Microsoft Clubs Its Way to Search Gains

In the grand scheme of search, the percentage changes might seem small. What's more significant is the trend.

Microsoft was the only search provider to gain market share from May to June. Three of the top five search vendors—Google, Time Warner and Yahoo—together lost 2.9 percent of the market share. Apparently Microsoft snatched shares from them, gaining 2.9 percent month after month.

ComScore largely attributed Microsoft's gains to its Live Search Club, which is a few months old. Users play games using Windows Live search and some win prizes. The gaming generates Live Search queries. In a sense, Microsoft is paying these gamers to use Live Search, a strategy that may be paying off for Microsoft.

While Google and Yahoo lost search share in June, they both saw month-over-month increases in search volume, according to ComScore. Google rose from 3.9 billion to 4 billion performed search queries; Yahoo rose slightly off its base of 2 billion queries; Microsoft search queries jumped to 1.1 billion from 782 million; Ask search queries rose to 403 million from 384 million queries; Time Warner declined, from 384 million to 341 million search queries. Overall, Americans conducted 8 billion search queries in June.

Live Search Club helped boost Microsoft's search volume by 36 percent, according to ComScore. Some other search trackers see higher gains. Compete put Microsoft search query volume up by 67 percent from May, or 48 percent year over year. Like ComScore, Compete attributed most of Microsoft search gains to Live Search Club, which chocked up 3 million unique users in June.

The pay-for-search scheme isn't necessarily sustainable. It's one thing for Microsoft to woo people to play Live Search games, while it's something else to convert them to consistent users. Nevertheless, Microsoft has demonstrated how volatile the search market can be, including the ease with which queries can shift elsewhere.

The weakness in Google's business model is the business model itself. Search isn't sticky enough. People can change search providers by typing in a new Web address. Software is very customer sticky, because of the natural barriers to switching.

There is no indication yet of massive search defections because of Live Search Club and there may never be. But the shift in flow of the search market share demonstrates what could happen and why Google is so headstrong about creating sticky applications.

[Editor's Note: Table Updated.]