The company’s new search portal boasts several new features, including updated image and local search, related search and an updated user interface. Live Search also will now power its MSN media and entertainment search portal.

That means users can search for video, images, news, blogs, RSS and other online information through a single search portal.

The upshot is Microsoft leveling the search playing field and providing serious competition for the industry’s current frontrunners, Google and Yahoo, said Info-Tech Research Group.

Microsoft has recognized there are billions of dollars in ad revenue available for viable search engine marketers and they want a piece of that pie, said Carmi Levy, senior research analyst at Info-Tech. Organizations using Google’s AdWords to manage campaigns should compare that service against Microsoft’s new offering.

Google’s AdWords has to this point been the leader in the targeted click-based advertising market, Levy added. Microsoft’s updated search portal could be the first of such announcements from major search players including Yahoo, Levy said.

When Microsoft launched Live Search beta last March, it said it was working toward integrating its various platforms into a single Live service.

The launch of Live Search is a significant milestone for our services business, with our core search and monetization platform ready for prime time for MSN and Windows Live as well as for partners through syndication deals, said Microsoft VP of Search Live Christopher Payne, in a statement. We now have the base to weave search through our services in ways that bring value to customers. This is just the beginning.

Perhaps the most notable new feature of the official Live Search is its cleaned-up user interface, which has less clutter than its beta and a new scope bar that enables users to see Web, images, local maps, videos and other search results without having to re-enter the query in the search box.

The interface also includes a related search link, which lets users refine some queries and promises shorter queries for users. Related searches may also help Microsoft fine tune its search results by having a better understanding of what people are really looking for when searching a broader subject.

Image search also has been revamped and is now powered by Microsoft’s internal algorithms rather than PicSearch’s. It includes dynamic image resizing and meta data surfacing when users hover over an image, as well as a scratch pad to park images.

The new local search was taken out of beta only in the US and UK. It includes people searching, map drawing and various Birds Eye imagery features, which can be pushed to a mobile device.

Microsoft also debuted some new beta features for Live Search, including Live QnA, which lets users connect to a person through Live Messenger and Windows Live Spaces if the search portal doesn’t answer their questions. Another new beta is video search.