Rumor Mill: Microsoft Expecting $100M Powerset Acquisition to Save the Day?
VentureBeat kicks things off, by telling us the deal has been done, and the purchase price $100 million.
Microsoft, the software giant flush with billions of dollars in its warchest, has agreed to buy Silicon Valley semantic search engine Powerset, we’ve learned.
The purchase price is rumored to be slightly more than $100 million. An announcement is expected next month.
As if annoyed that VentureBeat might have gotten the scoop, TechCrunch reports the deal is not actually final.
Our sources have been saying this deal is highly likely since May, but hasn’t actually been signed yet and could still be disrupted by the ongoing Microsoft-Yahoo negotiations.
Keep in mind that neither VB or TC have any official confirmation or announcement.
But, let’s assume for a moment that Microsoft has indeed bought Powerset for $100M. That means that despite all of the huffing and puffing by Powerset execs, $100M is all it takes to sell out? Didn’t they just predict “2008 is the year that semantic and linguistic technologies cross over into widespread consumer use”?
$100M is probably the amount of interest Microsoft’s warchest earns in a day, so it’s not a big acquisition for the company. What the price tag does tell us is that perhaps my previous concerns are valid:
- Didn’t Ask.com try natural language search? Didn’t it fail?
- Didn’t Google spend the last 10 years conditioning search engine users to use a handful of keywords–not natural language?
- Isn’t Wikipedia made up of just 2.3 million pages, while Google’s index is likely 40+ billion? Even I could build a search engine that scales to 2.5 million edited and organized web pages.
- If Powerset is licensing its natural language technology from Xerox PARC and its index from Wikipedia, where’s the value? What’s to stop Google or Microsoft from licensing the same technology?
Of course, we’ve not event looked at whether or not Microsoft would even know what to do with Powerset. From my experience, Microsoft doesn’t lack in the technology department, it lacks in the branding and execution department. Powerset doesn’t change that.