Thursday, July 10, 2008

MSFT’s acquisition of Powerset is not about search

The recent $100 million acquisition of Powerset,
the semantic search engine company, by Microsoft looks to be more to do
with advertising than beefing up the software giants’ search

So far, Powerset has only demonstrated its technology against
Wikipedia. It’s a neat exhibit but it is highly computer intensive. You
would need a massive amount of computer power to run that semantic
search technology across the entire Internet.

Also, how many searches would benefit from a semantic component? Not many. Most searches are fairly direct in my experience.

Where Powerset’s technology could prove its usefulness is in
contextual advertising. That’s a much smaller semantic problem to
handle, and it is a semantic problem that would result in the largest

The reason Yahoo is outsourcing some of its advertising to Google is
that GOOG is better at contextual advertising in than Yahoo. GOOG can
monetise those searches better than anybody else–at least for now.

If Microsoft can improve contextual advertising then maybe it can
win that type of business from Yahoo and others. If advertisers through
MSFT get better conversions than through Google then Microsoft wins,

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