Microsoft Corp. made an announcement to buy San Francisco search company Powerset on Tuesday. Redmond-based Microsoft (NASDAQ: MSFT) didn’t give a price, but media reports it is around $100 million. Powerset focuses on “natural-language search,” a form of artificial intelligence that seeks to understand the meaning of both user queries and Web pages.

Semantic or natural-language search relies on sentence structure, syntax, dictionaries, and thesauri to extract meaning from text, rather than relying on how heavily Web pages are linked to one another to determine the relevance of search results.

Barney Pell, one of Powerset’s co-founders, said joining Microsoft would give Powerset the scale it needs to extend its technology to the entire Web. Powerset’s approach to search requires enormous computing power.

“We know today that roughly a third of searches don’t get answered on the first search and first click.  The reason is that today’s search engines don’t understand when similar concepts, like “shrub” and “tree,” are expressed in different words or phrases. In addition, some results can appear to be more relevant to computers than they actually are to humans. Powerset will help us address all of those problems and opportunities,”  Satya Nadella, Microsoft’s senior vice president for search, product and advertising, wrote in a blog post today.

Still, it’s mostly an huge battle for Microsoft. The latest worldwide market share numbers from Web statistics firm Net Applications have Google with 78.35 percent of searchers in June, followed by Yahoo at 11.78 percent. In comparison, the combined share of Microsoft’s MSN Search and Live Search in the same time period totaled a mere 5.22 percent.

Source: Bizjournals

Yahoo Inc. is offering free e-mail accounts under two new designations in an effort to attract Web surfers unhappy with their current addresses.

The Sunnyvale-based company expects to begin registering new addresses under the domains of “ymail” and “rocketmail” around noon PDT Thursday at http://mail.yahoo.com.

Because “yourname@yahoo.com” is likely taken by now, a lot of people must resort to unpleasant and hard-to-remember addresses such as “yourname1988@yahoo.com.” Yahoo wants to give people a new chance with a name they like.

Yahoo is clearly hoping the new domains will boost traffic and targeting opportunities for advertisers. Making sure that people sign up for Yahoo Mail is “foundational” for the company’s goal of becoming the “starting point” for the most Internet users, said John Kremer, vice president of Yahoo Mail.

With 266 million worldwide users in April, Yahoo is the e-mail market leader, according to the latest data from research firm comScore Inc. Microsoft Corp., which unsuccessfully tried to buy Yahoo for $47.5 billion, is a close second at 264 million users.

Source: AP

Yahoo said Thursday that under the new Google pact, it will display some ads sold by its rival in a deal Yahoo estimated would generate $800 million in annual revenue.

A Google co-founder, Sergey Brin, said in an interview that the company was happy to have Yahoo as an advertising partner but refused to discuss Google’s expected financial gain from the deal.

Yahoo will control how Google’s ads are displayed alongside its own advertising. The pact is sure to face regulatory scrutiny. The companies agreed to delay its implementation for up to three-and-a-half months to allow a Justice Department review.

“This is not a merger. Rather, we are merely providing access to our advertising technology to Yahoo! through our AdSense program.– This does not remove a competitor from the playing field. Yahoo! will remain in the business of search and content advertising, which gives the company a continued incentive to keep improving and innovating,” said Omid Kordestani, Google’s SVP of Global Sales and Business Development in a blog post.

Under the agreement, Yahoo can run ads supplied by Google alongside its own search results and on some of its websites in the United States and Canada. Each placement will be a mini-auction run by Yahoo in which Yahoo and Google bid to sell the ad.

Sanford C. Bernstein analyst Jeffrey Lindsay said that could add as much as $5 per share to Yahoo’s value, which he currently pegs at $25 per share.

Source: The Wall Street Journal

As per IDC report, Internet advertising will grow about 3.5 times as fast as advertising overall over the next five years. IDC also said the Internet in US will go from the No. 5 advertising medium all the way to No. 2 in just five years, making it bigger than newspapers, cable TV and broadcast TV, and second only to direct marketing.

From now until 2012, Internet advertising will grow about three-and-a-half times as fast as advertising at large, and IDC said it thinks overall Internet advertising revenue will double from $25.5 billion in 2007 to $51.1 billion in 2012.

Search advertising will continue to generate the most revenue over the forecast period in the United States, IDC said. This means that for any media company, search must remain a key part of its strategy for attracting ad dollars, despite Google’s current dominance of the market, the analyst firm said. Google has about a 70% share of the search advertising market.

“What will also drive this trend is that consumers are starting to realize that, as opposed to TV, Internet video lets them watch what they want, when they want, and increasingly also where they want,” Karsten Weide, IDC’s program director for digital media and entertainment, said in a statement.

With highly optimistic reports like these about the expected continued growth in online ad spending, the sense of urgency likely grows among companies like Microsoft, AOL and Yahoo, all of which have so far failed to capitalize as much their investors and executives have expected on online advertising’s growth in recent years.

