MSN Search News Teleconference Call

ADAM SOHN: Good morning. This is Adam Sohn from the MSN Public Relations team. Thanks for joining us this morning. We’re actually joined not only by Yusuf Mehdi, corporate VP in the MSN division, but also Christopher Payne, also a corporate vice president. Yusuf will start things off, we’ll talk to you guys for just a couple minutes and then we’d like to open it up for questions from Chris and Yusuf.

There will be a press release on this morning’s news. We expect it to hit the wire in the next probably 15 or 20 minutes that can also be accessed at Press Pass, which, as many of you know, is

And with that, I’ll turn it over to Yusuf and we’ll get started.

YUSUF MEHDI: Hi, good morning. Christopher and I are excited to talk with you guys today about what is probably one of the biggest announcements we’re making for our MSN search efforts over the last 12 months in the release of what we are calling the MSN Desktop Toolbar Suite, which among other things does local search for your e-mail, hard drive files.

This effort I think of basically as expanding the charter that we’ve had for the MSN Search effort, which is to answer people’s questions precisely. We have been trying very hard to build a next generation search effort that can go beyond today’s search to help really answer people’s questions in a unique way, and part of that strategy has been that we want to go out and really broaden the selection of content that’s available to the consumer.

So today’s beta release is really a chance for us to get some test effort and some feedback on our products that we then will hope to deliver sometime in the beginning of next year.

Now, the Desktop Toolbar Suite, we’re very excited about this release because as we’ve been working on search for some time here at Microsoft, we have put together a lot of great technology and ideas and in this instance we believe provide even at the beta a clear leadership solution for people both at the home and in their office.

And in particular, as you all know, we’ve had the ability to search files within Windows, within Office for some time. We’ve been working on our own beta search effort for Web search now and it’s been in beta and getting great reviews. And we we’ve gone forward, we really wanted to take this effort to the next level and do something that I think no one has done to date, which is to combine the best of the user experience on the PC and the speed and relevance of what you can do with the Web; and no one has really brought those two things together.

So in particular there are a couple things that you’ll notice when you see the service that goes in beta today. The first thing is that we provide an incredibly fast and precise way to answer your questions from local information searches on your PC. We will search across what we believe is the broadest set of content that’s available on your hard drive, so beyond what you see in a lot of the services, we’ll index all of your e-mail information, e-mail, calendar, contacts, notes. We’ll go across a number of large file types, including PDF, which is pretty unique, as well as GIFs and bitmaps and among other topics, and we’ll not only index those efforts but we’ll actually do full text indexing and in some cases we’ll even withdraw the metadata. So the ability to search across the widest number of types is here and Christopher will go in and detail some of those for you in a little bit.

The second thing we do then is we actually put that in in a very familiar place and a familiar way that you’re used to using your PC. So unlike some of the other solutions that force you to either go out to a Web page to try and find what’s on your hard drive, which we think is a little bit of a complicated step, we will within the same, familiar experience of Windows or Outlook in this case give you the results so that when you do a search for e-mail it will look and feel like you’re searching within Outlook.

And then to go beyond that, we’ll give you additional functionality that again you don’t get with some of these other Web-like approaches, which is we’ll give you the ability to immediately sort, click through items, we’ll let you do what we call “verb action” so that you can copy, delete, forward; things that give you really rich functionality, because what good is it if you can search it but you can’t do anything with it when you find it, and we wanted to go beyond that. So that familiar look and feel, whether you’re in Outlook, whether you’re in the Windows shell, whether you’re in another experience, we will enable uniquely with our service.

The third thing is that we really make it much easier to get access to this information. So again rather than having to go type in a URL to navigate, natively with our Toolbar Suite we can let you access things from within Outlook, right within the shell of Outlook you can type in and do an e-mail query, within the Windows shell, even on your Web site desktop with our Desk Bar we will allow the ability just to type in and find immediately what you’re looking for. That’s also a big ease of use innovation that you don’t see in a number of the other solutions.

We have a bunch of other great features within the Toolbar Suite, too, which I won’t dive into now but we can take in Q & A, which is we do really nifty things like Word Wheel so that even if you don’t know what you’re looking for, as you start to type, we will start suggesting what might be the likely answers and what you’ll see is that this can go beyond just desktop searching to really be a primary way that you might want to use your PC to access any type of information and to launch applications, so some really powerful ease of use features there.

The other two things that are important in that effort is that, No. 1, our Toolbar Suite, while it works fantastically with your local PC and we’ve gone to great lengths to make sure that it works very, very simply and very intuitively, we also do a nice extension to your Web search. And as you know, we released a Web search effort beta, I think it was about a month ago, which we’re very proud of, and that is integrated nicely with this service. So the ability to search for a file and go between your desktop and the Web is just a click, it’s very simple, uses the best of our current Web search beta, which, as you know, indexes 5 billion docs, it’s very fast, has some unique features that you don’t get in some of the other services like Encarta answers and Near Me Geo Tagging of the Web.

