According to TechCrunch, Microsoft has "gathered a team of twenty or more 'rock star' developers" to build its "next-generation" search engine. The team will be based in Microsoft's Silicon Valley headquarters, and will be led by Live.com developer Sanaz Ahari.
Arrington's source didn't share any details, other than to say it would not be a vertical search engine, and that it's "very cool."
Microsoft was hoping that its Live Search would help it displace Google's lead, but that hasn't been the case. While the current Live Search results in some cases may be considered "as good as" Google at best, they are rarely considered better. Progress has been made with its "related searches" feature, image search, maps, and with the relevance of ads delivered through its adCenter platform, but the relevance of the core results still needs improvement to make Microsoft a legitimate player in search.
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