Net Effect: MSN makes game of searching

Looks to narrow gap between sector leaders via club promo

NEW YORK -- MSN's Live Search saw sizable growth in June fueled in large part by Live Search Club, a gaming promotion driving users to the search engine.

According to Nielsen//NetRatings, Live Search's share of the search market shot up to nearly 13% in June, up five percentage points from May as search volume grew 63% in that period. With growth of more than 46% year-over-year, Google's search engine still dominates the category, though, and Yahoo also maintains a sizable lead over MSN. Both, however, were down in market share and search volume in June compared with May.

Live Search Club, introduced in April, gives users points, redeemable for Microsoft products, in exchange for playing games and puzzles that involve the search engine. Brad Goldberg, GM of marketing for Live Search, said the idea behind the games was to showcase aspects unique to MSN's search engine, including its image search and related search features, which consistently ranks behind Google and Yahoo.

"By bringing users into Live Search Club, we're able to highlight areas where we have differentiation," Goldberg said. "We've designed these into the club so that someone can be playing the game and using the product at the same time."

He compared Search Club to an airline promotion with reward points and described it as a viral form of marketing used to build loyalty and engagement.

The huge spikes led some Web analysts to conclude that users were setting up automated "bots" to play the games and earn points to purchase such pricier Microsoft merchandise as Windows Office or Vista. While Goldberg acknowledged that this fraud did happen and was actually "expected" by his company, he said third parties crunching the search numbers, along with MSN's internal analysts, were able to "filter out" this type of behavior.

Goldberg, though, is taking a long-term approach to Live Search's growth and admitted that he was surprised by June's numbers. He said that the search category is especially fickle and subject to waves and troughs.

"There's always a spike when you introduce a new program," he said. "Our goal is that when we hit a point of stability about three to four months from now, we want to be at a higher point than where we started."

Goldberg said he also wants to grow Live Search organically and that he has seen progress in this regard as well. He pointed to a report by an analyst at Compete that said, stripped of Live Search Club numbers, MSN's search engine still gained about 1% market share in June.

Nielsen//NetRatings is owned by the Nielsen Co., parent company of The Hollywood Reporter.