And then finally, we have also, I think, with the heritage of Microsoft orientation and attention to quality, done a really good job we believe on privacy protection. Here again we’ve built on top of the Windows security and privacy model and we do a number of things that I think are somewhat unique. We’re respecting the privacy of multiple users on a single PC, which is quite unique I think relative to other efforts, because we utilize the Windows authentication and user account management infrastructure. So this gives you more confidence in terms of how you can use the PC and keep your information private.

The other thing is that we’ve really been careful with how we try and index Web pages. We don’t, for example, try and do a cache of everything that’s been seen on the Web. In many cases, as you’ll see in other services, they don’t do a good job of respecting secure information. So if you have, for example, if you use the PC to log into your bank account even over HTTPS, that file can, for example, still show up in the search on a PC and if someone else is using it, they can get access to that. These are all things that gave us a lot of concern. We thought we would move more slowly on that and do a better job, so we’ve done a good job there on privacy protection.

So really just to come back and summarize at the top level and then we’ll let you ask some questions, we believe our Toolbar Suite is unique and goes beyond anything that’s been out there today in the sense that we offer the broadest selection of file types, we do a richer index and query on the metadata and all information, we integrate that uniquely in and very nicely with your Windows and Outlook user experience, we’ll get you one-click access to it from a number of different places and then, of course, we really protect the privacy of your experience on that service. So those are really the key things that we think make this service something that goes beyond what is out there today.

And the last thing I think I’ll say is that we are optimistic about how this becomes really an important way that we differentiate against competition. So we have very clearly focused on the consumer and what we think we can do to advance their capabilities and we feel very good about that, but there is a lot of exciting competition in this space and we think this is actually one of the ways now where we actually take a lead in terms of what we’re doing with our service. I know that we have been doing a lot of work to catch up with our Web search beta and we feel like we’ve done that to get in the game.

This is an area now where I think we go beyond. I think people expect Microsoft to do a fantastic job on client code and on searching within Windows and Office, and I think what we’ve delivered here in partnership with the Microsoft Office team, with the Knowledge Interchange team and with a number of other teams around the company, we have built and delivered what I think people expected of us, which is the best way to search your PC.

So with that, I’ll go ahead and stop and Christopher and I will take some questions.

QUESTION: Hi, everybody. Thanks for taking my call. The first question is how long does it take for the software to read the contents of the hard drive and find what’s there to search? I’ve downloaded the program while we’ve been on the phone and so far it’s not finding much, it’s going through the process, so tell me about the process.

CHRISTOPHER PAYNE: Yeah, the length — this is Christopher Payne. The length of time it takes actually depends on what you’re doing with the PC at any particular point in time. One of the things we’ve spent a great deal of time and energy on is making sure that we back off and are polite when you’re using your PC. So while you’re sitting there at the PC and using it, it should back off and not index. At idle time it should do the indexing. Any user though can simply click on the icon in the tray and choose to Index Now and that will begin the indexing process.

And then obviously the amount of time it will take will depend on the amount of information that you have. We have many people here that have lots and lots of e-mail and the first-time experience is incredibly fast when compared to others in the market, but it’s very hard to give a precise number due to the interaction that it has with you using the system and trying not to consume the processor time disproportionately.

YUSUF MEHDI: Yeah, I think the key thing is with all of these services, the first time you index takes some time. We believe we have the fastest time to index your PC on the first time out. And then once we do that, we do something unique, which is we do an incremental index, which other services don’t do, so that you don’t miss anything. So every time you start up, we’ll automatically do a quick check and index whatever has happened since the last time you’ve been up and so that helps it be incredibly speedy in terms of index time. I believe it probably would be at the top in terms of all the services that are out there in terms of index time.

CHRISTOPHER PAYNE: And it’s important to note also that indexing, that initial index is a one-time operation and then from that point on it is completely incremental in nature.

QUESTION: Hi there. Actually, a couple of questions. First of all, is there any interest in extending this to other Windows operating systems like Windows CE, Windows for Smart Phones?

And the next question is when is this going to be available in languages other than English, particularly Japanese?

CHRISTOPHER PAYNE: In terms of extending this beyond the PC version of Windows, we don’t have anything to announce at this time. However, one of the things we’re trying to do is absolutely make it search a ubiquitous tool that’s available where and when you want it, and so we’ll be absolutely pushing to include search in other entry points. Just like we have this time with Outlook being able to easily access your e-mail from within Outlook, I absolutely think it makes sense in the scenarios you outlined to be able to easily access the information you need from mobile phones and others, but we don’t have anything specific to announce at this time.

YUSUF MEHDI: The languages.

CHRISTOPHER PAYNE: Other languages outside of English we hope to release early in the next calendar year.

