Matt Marshall over at VentureBeat says he has it on good authority that Microsoft is planning to make an offer for Powerset, the “semantic search” startup that has been in stealth mode for quite awhile now, popping up only long enough for a party or two, and recently poked its head out with a small-scale demo of its technology as a Wikipedia search engine. The rumoured dollar value for this deal? $100-million. If true, that would be a hell of a payday for something that hasn’t really shown much in the way of spectacular results so far, and is based at least in part on 30-year-old technology that the company licensed from Xerox’s PARC labs. TechCrunch says the deal could still be derailed by the Microsoft-Yahoo mess.

Of course, for a company like Microsoft, $100-million is chicken feed — Bill and Steve find that kind of money stuffed under the couch cushions when they vacuum the Microsoft HQ. And the idea of an acquisition has been around before, with rumours floating here and there. It’s a painfully well-known fact that Microsoft’s search is a distant third place to Google and Yahoo, which is one of the main reasons the software behemoth continues its on-again, off-again (currently on-again) pursuit of Yahoo’s search business. If it could use Powerset to add natural-language search tools to its arsenal, that might help to close the gap with Google — although as Danny Sullivan has noted many times, we’ve been around this particular racetrack many times before.

About the author

Mathew 2430 posts

I'm a Toronto-based senior writer with Fortune magazine, and my favorite things to write about are social technology, media and the evolution of online behavior

4 Responses to “Powerset: a Hail Mary pass for MSFT?”
  1. Now this is genuinely interesting, and potentially bigger than all the Yahoo blah. Microsoft needs winners to blast itself into areas that it has not produced value, and that would certainly include search. The semantic web does not get any play except amongst ultra geeks, and so it is high risk, but if you are going to make a bet Powerset is the one to nail down now.

  2. Powerset is not a pump and dump like so many of the social networks. They have taken the technology to a large scale proof-of-concept that now need serious financing to take to fully commercial operation. Value is not all about how many eyeballs are on a site today, but how many can be on the site in the next few years.

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