As part of its ongoing investment in search technology, Microsoft has acquired Lookout Software, a two-person company specialised in e-mail and desktop search.
Lookout offers a "personal search engine", where the software adds a search bar to the Microsoft Outlook e-mail client allowing users to search through their e-mail and their computer quickly and easily.
The acquisition brings Microsoft more expertise in the area of search, contributing to its goal of providing the best tools for finding information, Microsoft said. Lookout developer Mike Belshe will join Microsoft's MSN search team. Details of the transaction were not disclosed.
The deal closed at the end of June, said Eric Hahn, creator of the first Lookout product and founder and financier of Lookout Software. "This was a very lucrative transaction for us and we're very happy about it," Hahn said.
Microsoft did not provide details about how it would use the Lookout technology. However, Hahn said the acquisition is part of a much larger search strategy at the software company.
"Search has just taken over our industry as the must-have feature, whether it is web, desktop or e-mail," Hahn said. "Lookout is not the silver bullet in [all areas of search], but it is really good in e-mail and desktop search and those are critical parts."
Asked if Microsoft could use Lookout's technology to improve Hotmail, its web-based e-mail service, Hahn said the technology would not work in that area, but that the general idea behind Lookout would.
"The code of Lookout would not map to Hotmail today. However, the semantics and the experiences we have had are very applicable," he said.
Last week, Yahoo said it had acquired San Francisco startup Oddpost. The company provides a web-based e-mail service with a user interface that functions more like a desktop program, where users can drag and drop e-mails into folders. The company said it will use the technology in an upcoming version of Yahoo Mail.
Google is also entering the web-based e-mail market, with an upcoming service called Gmail. It will include 1Gbyte of storage and some advanced search and filing features.
Microsoft has made search a key investment area and is specifically targeting the Internet search market.
The company is working on a new internet search engine, scheduled for launch within a year, and recently revamped its existing MSN Search website. Microsoft has also said it plans to launch search services for news and web logs later this year.
Joris Evers writes for IDG News Service