Tuesday, 24 June 2008

Microsoft looks elsewhere for acquisitions

Following their failed attempt to buy Yahoo! over the past few months, Microsoft are looking at new ways to develop their online market share and web technology skills through acquisition. Although top executives were quoted in the Financial Times only last week saying that they would not be pursuing a spate of acquisitions - including rumours of Facebook and AOL now being targets - it hasn't taken them long to set their sights elsewhere.

This week Microsoft have announced their purchase of Powerset, a semantic search engine based in Silicon Valley. The news has been widely reported, including by Venture Beat, and the price being paid is over $100m which could be good value for money if the technology can be developed and used to Microsoft's advantage ahead of similar work by Google.

Semantic search is seen to be the next big development within search, whereby the search engine will attempt to understand the searcher's typical requirement based on the search terms being used and so display more relevant results to suit users' needs. Google is working on this technology but may be some way off launching a workable model, so if Microsoft have assessed this new purchase correctly and can take advantage of the specialist skills that come with the company, they could steal a march on Google in the future.

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