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It's official: Microsoft acquires Powerset

As expected, Microsoft scoops up semantic search startup Powerset. It's not Yahoo search, but it brings in some compelling technology.

As expected (see previous reports), Microsoft scooped up Powerset to buttress its search efforts.

Barney Pell, Powerset co-founder and CTO Dan Farber

It's not a replacement for increasing market share by acquiring Yahoo Search, but it gives Microsoft some differentiated search technology and top engineers for less than $100 million. Ramez Naam, group program manager of Live Search, said the Powersoft negotiations happened in parallel with the Yahoo talks over the last few months. Google and Yahoo may also have been interested in Powerset, but no one is talking.

Whether Microsoft can leapfrog Google over the long term with this semantic engine remains to be seen.

Powerset had done a good job of creating a rich semantic layer on top of Wikipedia, but bringing natural language and slick semantic-based interfaces to the entire Web is a long-term and very costly endeavor.

"With an existing search infrastructure, incredible capital resources, unlimited data, a leading search team, and clear mission to revolutionize the search landscape, Microsoft can rapidly accelerate our progress in building semantic search technology and bringing it to full Web scale," Powerset's Mark Johnson said in a blog post about the acquisition.

Powerset can provide direct answers to queries from its Wikipedia and Freebase index and highlight the most relevant search results based on the meaning of the query.

According to ablog post from Satya Nadella, Microsoft's senior vice president of Search, Portal, and Advertising, Powerset's engineers will join the Search Relevance team and remain in San Francisco.

Back to the leapfrogging Google question. Much of what Powerset has enabled with its technology is a superior user experience for searching. Powerset's Wikipedia search, which surfaces concepts, meanings, and relationships (like subject, verbs, and objects in a language), is the very small tip of the iceberg.

If Microsoft can succeed in extending Powerset's technology to key parts of the Web corpus, Google will have to figure out a way to match the quality and user experience. And, there is little doubt that if Google decided that what Powerset and Microsoft are doing as one is important, the company dedicated to dominating search through its engineering prowess will circle the wagons.

A few months ago, Powerset co-founder and CTO Barney Pell told me that his start-up company's software was a first step in changing the way users search and consume Web content. "It's a complete shift. You see this and you want to experience all content in this way. And, as an introduction, it will drive huge investment in semantic and linguistic technology, just as investments were made in information retrieval and scalable databases in the past," he said.

During a conversation after the announcement, Pell told me, "Natural language search will be the center of innovation for the next 20 years." It will likely take 20 years to engineer the semantic, natural language Web that Tim Berners-Lee envisioned in his 2001 essay in Scientific American.