The software giant said MSN Search had more than 32 million unique users in the United States, compared to Yahoo Search's 29 million users.
Yahoo, however, refutes the claim, saying the numbers come from a custom report the software giant asked a third-party research firm to create. Yahoo added that a lot of MSN Search queries are "involuntary." Those searches are prompted by people who type a misspelled or nonexistent domain name into the address bar of Internet Explorer and are automatically redirected to Microsoft's search engine, a feature the software giant quietly added to its browser in September.
"Every time you type in a wrong URL, Internet Explorer takes you to an MSN URL, and they are counting those clicks," said Anke Audenaert, Yahoo's director of global market research.
MSN, however, said it is not counting those searches and is relying on data compiled by Jupiter Media Metrix, a traffic measurement firm. By surpassing Yahoo, the software giant said it is demonstrating its growth and reach with more people taking advantage of MSN Search.
"It's not our number; it's Jupiter Media Metrix numbers," said Sarah Lefko, lead product manager at MSN, adding that many companies use data from such third-party research firms.
Stephen Kim, senior vice president of Jupiter Media Metrix, said companies sometimes use a requested piece of data from his company to compare themselves against a rival. The research firm confirmed that the latest figures from Microsoft come from a custom category defined by the software giant.
Yahoo said it uses traffic numbers from Nielsen/NetRatings because that research firm measures more countries than Jupiter Media Metrix. Nielsen/NetRatings covers 29 countries; Jupiter Media Metrix gathers results from 13 nations.
Still, some analysts say raw traffic numbers have become less important as investors focus on profits amid an economic slowdown. Microsoft's ranking announcement comes a day after Yahoo released its third-quarter earnings. The company reported that its revenues had fallen to $166.1 million and said it may lay off additional employees. Microsoft is scheduled to report earnings Oct. 18.
"Most portals were built around directory and search, but it's no longer key," said David Card, an analyst at Jupiter Media Metrix. "Reach is bogus. Time spent on the site is what is most important."