December 10, 2004 2:20 PM PST

Search companies vie for the desktop

By Stefanie Olsen
Staff Writer, CNET News

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All the major Web portals seem to be rushing delivery on one product this holiday: desktop search software.

Microsoft plans to introduce a test version of its desktop search application in the coming days, meeting its stated deadline. The company on Friday said it will hold a press conference Monday to announce a new MSN service. Ask Jeeves will debut its software Wednesday. And although America Online has not publicly stated any plans for desktop search, the company reportedly began testing related software this week in partnership with Copernic.

The Microsoft news comes on the heels of Yahoo's Thursday announcement that it plans to release a test version of desktop software in early January. Yahoo's free software, licensed from X1 Technologies, will help people search the contents of their hard drive for music, e-mail, photos and more than 225 file types.

Meanwhile, Google has about a two-month lead on others in the field.

Desktop search is a sought-after prize by all these players because it could be the key to locking in visitors and ensuring their loyalty. Technology that helps people easily find personal files on the PC, as well as search the Web and Internet applications, could help any one of the best providers ingratiate itself with consumers and overtake Google as the leading search company. For all of the search providers, the desktop could eventually be a lucrative venue for distributing personalized and targeted ads.

"It's a battle for consolidation and control of eyeballs," said David Burns, CEO of Copernic, a maker of desktop search applications.

Burns would not comment on a deal with AOL. His company is currently in the process of being acquired by publicly traded meta-search engine Mamma.com.

Microsoft is seen as the biggest threat because it plans to perfect Internet, PC and application search within the Windows operating system update, Longhorn, which is expected in 2006. For now, it has turned its focus to a desktop search application to fend off rivals in this arena. Analysts and industry executives say that with the software giant's distribution and financial muscle, the application could take a bite out of Google and others' business.

"Microsoft is definitely working on this from the operating system, so you can search your extended intranet," Charlene Li, a Forrester Research analyst, said.