Official: Microsoft Buys Powerset

Consistent with the rumors last week, Microsoft confirmed today that it has acquired Powerset for an undisclosed amount (speculation put it at around $100 million). The company was reportedly valued at just over $40 million. It appears that Microsoft was motivated to acquire Powerset as much or more by the team as it was any of the search technology. Danny provided his initial impressions of Powerset when the site came out of private beta.

According to the Live Search Blog:

We’re buying Powerset first and foremost because we’re impressed with the people there. Powerset CTO and cofounder Barney Pell is a visionary and incredible evangelist. When he introduced our senior engineers to some of the most senior people at Powerset — Search engineers and computational linguists like Tim Converse, Chad Walters, Scott Prevost, Lorenzo Thione, and Ron Kaplan — we came away impressed by their smarts, their experience, their passion for search, and a shared vision.

That shared vision is to take Search to the next level by adding understanding of the intent and meaning behind the words in searches and webpages.

I also got a demo of Powerset and came away impressed with some of its capabilities and interface innovations. Still, it was going to be hard for Powerset to take what it had created for Wikipedia — a kind of massive proof of concept — and scale that to the entire Internet. Microsoft, perhaps uniquely, is in a potential position to do that.

The acquisition was logical and makes sense for both parties. The immediate press question is: “Is this going to be a game changer for Microsoft and allow them to gain in search?” The answer is it entirely depends on how Microsoft integrates and scales what it has acquired. It would also do well to adopt some of the interface features that Powerset has developed.

Despite Google’s market share dominance, search itself still has a long way to go and there’s plenty of room for improvement in understanding user intent.

The Powerset blog provides some additional information.