Foremski's Take: MSFT Powerset Aquisition is not about Search
By Tom Foremski - July 4, 2008
Foremski's Take:
Microsoft's [MSFT] acquisition of Powerset, the semantic search company, has been widely interpreted as being about beefing up MSFT's search capabilities. But how many searches require a semantic feature? Not that many, which is why Powerset chose Wikipedia as a test for its technology.
If I were to acquire Powerset it would be to use it to improve contextual advertising -- that's where a semantic technology can make a big difference. That's the value for Microsoft.
Yahoo is outsourcing search to GOOG for one reason only--it can provide better contextual advertising. That's where Powerset's technology can provide a big boost for Microsoft and where Yahoo and others can benefit. I'm surprised Google didn't step in to block MSFT, even if it believes it has a better semantic technology. After all, $100m is just a pawn in this chess game.
Either way this is a good deal for Powerset because its technology can be scaled across a global platform. It would take Powerset a decade or more to be able to leverage its technology against the same scale as Microsoft can provide today.
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Please see related stories:
Search Engine Powerset Debuts Semantic Search/Navigation
Fun With Powerset: An Epidemic Of Thyroid Conditions in Silicon Valley. . . And My Ambulatory Hallucinations
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Comments (2)
Tom, I'm not questioning whether you're right, but only that if you are, Microsoft would have been better off with Peer39.
Posted: July 4, 2008 1:17 AM
Tom, I think you are absolutely right. Although I have never heard bpell talk in these terms publicly. have you? I always thought the takeout plan was to get bought out by Yahoo! to save them from their contextual advertising problems, but obviously they have other things on their mind now.
Posted: July 17, 2008 4:02 PM