Matt Marshall over at VentureBeat says he has it on good authority that Microsoft (MSFT) is planning to make an offer for Powerset, the “semantic search” startup that has been in stealth mode for quite awhile now, popping up only long enough for a party or two, and recently poked its head out with a small-scale demo of its technology as a Wikipedia search engine.

The rumoured dollar value for this deal? $100 million. If true, that would be a hell of a payday for something that hasn’t really shown much in the way of spectacular results so far, and is based at least in part on 30-year-old technology that the company licensed from Xerox’s PARC labs. TechCrunch says the deal could still be derailed by the Microsoft-Yahoo (YHOO) mess.

Of course, for a company like Microsoft, $100 million is chicken feed — Bill and Steve find that kind of money stuffed under the couch cushions when they vaccuum the Microsoft HQ. And the idea of an acquisition has been around before, with rumours floating here and there. It’s a painfully well-known fact that Microsoft’s search is a distant third place to Google (GOOG) and Yahoo, which is one of the main reasons the software behemoth continues its on-again, off-again (currently on-again) pursuit of Yahoo’s search business.

If it could use Powerset to add natural-language search tools to its arsenal, that might help to close the gap with Google — although as Danny Sullivan has noted many times, we’ve been around this particular racetrack many times before.

• Google's New Enterprise Video Not a True Business Offering  »
• Google's Checkmate Was Three Moves Ago  »
• Slow Online Ad Growth Could Impact '09 Outlook  »
• FCC Chairman Martin Responds to Comcast's "Net Neutrality" Appeal  »
• eCommerce Stock Pair Trade: Amazon vs. eBay  »

Mathew Ingram

• Bio & more articles
• Visit Mathew's blog