Confirmed: Microsoft buys search startup Powerset

Powerset, a search startup whose technology attempts to understand the full meaning of phrases — not just keywords, as Google does — has officially sold to Microsoft, the two companies announced today.

While terms are not being disclosed, VentureBeat founder Matt Marshall reported that the deal is worth north of $100 million when he broke the story last week. As Marshall noted at the time:

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By buying Powerset, Microsoft is hoping to close the perceived quality gap with Google’s search engine. The move comes as Microsoft CEO Steve Ballmer continues to argue that improving search is Microsoft’s most important task. Microsoft’s market share in search has steadily declined, dropping further and further behind first-place Google and second place Yahoo.

You can read more of our analysis on the Powerset-Microsoft deal here.

Powerset has recently published an official blog post on the deal, and so has Microsoft.

And here’s a Powerset-produced video with some more detail on how its search technology works:

Powerset Demo Video from officialpowerset on Vimeo.