Here's Bill Gates in a BBC News article on the future of Microsoft:
The head of the software giant told the BBC that its ambition is to be bigger than Google in search.
He said that competition had ultimately been good for web users because it had pushed search technology. This meant search would be "far better" in a year.
Hmm. Maybe. Google has been around since 1998. Since then, Google has steadily added new types of searches -- Google Groups, Google Images, Google News, and so on. I'm sure they've updated and improved their underlying code. But I don't anticipate a major advance in the next year.
I think the search wars are over. eBay owns online auctions. There might be room on the fringes to compete in specialty areas, but no one is going to out Beanie eBay. Similary, there is room to compete with google on the fringes -- until Blog Search, Technorati was kicking Google's blog searching ass. But Technorati was never a threat to searching the broader web.
I'm sure Microsoft will make an unfair play at web searching. Sometime in 2006 Internet Explorer, Outlook, Word -- heck, even Age of Empires 3 -- will probably take you to the Microsoft search page whenever you type in "google.com". Microsoft has done well competing on a level playing field, but they are very good at leveraging their operating system dominance and ability to lose massive amounts of money to break into new markets.
I think the search wars are over. eBay owns online auctions.
I think the Google/eBay analogy doesn't work. The cost of a seller switching from eBay to another auction is millions of potential buyers. For buyers, it pays to look to eBay, since it has by far the most sellers.
The cost to switch search sites is essentially nil. Years ago I swore by Altavista's search, but once Google appeared, I dropped Altavista almost overnight.
I don't know that Microsoft will be the ones to overthrow Google, but it seems pretty plausible that somebody will.
I think you're right on the cost of switching. If you look at what Microsoft has now, it's Google, but a little prettier.
Google was a lot better than Alta Vista, or Yahoo! search, or Lycos, or any of the other pre-Google engines. I just can't imagine MSN Search being that much better than Google.