Silicon Valley based search engine startup Powerset has mostly been closed lipped about their product. This makes sense given that they are gunning for the fastest growing Internet company in history, Google. But their excitement over an exclusive deal to license PARC search technology was too much to hold in - the company made what looks to be an exclusive announcement through VentureBeat today about the arrangement.

Powerset argues that the key to killing Google is in natural language search. We discussed this in detail in an earlier post about the company. While other search engines tend to ignore common words in search queries (words like “by”, “for”, “about”, “of”, and “in”), Powerset focuses on those words to try to determine meaning and context. Read CEO Barney Pell’s post about the natural search problem to get an idea of what they’re talking about. To get right to the point: Google treats the queries “book for children,” “book by children,” and “book about children” as equivalent to “book children.” Powerset, however, promises to serve results that are relevant to each query.

There are a lot of critics of Powerset, who note for starters that Google will treat each of the above queries differently if user simply put them in quotations. Search engine expert Danny Sullivan took the Powerset idea apart piece by piece in a long article last year, saying “natural language search makes a compelling pitch for those who really don’t know search or haven’t heard the natural language mantra before.” Search experts we’ve talked with about Powerset agree to varying degrees - the problem is very, very hard to solve. And users have largely learned to simply change the way they search to get what they are looking for.

It’s impossible to judge Powerset before we actually see the product. They are, however, trying to solve a very difficult problem for which there may or may not be not much of a market (at least compared to simple, 2-3 word searches). And Google has “several teams focused on natural language and dozens of Googlers with a PhD in the field, including myself,” says Peter Norvig, Director of Research, Google. If we start to see some of those PhDs leave Google and join Powerset, that will be the first sign that the company is really on to something big.

Powerset is well funded, having raised $12.5 million from Foundation Capital, the Founders Fund and individuals, and boasts a $60 million plus valuation. Matt Marshall, author of VentureBeat, is clearly impressed after having seen a demo of the product - so much so that he’s largely become a cheerleader for the company. This is one product I’m looking forward to seeing, and hopefully they’ll return our emails soon. Maybe we’ll join the squad, too.