Microsoft Buys Powerset Search Engine

As rumored last week, Microsoft has acquired Powerset, a much-hyped semantic search engine startup. No official word on deal price, but it's rumored to be about $100 million. Why would Microsoft bet on Powerset? More from Peter Kafka's June 26 piece:

What are semantic search engines, and why does Silicon Valley love them? Semantic search, or "natural language" search, is supposed to divine searchers' intentions more accurately than today's standard offerings -- which means Google. And creating a search engine that works better than Google would have obvious benefits for whoever figures it out. Hence Hakia, Twine, etc.

We've been skeptical about the ability of semantic search to deliver results that are significantly better than Google's, and think that Google does a very fine job of figuring out what we're looking for. But we had previously assigned a value of $80 million to Powerset, predicated primarily on the idea that someone who wanted to take on Google would find the company attractive. Now that looks like a reasonable hunch.

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