Todd Bishop at the Seattle PI has one of the best write-ups I have seen so far. Some excerpts:
"Google is so synonymous with Web search," said analyst Greg Sterling of Sterling Market Intelligence ... "You really have to offer something that's quite different and seemingly better to get people off of their habitual behavior."I think both of these points are correct. Google is synonymous with search, so Live.com has to be either substantially better or well differentiated to get people actively to switch.
One way the company may gain ground is by creating links to Windows Live Search from its various products and online services, analysts said. But rivals and antitrust regulators also want to make sure Microsoft doesn't use the dominant position of its Windows operating system and Internet Explorer to unfairly advantage its search engine.
However, Microsoft has their control of the desktop to leverage. In particular, they have the default home page and search (MSN/Live.com) on the default browser (IE) on the default operating system (Windows). They also have control of the dominant office suite (MS Office) and mail clients (MS Outlook & MS Outlook Express).
It is a damning indictment of MSN that such a remarkable number of people go through the effort of switching those defaults to Google or Yahoo when they get a new computer.
As people buy new computers, if Live.com can get to a level where it is perceived as "good enough", more people may lazily stick with the Microsoft default. Because of their control of the desktop, good enough may be good enough for Microsoft.
See also my October 2005 post, "Don Dodge on Altavista and the search war".