QUESTION: Good afternoon. The question is how long do you anticipate the beta lasting and when would we look for this to be generally available?

CHRISTOPHER PAYNE: Yeah, this is Christopher. We’re going to be very focused on the quality of this system and so we’ll be running the beta to get feedback from our community of users to understand how well we’re operating and where we need to improve it. And so the quality of the service and the feedback we get will gate when the final release will happen. It’s our hope that that’s early in the next calendar year, but we’ll obviously be waiting for feedback. We’ve done extensive testing inside, we’ve got thousands of users inside of Microsoft Corporation to date that are thrilled with the service, so we’re very optimistic about our chances to get it in release form early in the calendar year.

QUESTION: Yeah, hi, guys. I’d like to know a little bit more about the privacy aspect of this. Specifically, can you give more information on how you treat HTTPS Web pages?

CHRISTOPHER PAYNE: Yeah, this is Christopher. Our service is a little different than some of the others that are out there. We’re not monitoring the HTTP traffic, so we’re only indexing the files on your disk. We’re also not indexing the cache, the Windows IE cache. And so what that means is we’re not indexing the files that some of the other folks are indexing unless you explicitly ask us to do that.

And so by default you’ve got an experience where it’s just much more secure and protects your privacy because it’s not monitoring things that you may not think would be indexed. Other services sometimes monitor traffic inside and out, so looking at a banking Web site, for example, they cache that information. Our design is completely different than that, we don’t do that and so we respect that.

Also when you do things like delete e-mail and those types of things, because of our incremental update model, when you delete a mail in Outlook, our index gets notified of that, it’s removed from the index immediately, so if you wanted to remove it from your machine you’re doing that. Some other models aren’t as timely and that also results in perhaps it not being as private as an end user would expect.

QUESTION: I was hoping just to find out which versions of Windows this works with, and also whether there is now or whether there will be any advertising on the service.

CHRISTOPHER PAYNE: This is Christopher. The current version works on Windows XP operating systems or Windows 2000 SP 4 and above, and the full requirements will be in the press material as well, like memory and those types of things.

YUSUF MEHDI: The second one was about advertising.

CHRISTOPHER PAYNE: Oh, the desktop results do not include advertising and at no time is your information sent back to our Web servers. All the information is completely local to your PC, held private and secure. If you do a Web search, obviously we have our advertising in that model but we do not have advertising on desktop results.

QUESTION: Yeah, because we’re essentially talking about a separate download, will you be offering the download in other kind of venues other than through your search, so when people download like Explorer or new versions of Explorer, will you make it an option in order for them to get this search tool, are you looking for other channels to get it out there?

YUSUF MEHDI: This is Yusuf. We are definitely going to enable broad distribution of our Toolbar Suite. We haven’t figured out all the ways we’re going to put that out. Today with Messenger we have distributed over 60 million MSN Tool Bars, which is an amazing number and that number continues to go up. So I have confidence that even with our own distribution capabilities within MSN, which includes Messenger and obviously our very popular homepage, we could probably reach upwards of about 100 million people with the Desktop Toolbar Suite. We will look at other ways to distribute it and I think you can assume we’ll have it pretty broadly distributed.

QUESTION: Morning, gentlemen. I was wondering if you plan on offering the desktop search feature as a standalone product, not inside the MSN Toolbar? Right now I found out I was trying to download it using Firefox and it wouldn’t let me; that was one thing.

And then the other thing is which files does the desktop search actually scan? For example, I use a lot of Lotus Notes databases, there are a lot of people out there who use Access databases. Does desktop search allow you to search into those databases?

YUSUF MEHDI: Yeah, good question. We’ll start out with — why don’t we start out — the first part of your question, I forgot, was whether we can distribute it without the toolbar. So in the beginning it’s distributed as one package of information because part of what happens is we want to integrate it really nicely within all of the user experience. There should be a way to customize it so that you can get all of the benefits of the desktop search but if you still want to run other toolbars you can run the other toolbars as well. And so we will do that, although one of the beauties is that we do integrate seamlessly between the Web and your desktop, which we think is an advantage.

In terms of the file types, as we said, I believe we have the broadest selection of file types. You named a couple that we don’t have just yet. I believe with Notes — I’ll let Christopher follow up on the one about Access, and so those are good things to take a look at and we want to take feedback like that to add more. But among a lot of the popular things today, PDF, Outlook contacts, et cetera, bitmaps, AVIs, files, we do a good job and we’re going to continue to expand. You should assume that with MSN search we want to offer you the best and broadest selection of anything that is out there on the Web. That is going to be our strategy to really differentiate and win for the consumer.

QUESTION: Hi. I guess my major question is, is the location of the search, that is whether it’s on a Windows page or Outlook or wherever it is, is that enough to get ahead of or stay ahead of the competition, Google, Yahoo, Teoma and others?

