Confirmed: Microsoft buys search startup Powerset

July 1, 2008 | Eric Eldon | Comments | |

Powerset, a search startup whose technology attempts to understand the full meaning of phrases — not just keywords, as Google does — has officially sold to Microsoft, the two companies announced today.

While terms are not being disclosed, VentureBeat founder Matt Marshall reported that the deal is worth north of $100 million when he broke the story last week. As Marshall noted at the time:

By buying Powerset, Microsoft is hoping to close the perceived quality gap with Google’s search engine. The move comes as Microsoft CEO Steve Ballmer continues to argue that improving search is Microsoft’s most important task. Microsoft’s market share in search has steadily declined, dropping further and further behind first-place Google and second place Yahoo.

You can read more of our analysis on the Powerset-Microsoft deal here.

Powerset has recently published an official blog post on the deal, and so has Microsoft.

And here’s a Powerset-produced video with some more detail on how its search technology works:


Powerset Demo Video from officialpowerset on Vimeo.

Next Story: Gnip launches to make cross-site data sharing more efficient
Previous Story: New MMO games startup, Meteor Games, to target youth demographic

Bookmark and Share

Photo of Eric Eldon

About the Author, Eric Eldon

Eric currently covers digital media technology and business news, especially what's happening on social networks and their platforms. He also writes and edits stories about venture capital, and lots of other stuff, too. He started at VentureBeat in the spring of 2007, half a year or so after Matt Marshall left his reporting job at the San Jose Mercury News to found the site. Eric previously cofounded a startup called Writewith, that was building editorial software for newspapers and other groups of writers. The startup didn't work out, but he learned a lot.

  • Abdul
    I think this a very good strategic move by Microsoft. I don't see why they get so obsessed with this Yahoo deal to the point of forgetting that they have their destiny in their own hands. I beleive that search is still in its infancy and that there is more to be discover than what Google has to offer at present. So wise up MSFT, and put your thinking cap on and may be you can come up with that elusiive semantic search engine: Searching For The Next Search Engine (http://www.internetevolution.com/author.asp?sec...)
  • Either me or you
    Now Microsoft looks really desperate to me. Who would buy a hype machine whose technology is fully dependent on PARC and FreeBase. They should have bought Freebase itself and hakia. Although that could cost them at least 5x more. hakia is not so innovative in terms of UI and is really poor in marketing itself, but at least, they own the technology they showcase and they were already better than Powerset in my tries.

    Also what about that European enterprise semantic search company they've bought last year. Microsoft should have already been into semantic search.

    I hope they'll be able to keep Powerset team dedicated. They are really good at marketing themselves and that could be a value for Microsoft, otherwise $100M goes to the garbage.
  • Kevin L.
    This is another desperate move by MSFT to try to catch up with Google in search. Everyone knows that it’s not just how good your alogorithms are — it’s about market share, and Google has a lock on that.

    MSFT needs a game-changer to get ahead. They should be focusing on commerical semantic applications of internet advertising which Google doesn’t have yet — and launch as a leader.
  • edhardy622
    British law student sues Abercrombie-Fitch for disability discrimination.
    http://www.abercrombieonsale.co.uk