Seattle, Apr 03: Microsoft Corp is devoting more money to improving internet search capabilities on its MSN web site, leading some to speculate MSN plans to take over the lucrative functions now handled by its partner overture services inc. The money-losing msn unit, which runs the MSN.com internet portal, provides web browsing software and offers internet access, is increasing its research and development spending to improve web searching, said Bob Visse, MSN's Marketing Director. But some believe Microsoft will eventually develop its own service that charges companies fees for placing them near or at the top of a search in relevant categories. Microsoft currently contracts with overture to provide these so-called "paid search listings."

"This is par for the course for Microsoft," said Michael Gartenberg, research director for Jupiter research. "Microsoft does not love partnerships where it has to pay out money," he said.

"Even as Microsoft is relying on other parties to deliver services, in many cases it is also looking internally at how can it replace those external parties." Shares of overture slid USD 1.74, or 11.4 per cent, to USD 13.49 in trading on the Nasdaq stock market yesterday, after Soundview analyst Jordan Rohan released the report about MSN's plans. Shares rose 6 cents in after-hours trading. Microsoft Shares Rose USD 1.37, or 5.6 per cent, to USD 25.72 on the Nasdaq.

Visse denied that the company plans to end its partnership with overture, based in Pasadena, California. Bureau Report