• CNet, Tuesday, April 14, 2009 11:30 AM

If you're looking for a microcosm of Microsoft's search problems, look no further than within the company's own walls. An unnamed Microsoft employee tells CNet's Ina Fried that at a company meeting about a year ago, he or she heard that four-fifths of Microsoft's own search traffic was going to Google. "We are still fighting that battle," the worker said. But perhaps this internal battle is one that Microsoft is winning: in February, Fried says that Live Search and Google had a roughly equal share among Microsoft's full-time U.S. workers (around 48% each), with little to no search traffic going to Yahoo or any of the other search players.

According to SVP Yusuf Mehdi, Microsoft has won internal support for specific products, most notably its Live Search Cashback features, which gives searchers a rebate on specific products purchased through its search engine. "I think some of that is predicated on us talking broadly about some great experiences and promoting it heavily, which is something I think we are going to do soon," Mehdi said.

The latest monthly statistics from Nielson Online, released Friday, indicate that the road forward for Microsoft's search team will be a daunting one, indeed: Microsoft had just a 10.3% share of the U.S. market, compared with 64.2% for Google and 15.8% for Yahoo. Now, the company is hoping that its next search release, codenamed Kumo, will prompt more people to give Microsoft another chance.

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