Microsoft to buy semantic search engine Powerset?

Having failed to acquire (or even reach a deal with) Yahoo, Microsoft has apparently set its sights on a new target. The software maker is rumored to be eying a $100 million acquisition of Powerset, a natural language-based search engine that is only usable on Wikipedia and Freebase.

Although there is no official confirmation, the move would make sense given Steve Ballmer’s recent comments that the most important thing for the foreseeable future is search. Sources say the deal is highly likely but hasn't actually been signed yet and could still be disrupted by further Microsoft-Yahoo negotiations.

One has to wonder, however, how much of a boost in the search market the acquisition will net them over time – we know Google has been a bit dismissive about semantic search and it didn’t do much for Ask Jeeves either. In any case it could at the very least help Microsoft distinguish itself in the search space, but with all the hundreds of millions they’ve already spent beefing up their search engine perhaps their problem isn't technological as much as it is a branding issue.