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Microsoft President Resigns as more key MSN search engineers jump ship to Google.

Software giant Microsoft Corp. tweaked its organizational structure once again last week. The company president and chief operating officer Rick Belluzzo was forced to resign as more key Microsoft engineers fled to Google.

Belluzzo was unable to stop the flow of senior Microsoft engineers leaving for Googleplex. The fact that many of the engineers also took proprietary code with them to Google.

Microsoft is fighting many of the resignations trying to enforce non-compete clauses with federal lawsuits against he ex-employees and Google.

Microsoft has been in talks with America Online in recent months and Bill Gates and Steve Ballmer were not pleased with the lingering AOL talks and that many of Microsoft's books were exposed in negotiations with AOL.

Micorsoft has always been very protective over its business processes to date and Belluzzo was not providing enough protection to critical company systems as negotiations with AOL took place.

Many in the industry feel this latest move is more evidence that Microsoft is waffling and has not clearly defined their company direction for the coming years.

How will Microsoft address keyword search the second most popular online activity? The new MSN search engine has not been popular with internet users is not meeting consumer demands. MSN has been unable to substantially increase their share of the $16 Billion dollar keyword search market in recent months.

The article below is a great summary of MSN's intention to shore up their keyword search weaknesses and begin to make more in-roads on Google's market share.

Bill Gates and MSN Focus on Google

Bill Gates and MSN Focus on Google
Clash of the Titans, The War for internet user share reaching new heights

CARLSBAD, Calif. - Don’t be fooled by all the speeches about global health and high school education. Bill Gates is still, first and foremost, about clobbering Microsoft Corp.’s competition. And his current obsession is Google Inc.
"Google is still, you know, perfect," he told the crowd of technology executives attending The Wall Street Journal’s third annual conference on "All Things Digital." "The bubble is still floating. They can do everything. You should buy their stock at any price."

The world’s richest man said those words with a wry irony that suggested ridicule of the Google craze, but also resentment. There may be hot air in Google’s highflying stock price ($260 Wednesday on the Nasdaq Stock Market), but Gates clearly takes the company seriously. "We had a 10-year period like that," he said, equating Google’s current standing in the computer world to that of Microsoft from 1986 to 1996.

To underscore the point, Gates touted Microsoft’s new "Virtual Earth" project - a service starting this year that uses aerial photographs and satellite images to enhance local-area searches on the Web. The service looked surprisingly similar to Google’s "Keyhole," which was on display in the next room.

Gates also demonstrated how Microsoft will allow users to construct their own search home page - an almost identical service to the one Google announced last week. And he highlighted Microsoft’s new tool for searching files on your computer - also similar to a Google tool.

Gates’ fear is that the increasingly ubiquitous Google search will become everyone’s gateway into the digital world - a role he has always fought to preserve for Microsoft’s Windows operating system. The search is an elegant starting point - after all, why go anywhere before you have indicated what you are looking for? And Google has proved it is also a lucrative one, enabling the company to match advertisers with the specific interests of customers. As a result, Microsoft is determined to get into the game. "If anything touches on search," Gates said, "we’re going to do it."

That is why the biggest laugh of the conference came when Gates and Google chief executive Eric Schmidt appeared together onstage for the Computer Bowl quiz game with T-shirts that read "Same Team." These guys are definitely not on the same team.

For his part, Schmidt finds Gates’ focus - and the media’s fascination - on the industry’s competitive dynamics to be more than a little annoying.

"Come on. This is crazy," he said to me, after I pushed him on the point. "Google is part of the information industry, and that industry is very large, and Google is a very small part of that industry." Moreover, he added, "it’s not a zero-sum game." True enough.

A veteran of both Sun Microsystems Inc. and Novell Inc., Schmidt knows what it is like to be in the cross hairs of Gates’ competitive attention. "It’s the norm," he said, shrugging his shoulders. But it doesn’t mean he has to play the same game. "Google is not Microsoft, and I’m not Bill Gates."

Like John D. Rockefeller, Gates has taken his enormous wealth and turned it to good causes. Unlike Rockefeller, he isn’t giving up the chase. He is the nerd-turned-winner, still resentful of the cool guys in the class. When Apple Computer Inc.’s Steve Jobs spoke on Sunday evening, the audience’s questions were reverential softballs, even though his company’s business hangs on the ephemeral success of a tiny music player. When Gates spoke on Monday morning, as the unchallenged titan of the industry, every question asked of him had a decided edge.

Bill Gates may be curing diseases around the world. He may be tackling what he considers the most pressing public problem facing the United States. But for many people in this crowd, he was the same old Bill, seething with competitive intensity, copying ideas and smothering the competition.

Give Gates a few bonus points, though, for being a good sport. The oddest event at the D conference was a spoof of the quirky film "Napoleon Dynamite," in which the listless Napoleon - Jon Heder - teams up with the Fifty Billion Dollar Man to save his family’s business.

On screen, Gates looked about as uncomfortable as he did when testifying for his company’s antitrust trial. But he plays along - swiping Napoleon’s Tater Tots off his plate and donning a pair of Rollerblades to be pulled behind Napoleon’s bicycle. Perhaps he has mellowed a bit with age.