VentureBeat is reporting that Microsoft has agreed to buy semantic search engine Powerset for somewhere around $100 million, which is the price we previously reported was being offered to the company.
Our sources have been saying this deal is highly likely since May, but hasn’t actually been signed yet and could still be disrupted by the ongoing Microsoft-Yahoo negotiations. Dave Wehner, a Managing Director at investment bank Allen & Co. (he’s the guy who sold Bebo for $850 million to AOL), is representing Powerset in the deal.
Powerset debuted at TechCrunch40 last fall and opened a showcase of its technology to the public just last month.
Powerset has raised around $12.5 million in venture capital, and is rumored to have taken another $8 million or so in convertible debt as bridge financing.
W0W. What is that based on?
The ability to search Wikipedia off site?
I want 100 million dollars!
If they’d had launched at Demo rather than TechCrunch40, they’d be getting twice that.
Hmm… it does not sounds that bad. What Powerset needs are financial ressources in order to spider the whole internet on which their algorithm could be used. Or eben better – the technology would be integrated into the live.com search, which already has all the infrastructure setup and running.
I wish Microsoft good luck with it, so that Google finally gets some serious competition
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http://www.speed.io – Worldwide DSL speedtest (original since 2003)
If true it’d be based on hiring some top NLP and Search talent. And probably a healthy dose of IP and or patent licenses they have in place.
If they had launched at Plugg, they would have gotten a gazillion trillion dollars. (@Jimmy Dell = idiot)
The war for search dominance is never-ending. Any powerset experts in the crowd. What’s the big strategic advantage (in terms of serach) for microsoft with buying this company? … http://www.read...ex.php?RTA=web2
If that comes together it’d be a sweet quick deal for ever everyone involved.
I am surprised to see that there are still people in the tech community who doubt that live search will trail behind google that much longer.
MS got FAST, next few precise purchases like this one and add the entire goodness of the Live platform with Mesh and all other candy thrown in the mix. Here we go. Office will be web based as well, soon – http://helpcent...com/Videos.aspx
sort of a wrong link, but this should give you an idea http://helpcent...om/samples.aspx
not to mention Bill’s (who remains Chairman indefinitely) appreciation for the Cloud.
Sounds like they may be asking to much.
8x return in roughly 18 months. Again, hats off the Peter Thiel and Founders Fund.
Assuming this deal develops and closes.
8x return? I thought the post-Series A was $45MM? not a bad return for a year regardless I suppose but not 8x.
I hope MS does not do this, if this crap worked, it would not be pointing to just wikipedia.
I think that this is living proof that Microsoft is out of steam.
Here is a very valuable piece of information. This information is worth LOTS of money.
When a big company like Microsoft misses a deal, IE Yahoo. They INSTANTLY come back and buy ANYTHING of interest.
They do this for a number of reasons which are all obvious.
Mark my words.
An easy example of this specifically for MS is when Ba11mer messed up the Red hat/MS distribution deal. He went straight back to Novell to give them the same because they were terminally wounded.
If a big company can’t follow through on a deal, they will instantly buy up something, anything in order to compensate.
This is saying to Yahoo, it’s over. We took the guys in the garage over you. We feel better now.
I think this acquisition of Powerset by MS would go a long way to enabling the semantic web and showing semantic technology’s full potential. I look forward to seeing the next version of Powerset’s development, past searching Wikipedia.
Helped Powerset a couple month’s back in there quest to get a new name and slogan going. They liked my slogan alot, and I appreciated what they gave. Happy to see that they might be getting bought by Microsoft, rather than Google or Yahoo!, because now more than ever they will have the resources to make incredible gains.
This goes really well with the ad Microsoft put in the San Jose Mercury News, as Powerset will join a company with the resources, engineering expertise, R&D, partnerships, and competitive spirit.
NOOOOOOOOOO! Microsoft will screw up Powerset like they do a lot of other things. Google was supposed to buy Powerset. The world is ending!
I think it’s weird to let the cat out of the bag before the deal is signed unless you want to have more bidders come to the party. A lot of times, rumors of a deal are leaked for just this purpose. Microsoft wouldn’t want the word out until the deal is inked, but Powerset would.
I think Powerset is almost out of cash, and they are selling because they don’t see a path to the billions of dollars that a Google killer would be worth. They’ve been happy to let rumors circulate because they want Google to bid them up. But Google isn’t that dumb.
