Of all the post-Google search engine startups, Powerset was touted as the most likely Google-killer. We waited with bated breath, we rubbered our necks around to get a better glimpse—early reports were stellar, yes this was the one to take on Google and. . .Wait, what?
Sold to Microsoft. $100 million? Wait, what?
A Google-killer’s worth more than that right? How many billions is Microsoft still thinking about shelling out for Yahoo’s search engine alone, which ran neck and neck with Google for exactly five minutes? And heck, that wasn’t always even because of difference in relevance. Studies came out saying Yahoo’s and Google’s results were pretty much identical—it was that Google brand that couldn’t be overcome.
If a plucky upstart could possibly outdo Google and establish a killer brand, isn’t that worth more than $100 million? Why the swift sellout?
The hard-nose skeptic throws that proboscis in the air and intakes the sharp smell of bovine repast…all hype, no delivery. But still, $100 million is a good payday for Barney Pell, and Microsoft doesn’t make a habit of bidding on search engines unless they’re Yahoo stature—Steve Ballmer’s need to fill his Internet hole aside. So what’s in it for both of them?
Don Dodge, Director of Business Development for Microsoft’s Emerging Business Team, blogs that Powerset didn’t have much choice but to sell to somebody with much deeper pockets. The technology was powerful, even game-changing, operating not on the query side but on the contextual indexing side—a search engine that can read and understand, basically. . .or not so basically.
And not so cheap in money, memory, infrastructure, or scaling, either. Things as they are, Om Malik reports, Powerset takes about a full second for every sentence indexed. That’s not fast enough to index the continuous exponential growth of sentences on the Internet—How many sentences, you think, have been born since you started this article?
“As you can imagine this is a huge scaling problem, that has been impossible to solve economically until now,” writes Dodge. “With Moore’s Law applied to constantly reducing the cost of computing, storage, and bandwidth, it is now possible to solve this problem, although it is still very expensive.”
And who has lots of money? Big Daddy Microsoft, that’s who. Who has a burning desire to kick the effing ess out of Google? Same Who. Who didn’t have the money to make that happen and was stuck in neutral until they found it?
Yeah, Powerset.
Microsoft likes Powerset for other reasons, too. Dodge outlines what the technology could do for enterprise search and targeted advertising, both multi-billion dollar markets, and vertical search as well.
It’s hard to feel sorry for somebody walking away with nine digits worth of Microsoft’s money—ah, tropical wishes and Ferrari dreams—but you do get the feeling he got the short end of the same stick Ballmer tried to poke Yahoo with. Gotta hand it to Mr. Softy for those leverage buyouts.
