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Microsoft rumored to be buying Powerset

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The rumors have been on again, off again for months that Microsoft plans to buy San Francisco search engine Powerset for $100 million or more.

Now VentureBeat says the rumor will become a fait accompli next month as the software giant locked in combat over search snaps up the semantic, or natural language, search engine. TechCrunch says a deal may not happen if Microsoft swings a search partnership deal with Yahoo, which has turned spurning the Redmond, Wash., company into a worldwide rubber-necking event.

Microsoft and Powerset both declined to comment. Powerset is best known to L.A. Times readers for its employees’ facial hair (above).

Microsoft, with its giant warchest, certainly could afford Powerset. The start-up raised $12.5 million in a financing round from Foundation Capital and Founders Fund in 2006, valuing the company at $42.5 million.

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Powerset specializes in natural language search. Basically it tries to understand the underlying meaning of the phrases you enter so it can deliver more relevant results. The technology has taken a long time to develop. And, in general, it’s a tough and expensive trick to pull off. Which may be why a Microsoft buyout is in the works.

Wonder what Google thinks of that?

Reminds me of ...

... ‘Ode to Powerset,’ the poem penned by Foundation Capital’s Charles Moldow for the splashy funding party that the search start-up held at San Francisco restaurant Frisson (in which Founders Fund’s Peter Thiel is an investor):

Early Web was directory. We’d drill down to stuff

For finding anything was truly quite tough Then search came along, Inktomi and Magellan Powered the Web, we were all in heaven Jerry and Dave created Yahoo and harnessed the power They created a portal, from whence the Web flowered Infoseek, Lycos, Excite were the ‘Me too’ But although they tried, they could not come through Then along came a promise of a butler named Jeeves When asked a quick question, he promised to please But the answers were lame, quite random, bizarre When asked ‘who shot Lincoln?’ he replied: ‘It’s a car.’ So Yahoo had won, hand out Super Bowl rings Till Larry and Sergey reminded ‘the show’s not over until the fat lady sings.’ With better search using link graph analysis Google gave the other search engines a sudden paralysis We all got trained to speak keywordease HBO, Sopranos, Bada bing, Strip tease Once again pundits have proclaimed the search game is done Then along comes Powerset with technology to stun They’ve aimed their sights high, at the 800-pound giant They are up to the challenge, Barney and team are defiant The winner will be crowned when I ask Google a question And it’s only reply is, ‘Go ask Powerset, that’s my best suggestion.’

-- Jessica Guynn


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