So the real question is if Microsoft has actually closed the deal, or if it’s still just checking them out to see if they have anything of value. I wouldn’t be counting my chickens unless I had the cash in the bank.
Does anyone keep score on tech crunch rumors? There seem to be many misses.
Google search: “site:techcrunch.com rumors acquisition”
Among the results:
Digg to be bought by Yahoo.
Bebo to be bought by Google.
SimplyHired to be bought by Google.
Jotspot by Yahoo.
Bebo to be bought by Yahoo.
Yahoo to buy Facebook. (for $1billion. Ha.)
Google to buy Expedia.
Metacafe by Microsoft.
Salesforce by Google.
Skype by Google.
And probably lots more.
Powerset depends on having structured data. The web is not structured. The site itself is slow.
Microsoft search is also terrible. Their forces combined will be awful. 100 million is great for powerset, bad for microsoft.
Powerset should sink or swim on its own. This is the best thing that could happen for the overall benefit of the web.
There are three conclusions i can draw,
-PowerSet has something really good in stealth. But even if it has nice patents and tech., PS won’t be ready in time to fight Google.
-MS is retarded, and maybe on a tilt? Desperate much?
-Wehner is a jedi and mind controls VC/execs to buy over priced company,
or a combination of the above. This is the most probable.
@Frodar: Who cares about TechCrunch’s record? The original story was broken by VentureBeat and they have been consistently accurate in their stories about Powerset.
@Tom: Powerset does not depend on having structured data. Of course they can do some tricks with structured data, but the basic PARC technology works on unstructured text. The consistent editorial voice of Wikipedia probably helps them somewhat, but they seem to be able to handle fairly arbitrary text.
@ttfn ooooohhh. Touchy are we? Who cares about TechCrunch? Well, this is the TechCrunch web page, so all the people here could be considered TechCrunch readers. Maybe they care.
But why so defensive of the technology? Cash not in the bank yet?
I dont see anything exciting at Powerset. Boring.
Pushes my Valuation through the Roof if the Deal completes.
http://www.PowerLocator.com
“Natural Location Network”.
Killer: You has a valuation?
For Microsoft, $100 million is nothing. It’s like buying a pizza.
I think MSFT is doing the right thing: it needs to bulk up its search (and my old buddy Ballmer agrees with me). How do you do that? You either already have an ace in the bag. Or if you don’t, try out a number of things that have some chance of success:
- bribery/ disruption: eg: paying for search
- UI: quintura, etc.
- new approach: Live tries a bit. Kosmix (www.kosmix.com) and Yahoo Glue are other examples (disclaimer – I work at Kosmix… don’t normally mention my company, but Techcrunch already ran a story on our launch)
- new algos: NLP, semantic web, categorization, yada yada. Powerset didn’t cost MSFT much (for them), has something that can be built on, has a bunch of really smart guys who know Search….. again, I think MSFT is making a good bet.
Will it work? Who knows? But you can’t beat Google unless you try the whole spectrum of things.
Semantic Web insiders, including the CEO of the firm usually considered the leader in the Semantic Web so-called “industry,” has told me that Powerset has nothing unique and that Powerset was on its death bed. More so, this CEO is a close friend of Powerset’s CEO!
I have worked with Barney Pell (not as an employee, so I can flatly state that I’m not a disgruntled employee or former colleague), and he’s a certifiable jackass who is way over his head with Powerset.
If it’s really true that Powerset is on its death bed, Microsoft should wait a while and pick them up at a fire sale price. And they should not include Barney Pell in the package.
Unfortunately, the CEOs of many Semantic Web leaders are assholes, totally unqualified to hold their CEO position. More like Founders with huge egos. There are exceptions to this, but I’d say that as a rule that these Semantic Web company CEOs are a sorry lot.
The end result: Microsoft will be overpaying for something that isn’t such a big deal and if they take Barney Pell as part of the package, they’re even bigger fools.
Sorry Peter Thiel, but Powerset is really a con job with nothing particularly special. Wikipedia: Get real. NLP: Hype. Semantic Web: Can get it elsewhere for a lot cheaper.
Microsoft: Do a little more homework. A lot of what you are seeming from Powerset is coming to market from tools vendors. Consider an acquisition of Powerset equivalent to the acquisition of a tool vendor. At $100 million, that’s about $95 million too much. Do not continue to overpay for crappy investments and acquisitions. Your M&A team needs a spanking.
$100 million is nothing. It’s like buying a pizza.
But it’s a Pizza with Semantics on it.
