New Plan: “Reset Default Search” Roofie Cocktails …

In the past year, Microsoft has spent $1.2 billion to acquire enterprise search outfit Fast Search & Transfer. The company spent more than $100 million on Powerset and its natural language search. And it spent untold millions on search-related R&D. Microsoft (MSFT) has even taken the rather extraordinary step of paying people to use its MSN/Windows Live search (“The Search That Pays You Back!”).

None of this has helped. None of it has bolstered Microsoft’s laggard search service, which continues to toddle along behind Google (GOOG) and Yahoo (YHOO)–a very distant third in the search market. In fact, MSN/Windows Live seems to be suffering from the company’s efforts. According to Nielsen Online’s MegaView search ranking for July, searches on MSN/Windows Live declined 2 percent month-over-month and 10 percent year-over-year. Its July 2008 share of the search market: 11.9 percent. Meanwhile, Google gained a share point from June to July, claiming 60 percent of the eight billion searches conducted during the month. And it posted 16 percent year-over-year growth, more than five times the overall growth in search.

Clearly, Microsoft’s efforts to draw users to MSN/Windows Live has yet to make much of a difference in the search share race. Nor have the efforts of other companies. Searches on Yahoo dropped 11 percent year-over-year, leaving the company with a 17.4 percent market share. AOL’s (TWX) fell 9 percent over the year, leaving it with 4.6 percent market share. And Ask.com’s (IAC) rose 13 percent, leaving it with 2 percent share, Nielsen said.