Microsoft scraps book-scanning plan

Microsoft Corp. is abandoning its effort to scan whole libraries and make their contents searchable, a sign it may be getting choosier about the fights it will pick with Google Inc.

The world's largest software maker is under pressure to show it has a coherent strategy for turning around its unprofitable online business after its bid for Yahoo Inc., last valued at $47.5 billion US, collapsed earlier in May.

Digitizing books and archiving academic journals no longer fits with the company's plan for its search operation, wrote Satya Nadella, senior vice-president of Microsoft's search and advertising group, in a blog post on May 23.

Microsoft will take down two separate sites for searching the contents of books and academic journals next week, and Live Search will direct web surfers looking for books to non-Microsoft sites, the company said.

Nadella said Microsoft will focus on "verticals with high commercial intent."

"We believe the next generation of search is about the development of an underlying, sustainable business model for the search engine, consumer and content partner," Nadella wrote.

At an advertising confab at Microsoft's headquarters in Redmond, Wash., headquarters, he demonstrated a new system that rewards customers with cash rebates for using Live Search to find and buy items on advertisers' sites.

Microsoft entered the book-scanning business in 2005 by contributing material to the Open Content Alliance, an industry group conceived by the Internet Archive and Yahoo. In 2006, it unveiled its competing MSN book search site.

Unlike Google, whose decision to scan books still protected under copyright law has provoked multiple lawsuits, Microsoft stuck to scanning books with the permission of publishers or that were firmly in the public domain.

The company said it will give publishers digital copies of the 750,000 books and 80 million journal articles it has amassed.

Microsoft's search engine is a distant third behind Google's and Yahoo's, in terms of the number of queries performed each month, despite the company's many attempts to emulate Google's innovative search features and create some of its own.

Microsoft as much as said its search strategy wasn't working when it offered in February to buy Yahoo to boost its search and advertising. Talks between the companies collapsed because Yahoo executives sought more money.

The company's ceding the book-search segment to Google and the Yahoo-led Open Content Alliance could signal Microsoft has a new search strategy and is ready to jettison its unsuccessful me-too efforts.

However, the software maker has not given up on combining its search operations with Yahoo's. The two companies are said to be talking about a more limited deal.