Microsoft (MSFT) will spend $1.2 billion to buy Norway’s Fast Search and Transfer. The company is in the search engine software business. While Fast Search is growing and profitable, the buy-out is a 42% premium over the firm’s current share price.
Fast technology is based on what the company calls "context insight". It uses text and data mining to bring back relevant search information. Fast provides enterprise and mobile solutions. It does not have a large consumer business like Yahoo! (YHOO) or Google (GOOG).
Fast has a number of banks and government customers. But, it also numbers Looksmart (LOOK), Mapquest, and Infospace (INSP) among its clients, so it obviously licenses technology to consumer-facing companies.
Microsoft has seen its market in consumer search fall into a distant third place. While it may not buy Yahoo! to solve that problem, it would appear that it is willing to spend large sums to acquire leading-edge technology.
Advanced search tech is the one thing Google is known for. If Redmond can’t build it, why not buy it? Fast may not be the last part of that M&A picture.
Douglas A. McIntyre
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