and an audience aggregator, have to figure out the business models to partner across … and share the value that the system creates."

He said his tasks would include focusing on delivering to advertisers and helping to bring the PC to the Web. He also explained the need to address the way in which the Web was evolving toward user-generated content and the importance of "building a critical mass to deliver to."

"There really isn't a difference, in my opinion, between advertising and the content: It's all about how do you deliver the most relevant page," Mr. Berkowitz said. "We need a simpler delivery platform to do that. It's all about figuring out what the customer wants, being customer-focused."

Speaking to the future of the PC on the Web, he said Microsoft was bringing out more live, current events and more user-generated content.

When asked whether it would it be satisfactory to be No. 2 in search, Mr. Berkowitz replied: "No. It's not ever satisfactory not to be No. 1."

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