Microsoft is buying Fast Search & Transfer, a Norwegian company, for $1.2 billion. Ostensibly, this is meant to bolster the search function within Microsoft's Office business. But I read it as an admission that Microsoft's multibillion-dollar annual R&D budget can't buy it a fighting chance against Google. Microsoft keeps spending more on "improving" its search technology, and yet consumers are indifferent; they continue to switch to Google in droves.
Hitwise reports that Google's share of U.S. searches hit 66 percent in December, a record high. That's up 3 perentage points from the previous year, a time in which Microsoft dropped from 10 percent to 7 percent of the market. Improving search within Office may be a worthy goal. But Microsoft could make both customers and shareholders happy by meeting that goal more cheaply: A Google search box built into Office 14, anyone?