YUSUF MEHDI: I’m sorry, could you repeat that one more time?

QUESTION: Will that be enough, is that the push over the cliff, as it were, to get ahead of Yahoo, Google and Teoma, just the mere fact that where you start your search is a few clicks earlier than going to Google or some of the competition?

YUSUF MEHDI: This is Yusuf. Clearly we don’t think that’s enough. I mean, our ambition for search is to provide the ultimate information tool that can basically answer any question you have. And to do that, the investment and time we’re making we think is a 10-year plan, it’s going to go across all sorts of technologies, whether that’s natural language, whether it’s brought into other types of files types. We’re going to bring the power of software to bear where we can go beyond just giving you thousands of links in milliseconds but actually answer your question directly. And to do that, there’s going to be an amazing investment of time and people.

So the nice features that I mentioned about just being able to simply type in and now have to navigate to a URL, well, I think that’s a great feature, I clearly think it’s one small feature in a line of hundreds of things we’re going to do to improve.

I will say that what we have provided here today is, I believe humbly, a very big leadership feature though. It is already today in the beta vastly differentiated from any of the other services you mentioned, Google or others, in terms of the ease of use and the familiarity with how you use Outlook. If you’re an Outlook user, and many folks in corporations are, this basically revolutionizes the way you use Outlook.

When we bought Lookout Soft, a great, little company that had some technology and a loyal base of about 100,000 users, the promise there was it would change the way that you use Outlook. And when Christopher and I have used that technology, we said, wow, this is amazing. You almost didn’t have to start using files and folders. We bought that company, we had similar work going on in the company, we combined the two and what we have here when you go and try it, I believe humbly it will change the way you use Outlook. And that’s what we’re offering in beta today, I think that is differentiated from Google and I don’t think we’ve been able to make that kind of a strong statement in terms of our catch-up with our MSN search efforts until today and so now we’re pleased and we’re looking forward to the feedback from customers that bears that out.

CHRISTOPHER PAYNE: And one thing I’ll add — this is Christopher — it’s not simply about the entry point, let’s take Outlook, for example, but it’s about the focus on the task there of connecting you to your e-mail. So, for example, we don’t just index your e-mail, we index all your contacts, all your calendar, all your tasks, all your notes and we make that information completely available to you.

Also when you do that search and you want to delete the mail, you absolutely can do it from our search interface. You want to drag and drop and send that to somebody to forward it along, you absolutely can do that. We take advantage of the fact that we’re on the user’s machine so that we can use the client code to provide a rich experience that they’ve come to expect, know and love on the PC. Additionally, we also search through attachments and allow you to find that information as well.

So this is a critical step but only one piece of our strategy in search.

QUESTION: Yes, hi, thanks. My question is you probably saw Yahoo’s recent announcement, and I’m curious to what extent today and this beta you’re actually integrating in with MSN services? You mention them in the press release but is there any functionality today or planned in the future where you can actually search MSN Mail, MSN Spaces, those types of services?

CHRISTOPHER PAYNE: There is a significant amount of integration in the MSN Toolbar Suite with MSN properties. The principal form of that integration occurs in the toolbar that you would see in Internet Explorer that allows for easy navigation to MSN properties like the My MSN, your Hotmail, the New Spaces announcements from our Communications Services team last week, as well as Messenger. Also if you choose to save your Messenger conversations on your PC, we also will allow you to index those as well.

And so that concept of deeply integrating with the MSN services is something that we will continue to push forward with future releases but there’s significant integration that we think makes this the no-brainer choice for the MSN customer who wants enhanced search functionality on their PC.

MODERATOR: A couple other features there just on top of the ones Christopher mentioned, within the beta of the new communications suite that he mentioned, I believe it’s 7.0, we provide the ability to search natively now within Messenger itself. In fact, you can actually right-click on a verb and click search within a Messenger conversation window, which is incredibly powerful. So now when you’re communicating with people, a word comes up or a topic comes up and you want to get some information, we basically in two clicks let you get the power of our beta search within your Messenger window. I believe that’s pretty unique in terms of what’s been out there.

And the other thing is if you get your Hotmail downloaded and you view it within Outlook, we will be able to do that as well and provide search across that, so that’s another capability.

So I think with that, just to wrap up, we appreciate your time today, we really encourage you to try the beta product that you can get at — I’ll say that again, is the place where you can come and download the Desktop Toolbar Suite and we encourage you to try it out. We’re very excited about the feedback we’re going to get and we look forward to testing that and getting your comments going forward.

I’ll give it back to Adam to close it off.

ADAM SOHN: Just one more time for folks, the press release should be hitting the wire right now, along with some additional information, or you can go get that at Usually it will go up there just a minute or two later.

Again, thank you all for your time and we appreciate you joining us this morning.

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