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Microsoft buys health search engine

New bid to dominate niche market

Microsoft has agreed to acquire a company that operates a search engine for health information, one of the most popular search topics online.

Microsoft expects that the acquisition of privately held Medstory will improve its health-search offerings and anchor a "broader consumer health strategy”, the company said at the Healthcare Information and Management Systems Society conference in New Orleans.

Microsoft rival Google has tuned its web search engine to recognise health-related queries and give users various options to refine their results by clicking on links for topics like treatment, tests, symptoms and causes.

Microsoft's broad plans for Medstory's technology include embedding it within health-related applications and services and using it to improve the search capabilities of the MSN Health & Fitness site and of Windows Live Search, Microsoft's search engine, a spokeswoman said. Microsoft will maintain Medstory's site as a health search portal, she said, declining to say when the deal is expected to close.

Unable to match Google in general web search, Microsoft is focusing on search services for specific audiences and topics, such as health, said analyst Rob Enderle of Enderle Group.

"With Google dominating, the way to carve out parts of the search market is through specialisation," he said. "From the standpoint of [general web] search and the value it provides to its advertising customers, Google is very hard to beat."

"To beat dominant players, you find a niche and specialise in it. That way, you can do better than the generalist because you can focus on the distinct needs the niche has," he added.

Enderle is sceptical about Google's intention to match the precision of specialised search engines with its general web search engine. "Dominant providers want to make their tools fit all instances, but you almost never can do that. If you try to address any particular vertical, something in terms of usability drops off for everyone else, because you're forced to play within that general realm," he said.

Although Microsoft has a general web search engine, its plan to continue operating Medstory.com as a standalone site and to beef up the search function of MSN Health & Fitness points to a specialisation strategy. Even on Windows Live Search, it could add a separate search tab for health-related searches.

About 113 million adults in the US, equivalent to 80 percent of US internet users, have searched for health information online, according to a Pew Internet & American Life Project study published in October 2006. People often seek information about diseases, treatments, diets, nutrition, fitness, medicines, doctors, hospitals and insurance, that study found.

About 8 million US adults searched online for health information on a typical day in August of last year, which is about the same level of popularity online as topics like paying bills, reading blogs and looking up phone numbers or addresses, Pew found. More than two-thirds of people (66 percent) begin their health-related research at a search engine, while 27 percent start at a health website.

Medstory, in California, will become part of the recently created Health Solutions Group at Microsoft. Financial terms of the acquisition weren't disclosed.


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