Surprise, surprise…Microsoft acquires another search start-up (Powerset)

As everyone knows, Microsoft has publicly stated many times that they are going to be aggressive in their pursuit of Google (with or without Yahoo). They recently announced they are buying Powerset, a “natural language” search engine that recently released its beta product. While the beta product only searched Wikipedia, and the results weren’t any better than Google’s search of Wikipedia, the UI was innovative and they are one step ahead on natural language search which is apparently worth close to $100 million to Microsoft.

After releasing their Beta product, Powerset was at a major decision point of whether to continue to fight the search battle alone or sell to one of the larger search engines. It would have required another $50-$100 million (on top of the $20mm they already raised) to start indexing the entire web themselves and to remain independent. It was certainly a great move to join Microsoft as they have huge incentive and deep pockets to invest heavily in what Powerset started in order to compete with Google. I hope we see Powerset features in live search very soon (they claim some features will roll-out by year end).

Michael Arrington of TechCrunch interviewed the Powerset Founders here.