BUSINESS BLOGS
BUSINESS BLOGS
category: business
10 May 2008

If Powerset does indeed sell to MSFT, then it’s a perfect case of Buy On The Rumor Sell On The News.

The natural language search startup forever stuck in stealth mode has yet to make a dent in the search space; actually, it’s yet to launch.

With all of the hype this company has been able to generate, if it does sell now, then it means it was indeed all hype, because selling before you launch (or when you launch) is not exactly the best move, unless, as I said, you want to sell on the news and bought in on the rumor.

And if there is any meat on the bone, then I understand it will invariably get buyout offers from Google or MSFT (maybe YHOO, too) but I think if Powerset delivers on 10% of its promise, then it should recall that Google was shopping itself for $1B yet there were no takers.

Google was a once in a lifetime occurrence, granted, but even if Powerset becomes 10% - heck 1% - of what Google became then it might be better off staying independent. Of course, something tells me that is exactly what Powerset will do to milk YHOO vs. GOOG vs. MSFT’s obsession over one-upping one another to the max.

These are big if’s, mind you.

As a side note, the article says Powerset has only indexed Wikipedia and is now looking to index the Web. Our MetaMojo.com search product was not exactly based on Xerox’ IP or anything, but we managed to index the web quite efficiently… we just stopped fighting the search battle to focus on video content… so I do wonder what that obstacle is all about. I fail to understand how $12.5M in funding can’t get you to effectively scale the Web with their methodology.

Anyway, what price is enough for Powerset to sell now? Oddly enough even if they launch, they’ll have no distribution, thus no revenue, thus fairly low value.

Then again, price is not one and the same as value, it’s about demand and supply… so if indeed the usual suspects get involved, the price can rise.