Kumo, which is based on technology from Microsoft's Powerset acquisition, has been tested internally for a number of months. The company said that its tests of the search engine "show a number of technologies in development and is a very early internal preview of directions we're exploring".
"We believe it is leading us in the direction of a next generation search engine built to meet customers' unmet needs - an engine that delivers fast, organised and differentiated results that can help people make more informed decisions," Microsoft added.
Kumo is a Japanese word that can be used to mean 'cloud', 'ceiling' or 'sea spider', among other things, according to an online Japanese-to-English translation service.
It is expected to replace Microsoft's Live Search product and will be an attempt at catching up with Google in the search engine market. It is thought the search engine will be unveiled at the 'D: All Things Digital', which takes place in San Diego next week.
Microsoft has yet respond to a request for comment.
Whois.Net reported earlier this year that Microsoft had registered the kumo.com domain, and through CSC, a company that manages domain names for corporations, also registered related domains that indicate the Kumo name could be used for other services. Those domains include: www.kumosearch.com, www.kumopics.com, www.kumowiki.com, www.kumogroups.com and www.kumotravel.com.
The Windows Live and Live Search brands are fairly new in and of themselves. Microsoft only gave its online services the 'Windows Live' moniker at the end of 2005, later dropping the 'Windows' for its search engine but keeping it for other services and web-based client applications.
Despite hundreds of millions of investment in its search strategy, Microsoft still remains a very distant third behind Google and Yahoo in search-engine usage and advertising revenue.