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Google Unhappy About New Microsoft Browser's Search Default

Google Inc. (GOOG) is hoping to pressure Microsoft Corp. (MSFT) into changing a new Internet Explorer browser feature that could direct more people to Microsoft's online search engine instead of Google's far more popular offering.

Google has informally complained to U.S. and European antitrust regulators about what it says are biased settings on Microsoft's latest Web browser, marking the latest spat between two companies whose business models are increasingly bumping up against one another.

Mountain View, Calif.-based Google regards Microsoft as the biggest threat to its continued success, and Microsoft has conceded that Google is a formidable competitor as well.

The next version of Internet Explorer, available now in test form, includes a box in the corner that lets people perform an Internet search without going to a separate Web page, much like what's available from Google's downloadable "toolbar."

Users who download IE 7 will be assigned a search engine preference based on the AutoSearch function from the previous version of IE, which is likely to be MSN Search.

Google says it's concerned that Microsoft's own search engine is getting favored treatment, and said research it has sponsored shows that it's difficult to change the settings in the new browser to a rival search engine.

"The market favors open choice for search, and companies should compete for users based on their quality of search services," Marissa Mayer, Google's vice president of search products and user experience, said Monday.

Gary Schare, director of product management for Internet Explorer, said Redmond-based Microsoft's goal is to let users choose the search engine they want. He also said Microsoft's feedback has shown that it's not difficult to change to a different search engine.

"MSN has a certain amount of [market] share. This is not designed to change this," Schare said. "This is designed to essentially keep the status quo."

Internet Explorer's main competitors, Firefox and Opera, both include similar boxes with the default search engine set to Google, although users can change to another provider.

Google said it has talked about the browser feature with the U.S. Department of Justice and European Union regulators, although it has not filed any formal complaints.

Microsoft fought a long-running antitrust case with the Justice Department, and is awaiting a ruling on its appeal of an EU antitrust ruling against it.

In both cases, competitors claimed that the company was using the dominance of its Windows operating system to wield influence over other markets, squelching competition.

IE 7 will ship with the next version of Microsoft's Windows operating system, and also will be available for free download.

Analyst Rob Enderle said he thinks Google's complaints signal that the company is getting more aggressive in its competition against Microsoft, although he doesn't think the search box poses any serious threat to Google's business.

He added that Google's move was interesting in that, while Microsoft dominates the computer operating system market, Google is the dominant search engine provider.

Nielsen/Net Ratings reported that Google had 49 percent of the U.S. search market share in March, compared with nearly 11 percent for Microsoft's MSN Search.

"Once you start raising unfairness questions, and you're the dominant player, then it would be very easy for somebody to use those arguments against you," Enderle said.