Microsoft has acquired (after vehemently denying) Powerset, a San Francisco-based search and natural language company (see the Live Search Blog and Powerset Blog for more details).
Between Microsoft's $1.2 Billion acquisition of FAST earlier this year, their $240 million investment in Facebook to provide ad serving capabilities, the $6 Billion acquisition of aQuantive's ad network last year, and the (currently undisclosed but rumored at $100 Million) acquisition of Powerset, Microsoft is finally clueing in that it's not enough to provide tools/platforms/systems to create and store information - if it's not FINDABLE, it doesn't exist. In fact, in our upcoming Market IQ on Findability, one of our findings was that 69% of respondents stated that less than 50% (half) of their content was even available online. That is a completely different problem when compared to the web, which has millions to billions of pages at your disposal.
What does the Powerset acquisition bring to the Microsoft table?
Thought #1 (it’s about ads):
The primary driver of the Powerset acquisition is part of the play to compete against Google for consumer-based web search, rather than their acquisition of FAST, which is more “enterprise focused” and the area that most AIIM Members would typically be concerned with.
Microsoft is competing of course not simply from a “our search engine is better” standpoint, even though this is exactly the "elevator pitch" that Powerset has been using since they first unveiled themselves.
The point of the competition between Microsoft and Google is that there is money in advertising on the web. Lots of it. Metric tons of it. And who wouldn't want more?
So the goal for Microsoft with this acquisition is not really about giving the world better web search, but rather a “we can make our advertisers (and thus ourselves) much more money.”
I have to say that I am dubious that this will be the case.
The best online ads that surround the search experience are typically very targeted, and when done well, lead buyers to landing pages and an entire experience that is keyed in on the original query quite specifically. It creates and solidifies a path from the mind of the searcher, straight to a purchase path. This is "Modern eMarketing 101" (or should be).
Given the complexity involved in targeting ads CURRENTLY (without semantic/linguistic technology involved), how is this going to make advertisers more effective at selling?
Powerset/Microsoft had better innovate one heck of an advertiser/marketer friendly interface to actually make this work. While Microsoft may have some of the most popular user interfaces (by sales) on the planet, they do not have a great track record at simplifying the user experience (open every toolbar available in Microsoft Word, and you will no longer have space to create a document). This is not a simple task.
Thought #2 (it’s about better search – ha!):
From a “pure” search experience, people can barely be bothered to enter more than 1-3 search terms – what would make us think that users are going to type in fully formed questions as a query? I’ve joked about this many times in the last decade that Natural Language Query is at this point possibly the most UNnatural search experience possible. It would SEEM easier to allow people to “ask questions” of machines, but ingrained habits are terribly difficult to overcome, and the vast majority of interfaces that people are using for search do NOT train us to ask pointed questions of search engines (as The Atlantic’s recent cover story [by Nicholas Carr of "Does IT Matter?" fame] says, “Is Google Making Us Stoopid?”).
That is not to say that linguistics/semantics technology cannot be useful. Although there are certainly benefits, is this the silver bullet that Microsoft can aim in the direction of Google to take back or win ad revenue? Not by itself. Then again, Microsoft has been busy with all sorts of acquisitions to take this quite seriously (as mentioned above).
The other competitive front that is being mentioned around this
acquisition is that it is not about competing with Google, but instead with Ask.com. Given that Ask.com is indeed built for natural language queries, that may make more sense, although Ask.com does not have anywhere near the mindshare of Google, MSN or Yahoo! Microsoft can of course afford to compete on multiple fronts however, and they certainly are spending quite heavily on improving search. Time will tell how users end up benefiting.
So lets sum it up as saying that of all the acquisitions or investments (such as into Facebook) that Microsoft has made in the consumer-facing, public web search market - as interesting as the techniques that Powerset uses are (Semantic Web, where art thou? Not here yet?) - this is much ado about nothing. It is a tiny blip - one small, subtle capability that is going to take quite some time (if ever) to make a significant impact on this aspect of the Microsoft search business. The benefits of this type of approach, and the fabled "Semantic Web" have been talked about for a LONG time.
If only the same amount of investment and energy went into making enterprise Findability a reality, which we’re finding in our Market IQ on Findability is NOT the case, then the working world of “knowledge workers” would be a near utopian dream. And it’s not. Reality is much messier, and the problem isn't just technology. But more on that in the Market IQ, soon.
Other resources on this topic:
Microsoft Shoots and Scores with Powerset Purchase by Ron Miller
Cruising the Mall: Microsoft Scoops up Powerset for Universal Search by John Blossom
Report: Microsoft to Acquire Powerset Natural Language Search for $100M+ by Adam Ostrow
Method Or Madness? by Sean Park
