Setting its sights on matching Internet search giants Google and Yahoo!, Microsoft is founding research centres by making half a million dollars available in the form of grant and award schemes. Microsoft Search Labs and Live Labs will attempt to make Microsoft the number one in search. Dr Gary Flake, a researcher Microsoft hired last year from Yahoo!, will look after Live Labs, with respected academic Dr Ashok Chandra as general manager. The labs will focus on areas such as multimedia search, machine learning, distributed computing and data mining.

"Live Labs is a fantastic alliance between some of the best engineering and scientific talent in the world. It will be the pre-eminent applied research laboratory for Internet technologies," Flake said. "This is a very exciting opportunity for researchers and technologists to have an immediate impact on the next evolution of Microsoft's Internet products and services and will help unify our customers' digital world so they can easily find information, pursue their interests and enrich their lives."