Microsoft buys internet start-up Powerset for around $100 million

Mumbai: Microsoft Corporation has agreed to buy internet start-up Powerset, that is working on a new class of search that relies on `natural-language search,' rather than simple `keyword' search. The terms of the deal were not disclosed, but analysts estimate it at around $100 million..

Under the deal, Powerset's 53 employees would become part of Microsoft's search relevance team but continue working in the start-ups San Francisco office.

Powerset's `natural-language search,' a form of artificial intelligence that seeks to understand the meaning of both user queries and web pages, will complement existing technology developed by Microsoft Research and help "take search to the next level,'' said Ramez Naam, a Microsoft search executive.

The news of the deal comes less than three weeks after Yahoo rejected a second Microsoft proposal to pay $9 billion in exchange for Yahoo's search business and a 16 per cent equity stake in the software giant.

Redmond, Washington-based Microsoft plans to integrate at least parts of Powerset technology into Microsoft Live Search by the end of the year. Powerset's natural language search technology is a major differentiating factor from top internet search company Google and Microsoft plans to further develop on the Powerset search technology.

Powerset's search technology breaks down the meaning of words into related concepts, freeing users from having to type the exact words they want to find.