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Microsoft will show some improvements to its Live Search product at a company-sponsored advertising conference later this month.

Chairman Bill Gates said in comments to reporters in Japan Wednesday:

We will start to show you the next version of the search.

Microsoft have some exciting things up its sleeve hoping to take back some ground from Google in online search and advertising.

The update is expected to include new types of vertical search and improvements in overall relevance of search queries, according to a source familiar with the company’s plans.

More importantly, Microsoft is expected to add to the shopping-specific search tools that debuted in its Fall 2007 release. Microsoft has also been working on a new look for its Live Search product, which went live this week.

Microsoft has been number three in search, accounting for 9.4 percent of core U.S. search queries in February, according to ComScore. Google, held a 59.8 percent share, while Yahoo was second, with 21.3 percent. The company has struggled to make headway in search, especially in the area of being the place that consumers go for general Web queries.

Many of Microsoft’s recent changes have centered around improving specific types of searches, such as image search, celebrity tracking, and medical searches. The company is also focusing a good deal of energy on trying to build “search experiences” into its various Web products.

Windows Live General Manager Brian Hall reiterated that’s Microsoft’s approach in a speech to investors on Tuesday. Hall echoed an oft-repeated line that search can be a lot better than 10 blue links, particularly if it is integrated into the task people are doing when they make the queries.

He said:

We think we can do a lot more to drive contextual search. We see a lot of opportunity to push the envelope there.

In his comments in Japan, Gates pointed out that although Google has a high market share in search, it is also the kind of area in which Microsoft can use marketing to get people to try out its products, in due course.

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