MSN Buys Desktop Search Startup

MSN continues to delve deeper into search with the acquisition of a 6-month-old startup focused on desktop search.

Microsoft Corp.s Internet division announced late Thursday that it has bought Lookout Software LLC, the maker of a software add-on to Microsoft Outlook that indexes and searches e-mail as well as desktop files. Terms of the acquisition were not disclosed.

While not directly addressing how they will use Lookouts technology, MSN officials said it is part of the companys increased investment in search and its efforts to make results—whether from the Web or from the desktop—more relevant for users.

“Our vision is to take search beyond todays basic Internet search services to deliver direct answers to peoples questions, and help them find information from a broad range of sources,” Yusuf Mehdi, MSNs corporate vice president, said in a statement.

The acquisition marks another step in MSNs more aggressive push into the search market. The Redmond, Wash., division has been developing its own Web search index and algorithm for MSN Search, set to go live as early as the end of this year.

Earlier this month, MSN offered a public preview of its Web search engine as part of an overhaul of MSN Search. It also plans to launch news and blog search sites later this year.

The Lookout acquisition demonstrates that MSN is planning to further combine both Web search and desktop search, said Gary Stein, a senior analyst at Jupiter Research, a division of Jupitermedia Corp.

He said he expects Lookouts functionality to be rolled into MSN Search and that the deal appears to be about gaining new technology and development talent.

“This acquisition is not about shutting anyone out of the market,” he said.

Desktop search has become one of the next frontiers in search. Google Inc. has made moves toward the desktop with its Google Deskbar download, and Ask Jeeves Inc. last month acquired another desktop search startup. Microsoft also is widely expected to add more search features in Windows itself with the next operating-system release, Longhorn.

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Lookout, based in Palo Alto, Calif., was founded in January 2004 by Mike Belshe and Eric Hahn, who both developed the software. Belshe will join MSN Search full time, while Hahn will join temporarily to help in the transition, Microsoft announced.

Hahn, a former chief technology officer at Netscape Communications Inc., also is the founder and investing partner at early-stage investment firm The Inventures Group, in Palo Alto, Calif.

“For us, this deal made total sense with where we were,” Belshe said. “Its going to let us take Lookout to the whole next level … in how deep we can go in search.”

Lookout, in a free preview release, runs with Microsoft Outlook 2000 and higher and requires Microsofts .NET Framework version 1.1, according to the companys Web site. Along with e-mails and desktop files, it also can index public Outlook folders and Outlook calendar items and contacts.

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