Microsoft has launched MSN research labs aimed at rapidly developing and deploying internet technologies. The efforts are part of the software company's strategy to be more agile in its creation of web-based services to compete with rivals such as Google and Yahoo.

Microsoft introduced the efforts – Live Labs and Search Labs – on Wednesday at its Search Champs meeting in Redmond, Washington, according to Adam Sohn, a company spokesman for Microsoft's MSN division. Search Champs is an event to solicit feedback from industry experts and pundits, including prominent bloggers, on some of Microsoft's newest technology.

Live Labs will fall under the jurisdiction of Gary Flake, a Microsoft technical fellow who joined the company from Yahoo in June 2005. Search Labs will be run by Ashok Chandra, an industry researcher and academic who joined Microsoft a few weeks ago.

Live Labs, which will be a group effort of researchers located around the world, will be focused on applied research of technologies such as multimedia search, distributed computing and data mining, Sohn said. The point of Live Labs is to get prototypes and new products developed as quickly as possible if the research reveals they will give the company or customers a competitive advantage, he said.

"If someone comes up with a super-hot idea, we’ll have a bunch of researchers and developers who can take those ideas, get them prototyped and see if there's a real, healthy business there," Sohn said.

Search Labs will focus exclusively on developing and incubating new search technologies. Focus areas for this team will include personalisation and socialisation, improved user experience and user privacy.

Microsoft is currently competing with internet service companies such as Google and Yahoo to win over online users with web-based content and services that can be accessed by various devices. These services generate advertising revenue and other financial opportunities through deals with major content providers.

Google in particular has been churning out new internet-based services in rapid succession, with a host of new offerings such as Google Video and Google Pack, as well as the first launch of its search service in China, all introduced in the past month.

Sohn said that while Microsoft's MSN has not been "sitting around twiddling our thumbs" when it comes to developing internet-based services, the company does want to speed up the development and deployment of cutting-edge services on the web. "It makes absolute sense for us to deeply focus research efforts in this area to be more agile and accelerate the development work we’re doing," he said.

While Google and Yahoo both started as internet-based companies, Microsoft comes from a tradition of packaged software, which is by its nature a slower business than the web. Even in that realm, Microsoft has never been known as particularly speedy; the company typically has anywhere from two- to five-year product cycles for its packaged software.

To ensure Live Labs research is in line with company product and strategy goals, a group of Microsoft's chief technologists will serve as an advisory board for the effort, Sohn said. Those executives include Microsoft chief technical officer (CTO) Ray Ozzie, Craig Mundie, CTO of advanced strategies and policy, and David Vaskevitch, CTO of business platforms.

Through Live Labs, Microsoft is also supporting the academic research community at large, Sohn claimed. The company expects to do much of the labs' work in the open and will present papers on research at academic conferences, he said.

In addition, the company has set up opportunities for grants through Live Labs. Microsoft will make a total of $500,000 (about £280,000) in research money available through the effort, and interested parties can submit proposals to Microsoft for grants, which will be allocated in $35,000 to $50,000 (£20,000 to £28,000) increments, until 24 March. Microsoft will announce the awards on 17 May.