The Wiki implementation of Powerset seemed weak to me though I only ran a few queries. Google generally seemed to do a better job categorizing Wikipedia semantically than Powerset.
Ergo, congratulations on nabbing $100,000,000.00 for a routine that does what others already are doing better.
eh between 100 million and a 15 billion in the raw. this aint facebook, slide, rockyou, mahalo, linkedin, myspace or any of those single channel wannabe something special sites with alot of money. when people and businesses grow up and want strategic custom placement and location on the internet they are gonna come to the company with the greatest strategic custom vertical niche offerings on the internet.
1300+ Strategic MultiChannel Natural Language Locator Network
any challengers? ya right. im not the only one talking about it. others see the common sense potential
http://www.kill...locator-network
@Frodar: I’m not defending, just correcting. I think Powerset is mainly hype anyway. As interesting as the PARC tech might be, the company is sucking fumes. And 100M is a pretty poor exit for them, given how much money they’ve taken and all at Series A valuation. Don’t you just love liquidation preferences?
I definitely agree that Microsoft is not the same without Bill…I wondered if Microsoft is still the most powerful company in the world? (as, in my opinion, they used to be)
And i took a look at what companies dominate the world and i wondered, who is the most powerful company nowadays?
So i took a ride on google and came across this website which might give me an answer in a month, check it out:
http://www.them...rfulcompany.com
If this is true, then it bodes well for players like Cognition Technologies which appear to have a much more complete semantic technology, they have a commercial offering, and have real customers.
If Microsoft isn’t also talking with Cognition, then perhaps Google will pick them (Cognition) up and discover that they got the real front-runner in semantic search technology.
If you haven’t played with Cognition’s semantic search, check it out at: http://www.cognition.com.
NLP based search (symbolic-type search) has limitations in terms of speed of speed and retrieval relevancy. On the other hand numeric-based search (PageRank, Latent Semantic Indexing, etc…) also have limitations but they’re more superior compared to NLP based search in terms of retrieval precision & recall, ie, numeric-based search performs better. Also the evolution of development in the numeric-based search domain is accelerating while the development in the domain of NLP search it is going at a much slower pace.
Certainly, I have seen researches that attempt to replicate the capability of NLP via numerical algorithm thus achieving the same goal/outcome as the symbolic NLP but taking advantage of the superiority of numeric-based methodologies.
@27: Would you buy a pizza from a company that was currently “pre-toppings”?
It is fascinating to see niche semantic players cry out in desperation in comments: “Buy me, somebody – ANYBODY!” Get over it. Most of the folk mentioned here are science experiments at best.
To those in the semantic space: I think you should be kissing the rings of Hakia and Powerset for creating two businesses of value that you can draft behind.
Funny, I searched Powerset for “who is the powerset founder”, and the only link that was actually returned about the company was titled: “Powerset (company) Luke Nosek, founder of PayPal … ↑ Powerset Founders.”
Luke is not even a founder.
Maybe I’m missing something, but after several searches, I was not able to find any demonstration of value here whatsoever, certainly not in the $100MM range.
@webwatch – I was interested and repeated your exact query, and the picture of each of the three founders and their names was the first thing I saw. What is your game here?
Useless acquisition, surely.. One of the much-hyped search engine but really worthless.
A way too much money for such a site.
If Microsoft would be serious, they would be putting 100 million dollars a side, hire a few of the brightest engineers and give them a quarter million each year. They could replicate powerset in like half a year.
I’m pretty sure they are running out of money. What is their business model? There is none at all. Nobody goes to their site to search through wikipedia anyway. And their technology works on english text only (besides I still think that it’s purely based on filter lists)
This thread is really starting to bore me. How about something beyond the “too much money” theme. I, for one, like celebrating deals like this – it gives us reinforcement that the majors are still buyers and decent prices. The day that stops, epic ritual suicide will follow.
How about ’save your money’ rather than ‘too much’. There is so much hype around a product whose benefits have to be explained rather than be self-evident. I went to the site and asked it a pretty basic question – When did Shakespeare write twelfth night? If it cannot parse that kind of question there is little hope. I did not get a contextually valid response (i.e. what I was looking to know) on the first page of results. I actually got the info I needed from Google and Live. Where’s the improvement over what’s out there?
Powerset’s future is in the deadpool.
Seems like MS is determined to lead the semantic space, search and advertising.
Fasten your seatbelts – the race has begun.
Its an interesting search thought process. It will take some getting use to as we have all been using Googles search process, keyword 1 + keyword2 etc.