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Rumor Mill: Microsoft Expecting $100M...

By: Andy Beal

...Powerset Acquisition to Save the Day? Just six weeks after its coming out parade, natural language search engine Powerset is the subject...

...of two rumors about its acquisition by Microsoft.

VentureBeat kicks things off, by telling us the deal has been done, and the purchase price $100 million.

"Microsoft, the software giant flush with billions of dollars in its warchest, has agreed to buy Silicon Valley semantic search engine Powerset, weve learned."

"The purchase price is rumored to be slightly more than $100 million. An announcement is expected next month."

As if annoyed that VentureBeat might have gotten the scoop, TechCrunch reports the deal is not actually final.

"Our sources have been saying this deal is highly likely since May, but hasnt actually been signed yet and could still be disrupted by the ongoing Microsoft-Yahoo negotiations."

Keep in mind that neither VB or TC have any official confirmation or announcement.

But, lets assume for a moment that Microsoft has indeed bought Powerset for $100M. That means that despite all of the huffing and puffing by Powerset execs, $100M is all it takes to sell out? Didnt they just predict 2008 is the year that semantic and linguistic technologies cross over into widespread consumer use?

$100M is probably the amount of interest Microsofts warchest earns in a day, so its not a big acquisition for the company. What the price tag does tell us is that perhaps my previous concerns are valid:

1. Didnt try natural language search? Didnt it fail?
2. Didnt Google spend the last 10 years conditioning search engine users to use a handful of keywords"not natural language?
3. Isnt Wikipedia made up of just 2.3 million pages, while Googles index is likely 40+ billion? Even I could build a search engine that scales to 2.5 million edited and organized web pages.
4. If Powerset is licensing its natural language technology from Xerox PARC and its index from Wikipedia, wheres the value? Whats to stop Google or Microsoft from licensing the same technology?

Of course, weve not event looked at whether or not Microsoft would even know what to do with Powerset. From my experience, Microsoft doesnt lack in the technology department, it lacks in the branding and execution department. Powerset doesnt change that.


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About the Author:
Andy Beal is an internet marketing consultant and considered one of the world's most respected and interactive search engine marketing experts. Andy has worked with many Fortune 1000 companies such as Motorola, CitiFinancial, Lowes, Alaska Air, DeWALT, NBC and Experian.

You can read his internet marketing blog at Marketing Pilgrim and reach him at [email protected].

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