Right — I would analyze this differently. Microsoft has *clearly* arrested a long-term (+54 months) slide in marketshare. Nobody expected Microsoft to speedily gain share once Live Search was released. This is the floor for Microsoft to build back from. It’ll happen slowly…but, I think, surely.

Well, it’s obvious by now that other people aren’t going to change. Live Search isn’t doing enough. Why:

1. It’s not compelling enough – Have they done something different with search? I could think a ton of ways that search can be done better, and even be innovative, but Live Search hasn’t really done that type of stuff. Until they actually do something that will make people actually interested, they’ve got nothing for other people.
2. No good advertising – The ads they do kind of suck. They brag about what basically any search engine could do. And I’ve only seen web ads. Putting them on the web isn’t good enough. Barely anyone looks at them. It’s spyware to most people. TV ads and product placement are the way to go. Look at Apple. Even then, Live Seach isn’t still compelling to get them to stick.
3. They’re not really doing anything big. Some cool stuff, but not enough. Unless there’s something groundbreaking, nobody’s moving towards it. People are just lazy to bother with another search engine. Most people are going to stick to Google, because it works. Just like Yahoo! search works, and Live Search works. People stick with what they started with. Unless it’s something groundbreaking, it’s not changing.

So if they can’t address the 3 problems, they’re going nowhere.

I agree, Live Search needs something really, really, really big if they want to make any serious headway. Nice little touches, like “Related Searches” or whatever, are going to convince basically nobody. Even what Ask.com is doing, all their ads and everything, is not going to convince many people.

What Google Maps did, with AJAX and satellite imagery, was enough to make a lot of people switch from Mapquest or Yahoo! or whatever. What they did with Gmail, with AJAX and labels and conversations and such, was enough to make a lot of people switch from Hotmail or Yahoo! or whatever. What Microsoft is doing with Live just isn’t enough.

On top of that, they don’t have a strong brand identity. Nobody knows what Live is–sometimes, it seems, not even Microsoft. Maybe it would have been better to just stick with MSN…

And like vipwoody said, speed is always an issue.

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That said, at least they’re outperforming all other Google competitors. :) And if searches grew, and their market share held steady, then that still means Live Search is growing–just not relative to the market as a whole.

But still, they need something HUGE.