Microsoft Buys Search Engine FAST, Won't Fix Microsoft Live

FAST is a profitable enterprise search company based in Norway with about $400 million in revenue ($333 million in 2006). Microsoft offered $1.2 billion for the company, approximately 42% more than the share price.

The acquisition plays to Microsoft’s core strength–the enterprise–and therefore makes sense. However, it will not directly help improve Microsoft’s position in consumer search. FAST does provide OEM search to LookSmart and others, but Microsoft’s problem in consumer search is not technology–it is habit and brand. So even if FAST’s technology represents a major improvement, this will not likely result in search-share gains.

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