Search Market Share query volume for Microsoft Live jumped 67% in June 07 (over May 07) and is 48% greater than last year, according to Compete.com -June Search Market Share: Big Surprise from MSN. 

I don't think this news is a big deal yet and here's why:

First, using other sources of Search Market Share information like Comscore, there's a history of Microsoft seeming to gain and then suddenly losing Search Market Share. In fact comScore used to be one of the main places you'd go, using qSearch, to find out about Search Market Share (but now Compete.com provides much of the same type of data, often better and more frequently). 

Somehow, Microsoft gaining on Google sounds familiar… in fact, in 2005 AdWeek reported almost the identical headline that Compete gives today: MSN Gains Market Share.

"…NEW YORK Microsoft's MSN has begun to pick up search market share from industry leader Google, according to an Internet measurement firm.

Nielsen/NetRatings reported that MSN attracted more searchers in February. The New York research firm said MSN's search market share jumped from 12.8 percent in January to 14.2 percent last month. "

And then a month or so later, Microsoft search share went back down again, according to MarketingVox:

"..Despite the work it's put into the search market, Microsoft has actually lost market share last month, reports ZDNet.

Search market share for Microsoft dropped to just nine percent in April, down from 10.1 percent in March. Google saw its market share rise from 53.7 to 55.2 percent. Yahoo remained stable, rising only slightly to 21.9 percent from 21.8."

Compete's Steve Willis says "Google finally has a competitor join it in the (until now) exclusive, positive-year-over-year-growth club. MSN/Live increased their query volume by 67% from May, and 48% from a year ago. Search volume was up all across the board in June and took most everyone else in the same direction".

It looks like MSN/Live took a big chunk of it's Search Share gain from Google, according to the chart above.

But if ….

"..A good portion of the additional Live searches are coming from the Live Search Club, where you can apparently play games for points which you can redeem for fine Microsoft products."

…then the gain, if real, is probably not sustainable.