SAN JOSE, Calif. Microsoft may have been willing to spend years developing Vista, the long-delayed upgrade of its Windows operating system, but when Bill Gates was presented with a plan for finally beating Google in Internet search technology, he gave the engineers just 100 days.

"Full-speed ahead," Gates told Stephen Lawler, the leader of the just-formed Virtual Earth team. The team met Gates' first deadline, as well as other equally punishing milestones in the two years that followed.

But the effort has yet to pay off. Indeed, the harder the coders from Redmond race after the crew from Mountain View, the more Google seems to pull ahead.

During the past year, Microsoft introduced a slew of online offerings. In addition to the widely praised Virtual Earth, an exact 3-D representation of major cities, there were three new search services, a new portal, online video, classified ads, mobile e-mail and social networking. And perhaps most importantly, there was new adCenter software released in May that was supposed to help Microsoft make more money from its online offerings.

The result: The number of visitors to Microsoft's sites has not budged, while the amount of time they have spent there has dropped. Advertising sales have fallen. Meanwhile Google's traffic and advertising have continued to surge.

Microsoft executives say they are taking the long view. "We feel like we have the right services in place, the right team in place to be successful, but it is super early in this entire space," said Adam Sohn, director of global sales and marketing for online services.

Official optimism aside, the early results have been grim.

According to comScore Media Metrix, the total unique audience that visited Microsoft's U.S. Web sites in December 2006 was roughly 117 million, unchanged from the previous year. Google is fast catching up, with its number of unique visitors up 21 percent to 113 million.

Microsoft's page views, an approximation of how long visitors spend at its sites, was down 12 percent in December to 18 billion, according to the research firm. Google's page views were up 90 percent to 13 billion.

Microsoft has steadily lost ground in search, despite developing its own search engine in 2004. As of November, Microsoft's share of Internet searches has fallen to 8 percent. Two years ago, when MSN search was released in beta, Microsoft share's of U.S. searches stood at 14 percent, according to Nielsen//NetRatings.

Microsoft's Internet slide is reflected in its online sales. During the quarter ended Sept. 30, sales for the online business unit were $539 million, down 5 percent in a year. Google, in cruel comparison, reported revenue of $2.69 billion, an increase of 70 percent.

"Google is the next Microsoft because Microsoft is the next IBM," said Stephen Arnold, a technology consultant and author of "The Google Legacy." "Just as Microsoft superseded IBM, Google is superseding Microsoft."

Google's executives have avoided crowing over Microsoft's misfortunes. But in a recent article that he wrote for the Economist magazine, Google Chief Executive Eric Schmidt predicted that open Web-based standards would "sweep aside the proprietary protocols promoted by individual companies striving for technical monopoly" in 2007.

"The past few years have taught us that business models based on controlling consumers or content don't work," Schmidt wrote.

Microsoft Chief Executive Steve Ballmer and Chairman Bill Gates continue to tout Microsoft's ability to innovate, citing new features in core franchises like the operating system and software applications as well as in gaming.

"For Microsoft, this year, it's a big, big milestone, because the products we've been working on for many years that are foundational products are now moving into the marketplace," Gates said during his keynote speech at the Consumer Electronics Show this month in Las Vegas.

As Gates spoke, a Microsoft employee demonstrated Virtual Earth as an example of the type of Microsoft innovation the company is pursuing. Using an Xbox controller, the employee flew through a 3-D replica of Las Vegas projected on screen.

"This is pretty fun. It's also practical," said Justin Hutchinson, who ran the demo during Gates' talk. "If I'm new to town, I can get a sense of where everything is."

But even people who praised the product wondered if it might exceed the needs of the average person. "It seems like for most people's practical purposes, 2-D driving directions with a richness of detail is what they are looking for today," said Walter Pritchard, an analyst at Cowen and Co.

Steve Berkowitz, former chief executive of Ask.com who was hired by Microsoft in April to turn around its online business, told the Mercury News that the company needed to focus more on what consumers want and less on whizbang technology.

"It's very much around the idea of moving the mindset," said Berkowitz, who is credited with reviving Ask after the company imploded along with the dot-com bubble. "The technology is the enabler, and the experience is what you have to focus on."

Berkowitz's carefully couched criticism is echoed by search marketing experts who are struggling to use Microsoft's new advertising software.

Sherry Mao, search marketing manager at Coremetrics, a San Mateo company that helps other businesses manage and measure online advertising campaigns, said her retail clients were enjoying conversion rates on Microsoft's adCenter that were as much as five times better than conversion rates on Google.

But Mao said Microsoft's system was so cumbersome that it could take hours to create a campaign that took only minutes to launch on Google. "It's a very manual process and it's extremely time-consuming," she said.

Still, Mao said Microsoft impressed the Coremetrics staff by offering to fly down and talk to them about improving the software.

But even better software won't help without better traffic numbers in Microsoft's battle with Google.

"We have to reach critical mass," Berkowitz said.

In addition to hiring Berkowitz, Microsoft has taken other dramatic steps to correct the course of its online business.

In June it elevated an outsider, Ray Ozzie, the creator of IBM's Lotus Notes, to the post of chief software architecta role formerly held by Gates. Ozzie has advocated the idea of "Live Services," or software that will function as an Internet-based operating system that outside developers can use to build applications, much like they used Windows in the past.

Microsoft has even changed the way it writes software, adopting agile programming methods, which emphasize small teams and shippable products over lengthy planning processes. "We got rapid-fire development down pretty well," Sohn said.

In brand new areas, like mobile devices that connect to the Internet, Microsoft is holding its own against Google. According to Telephia, a research firm, 3.7 percent of U.S. mobile subscribers are visiting Microsoft's mobile Web sites, compared to 3.5 percent for Google.

But even in this area, Microsoft is still No. 2. Kanishka Agarwal, vice president of mobile content for Telephia, said Yahoo is No. 1 with 5.9 percent of subscribers due to the popularity of Yahoo mail.

The key thing that Microsoft is missing, said Allen Weiner, a veteran tech analyst with Gartner, is the single point of focus that was once embodied by Gates. Gates turned over the CEO post to Ballmer in January 2000 but remained deeply engaged as Microsoft's chief software architect until June.

The gradual withdrawal of Microsoft's infamous micro-manager has showed up in a sometimes-puzzling lack of integration of the company's products, Weiner said. For example, its Zune multimedia player wasn't initially loaded with videos from its Soapbox service. Its system for sending instant messages on the Xbox is not connected to its IM program for PCs.

Microsoft said it is working to stitch all its technology together to give users of its software one simple and powerful experience.

"The idea of connected experiences can go way beyond what we've got this year," Gates said in his speech last week. "We can take these incredible improvements in the hardware, we can take the new type of content that's even being designed for interactivity, we can take this powerful software ... we can take that and go to a new level."

"Don't underestimate Microsoft," Weiner added.