Source: InformationWeek

Microsoft plans to shut down the Live Search Books and Live Search Academic Web sites and stop scanning library and copyright books. Microsoft entered the book-scanning business in 2005 by contributing material to the Open Content Alliance, an industry group conceived by the Internet Archive and Yahoo. In 2006, it unveiled its competing MSN book search site.

“Based on our experience, we foresee that the best way for a search engine to make book content available will be by crawling content repositories created by book publishers and libraries,” Satya Nadella, senior vice president of search, portal and advertising for Microsoft, wrote in a blog post .

Microsoft has scanned 750,000 books and indexed 80 million journal articles during the life of the projects, he said. That material will still be available in Live search results, but not through separate indexes. Microsoft will take down two separate sites for searching the contents of books and academic journals next week, and Live Search will direct Web surfers looking for books to non-Microsoft sites, the company said.

Microsoft’s decision also leaves the Internet Archive, the nonprofit digital archive that was paid by Microsoft to scan books, looking for new sources of support. Several major libraries said that they had chosen to work with the Internet Archive rather than with Google, because of restrictions Google placed on the use of the new digital files.

Some search experts said Microsoft’s decision to end its book-scanning effort suggested that the company, whose search engine has lagged far behind those of Google and Yahoo, was giving up on efforts to be comprehensive.

Source: Infoworld

The new search engine company, Powerset, has released a public beta version of its search engine. Right now, Powerset can only search Wikipedia. In the new version, people can search using simple phrases, short questions and keywords. The product launch comes just a day after reports that the company is being shopped to potential buyers by investment bank Allen & Co.

The way that Powerset returns queries means that answers are often found in the result snips. They are also structuring a lot of the Wikipedia and (and already structured Freebase) data and inserting it into results. So a search for “Bill Clinton” shows results, but also shows Freebase structured data along with additional query refinements to get to more information. The important thing below isn’t the structured data in the results, its the fact that you can click on the action words and drill down into very specific queries (to find, for example, what bills he signed, or which Supreme Court justices he nominated).

Powerset is indexing web pages much differently than normal search engines, which generally just record content to match against keyword queries. Instead, Powerset is trying to understand the content on the page so that it can be matched meaningfully to queries later. Even queries that don’t use matching words.

Powerset definitely has an interesting search product on its hands. Its approach of pulling third-party content into its own UI and providing tools to better analyze it is undeniably useful. On the other hand, Google and Yahoo will be watching to see if Powerset’s semantic search proves popular.

Source: Washington Post

Microsoft has abandoned its blockbuster bid to acquire the Internet Company Yahoo! after a fresh takeover offer of almost $US50 billion ($53.4 billion) was subsequently rejected by its target as still too low.

Ballmer increased Microsoft’s offer to $US33 a share, or a total of $US47.5 billion, from its initial bid of $29.40 a share. Mr Yang said Yahoo! would not accept an offer below $37 a share.

“Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo! has not moved toward accepting our offer. After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal,” said Mr Ballmer.

A person close to Yahoo said the price was not the only stumbling block. The person said Yahoo was also concerned that the deal could be blocked by regulators and wanted a higher offer, in part, as a hedge against that risk.

Microsoft has spent years and billions of dollars trying to build an online business. Yet it has steadily lost ground to Google in the search business and has failed to gain significant momentum with advertisers. Microsoft’s decision to abandon its pursuit of Yahoo is not necessarily the last chapter in the three-month-old saga. If Yahoo’s shares fall significantly, the company will be under intense pressure to act, and may choose to resume negotiations.

Source: The Sydney morning Herald

Internet search engine Google lost revenue from search ads to its rival Yahoo! in the first quarter of 2008 fiscal, according to a study by SearchIgnite, a search advertising technology firm.

The report shows that spending by search advertisers on Yahoo grew a robust 57 percent while spending on Google grew only at about half that rate. That meant Google’s total share of search ad dollars declined slightly to 70.4 percent, while Yahoo’s rose to 24.2 percent. Microsoft’s declined slightly to 5.4 percent.

ComScore, an internet data researcher, said Google’s sites received 59.8 percent of searches in March from among the top five search engines. The results were an improvement from the 59.2 percent market share it had in February.

Yahoo’s search share fell to 21.3 percent in March compared to 21.6 percent the previous month. Microsoft sites were down to 9.4 percent from 9.6 percent. AOL sites were down to 4.8 percent from 4.9 percent. Ask Network sites rose to 4.7 percent from 4.6 percent.

Yahoo Chief Executive Jerry Yang told employees in an e-mail that no decision has been made about Microsoft Corp’s bid to buy the company for $44.6 billion.

As per Jerry Yang, the bid was filed at US Security and Exchange commission. The Yahoo Board is evaluating the pros and cons of the deal and has hired top advisors for further consultation.

The e-mail, addressed to “yahoos” and written in lower case letters, said:

As we’ve said, no decision has been made about microsoft’s proposal. our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape.

Source: Reuters