Microsoft acquires Fast: What does it really mean?

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Dave Pasternack
Dave Pasternack

Microsoft's acquisition of Fast Search & Transfer last week for $1.2 billion is a development that will significantly alter the search ecosystem in the years ahead. While the media coverage has focused on the fact that Fast has been a strong player in enterprise search (a market that Google has been struggling to get into), Fast's assets include a set of technologies that have the potential for giving Microsoft tactical and strategic advantages as it battles Google on several important fronts.

A competing contextual network
The old saying that “content is king” applies more strongly today than when it was coined in the 1990s. Major newspaper sites such as The New York Times and other content powerhouses have only recently concluded that they're better off abandoning their traditional “walled garden” approach to content in favor of an open model that attracts search traffic and monetizes this traffic through on-page advertising. But these publishers do not want Google or any 3rd party entity controlling their share of the advertising split.

Fast's AdMomentum, launched in early 2007, provides these publishers what they so badly need: a private-label ad-serving network that gives them, not Google, full control over how they monetize their own inventory. Integrating this technology with Microsoft's adCenter will provide exciting new opportunities to grow this ad revenue stream. And, if enough large publishers turn their back on Adsense, this could really hurt Google (Adsense revenue accounts for about 40% of Google's overall income).

Search beyond the browser
Fast's approach to search treats it as an “interaction paradigm” running across all computing platforms, including traditional desktop, mobile, IPTV and other devices. The company has deliberately avoided challenging Google in the Web search arena because of the resources required, but has put considerable R&D into developing search technologies that work outside the Web search context.

Here, technologies that work well for desktop-based Web search may not be appropriate in other contexts. For example, searches in the mobile environment may require calculation of a whole host of non-PageRank variables such as user location, user profile, and past activities to produce meaningful results. The same goes for searching in IPTV, e-commerce, or social networking environments, where a recommendation engine capable of analyzing past product views, purchases, contacts made, or reviews read may provide a better user experience than orthodox search technology can provide. Fast has developed a set of products that are optimized to handle all of these non-Web search issues and Microsoft will be putting them all to work.

A good fit for Microsoft
Microsoft has been derided by many for failing to directly confront Google in Web search, but in my view it's simply been biding its time until it can assemble the components necessary to make Google irrelevant. These components already include mobile (Windows Mobile), home-based (XBox, which is both a gaming and an IPTV device), and business (Office). Search will be the interaction paradigm that unites these devices, and Fast is a perfect acquisition for Microsoft, both because Fast's product set gives it so many advantages in the non-Web search context, and because its philosophy toward search is so consistent with Microsoft's own.

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