Written By Sepideh Saremi | January 8, 2008 | Share This |

Microsoft said today it will offer $1.2 billion to acquire Fast Search & Transfer (FAST), a Norwegian enterprise search company. The software giant’s offer is for outstanding shares of FAST stock on the Oslo stock exchange and represents a 42 percent premium to the actual stock price. FAST has more than 3,500 enterprise clients, among them the Washington Post and Time Warner. Julie Kent at Search Engine Journal outlines FAST’s pricing, its relatively new focus on search monetization, and its market share:

FAST’s technological solutions are high-end and customized, with pretty lofty license and maintenance fees. Average license feels range from $300,000 to $600,000, with annual maintenance fees starting at $60,000.

The company’s primary focus at this point is “monetization”, or the use of search engines embedded in applications for financial transactions.

In 2007, FAST reported sales in monetization accounting for 70% of revenues, and enterprise search engine sales making up the other 30% of sales. For 2008, FAST projects $200 to $210 million in revenue, which is about a 10% market share of what IDC is forcasting will be a total $2.1 billion spend on corporate search applications in 2008.

Barry Schwartz at Search Engine Land also reports there are rumors that Microsoft will use FAST technology to become a better contender in the consumer search market, while Larry Dignan writes that the deal will spur consolidation in the enterprise search space and details how he thinks Microsoft will integrate FAST products into its existing offerings:

Microsoft is likely to raise a ruckus in enterprise search and force consolidation among FAST’s rivals. Microsoft can bundle FAST with its Microsoft Office SharePoint Server and probably poach some features for its consumer search if warranted. And Microsoft will gladly take FAST’s search engineering talent.

Topics: Investment, M&A, Microsoft, Search: News |