Most initial reviews found the Powerset product release underwhelming. Critics appreciated the innovative semantic UI and recognized its potential, but believed it didn't vastly improve Wikipedia. So in view of the lukewarm reviews, the acquisition by Microsoft was unexpected. The 100M price tag is around 5x the 12M Series A + 8M investment put into the company. Microsoft execs must believe Powerset can be a weapon in its battle with Google.

What Powerset is today

Given a set of unstructured information, Powerset applies Natural Language Processing techniques to extract concepts and the key semantic concepts out of the text. It then builds a semantic index (similar to Google's) as well as a conceptual graph of relationships between entities. This graph is typically expressed in RDF triples.

One of the Powerset innovations is surfacing of semantics to the user interface. The contextual gadget is overlaid to help navigate the unstructured information.

Many thought Powerset to be a generic semantic search engine, but its first product is limited to Wikipedia. It is not trivial to scale the technology to the entire web.

Why Powerset is Powerful

When semantic technologies emerged a few years ago, people started talking about how semantic web and/or semantic search might be a Google killer. The talk was supported by logic that semantic search can deliver more relevant results because it "knows" the content.

Industry realizes that isn't the case. Semantic search has no huge advantage over the statistical approach used by Google. We discussed this in the post Semantic Search - Myth and Reality.

What is powerful about Powerset? Precisely that it doesn't try to search the web as a whole. Right now, the solution works on Wikipedia, but the infrastructure is generic, so any other site could also be enhanced. The contextual outline developed can be used to navigate any content.

Instead of dealing with the whole web, the idea may be firstly to build solutions for specific sites.

Head-on with Google?

Powerset as it is today is no Google killer. At this point only something with huge traction and momentum would stand a chance.

In the search market, Google has a strong hold - potentially stronger if the Yahoo deal goes through. People are conditioned to Google: it's simple and, yes, imperfect, but it's good enough and the results are still better than Live Search.

If Microsoft bought Powerset with the goal to incorporate it into Live Search, then it's likely to be another acquisition to make little impact on the bottom line. In fact, the announcement on the Live Search blog states just that. The number one reason is acquiring talent; the second is the belief that NLP and semantic algorithms will be able to patch holes in today's search.

Today Powerset brings only interesting technology; it doesn't bring traction. So what were they thinking up in Redmond? There may be more subtle play, leveraging the fact Powerset works well on knowledge sets like Wikipedia.

Possibly Microsoft plans to deploy Powerset across its own sites, then perhaps incorporate Powerset into Internet Explorer.

Imagine going to Wikipedia and having a semantic overlay on each page. Now imagine scaling this experience across major information sources around the web.

Providing contextual, semantic experience allows Microsoft to retain eyes longer, shaving off the time people spend searching Google.

This is an important point because Google doesn't make money on search - it makes money on advertising.

Can Microsoft ever beat Google in Advertising?

The real problem Microsoft is seeking to solve is advertising. Until now the web has figured out two fundamentals for advertising - portals and search.

Portals show ads on each page; the more people browse the content, the more ads are shown and the more money is made. The search model emerged as an alternative, now more successful, path to advertising dollars.

With Powerset and other semantic technologies, there's another model: contextual information exploration overlaid on existing content.

If Microsoft can figure how to keep eyes off Google's home page, the game will shift dramatically. The browser is one of Microsoft's most powerful tools - and the default box is Live Search.

If Microsoft wants to win over advertisers, it might just do more with the browser. Incorporating aspects of Powerset's semantic navigator into the browser by default could be a game changer. This is not a straightforward play. A large company with bureaucracy and execution problems is unlikely to be able to merge semantics into the browser quickly and elegantly.

Conclusion

The Powerset acquisition is an interesting move by Microsoft. This hot semantic startup was on everyone's radar.

What can the plan be? It is doubtful that Microsoft bought the company just to enhance Live Search. Possibly the plan is to replicate the Wikipedia solution, then incorporate Powerset into Internet Explorer.

That is a bold play requiring exact execution - not the kind Redmond has shown lately.

What do you think Microsoft is going to do with Powerset? What are the other applications of this technology that you can think of?

Here's a screenshot from Tim Berners-Lee's opening presentation:

Is the Semantic Web a Dream?

The first question is about the Semantic Web -- is it still just a dream? Nova Spivack of Twine says simply: yes! He says that the problem gets harder as more information comes on the web. You need to "disambiguate data". The AI approach puts burden on the software. The Semantic Web approach puts the burden on the data itself, so it's not about making smarter software - but smarter data.

He says there are technical and social challenges. Nova asks, rhetorically: is there an alternative to the Semantic Web, as the Web grows and scales? He says the HAL-9000 AI approach is an alternative, but it is not progressing much. Another solution is to "use the crowd", and he says while this approach shows promise, it doesn't scale to solve the problem. So both machine and human approaches won't scale -- hence the Semantic Web is the solution. He says "it's a huge cultural project" and is a long term goal.

Deborah McGuinness from Rensselaer introduces the debate, including a mention of ReadWriteWeb as part of the debate's "social media twist".

AI's Role in the Web's Future

Nigel Shadbolt is a Professor of Artificial Intelligence and Deputy Head of the School of Electronics and Computer Science at the University of Southampton, UK. He kind of defends AI, although he says we can expect "a very different form of AI" to what has gotten most of the press thus far. He says that we can expect "augmented collective intelligence". He says "fragments of micro-intelligence" will evolve into an ecosystem, so AI will contribute to the future of the Web in that way.

Multi-lingual Web

The next question is about a multi-lingual Web. Wendy Hall is a Professor of Computer Science in the School of Electronics and Computer Science at the University of Southampton, UK. She talks about the Chinese Web, which has 5 billion pages that Google doesn't index. She says that soon the dominant language on the Web will be Chinese, and much of that data will be via mobile phones. She says that a lot of "key sites" in the english language Web are not accessible in China, so the role of government will in a big way determine what will happen. She says that educating government all over the world will be important. The Web is already fragmented, but the solution isn't to teach everyone english. So the Web Science Lab has been established in China and progress is being made there.

Nigel Shadbolt points out that different cultures frame information quite differently. So he says there must be multiple ways to represent content on the Web. Nova says that each culture has to map their content to a conceptual representation, and then globally we need to map different culture representations together.

Tim Berners-Lee says that sometimes that will work and sometimes it won't. He says "the diversity of culture is really important" and he lists a kind of gradation of content that we can understand -- e.g. 10% of Web content everybody can understand, x% we can't understand, etc.

Democracy and the Web

A question from the audience about democracy. Wendy replies that the Web does have the potential to change the way we select politicians to represent us. So she says it's been interesting to watch the US presidential election - Obama has been using new technology and could bring young people into the process. So the Web brings a wider representation of people to be involved in democracy. She says it has the potential to "dramatically change" the way we select governments, mentioning the self-organizing of Wikipedia. "You can well imagine something which can shift what we do" in democracy.

Nigel chimes in that the Web can both mobilize democracy, but also there is danger of "cyber vigilantism". He mentions the dangers of a "rampant blogosphere".

Nova also mentions the "threat to democracy" of the Web - he says "freedom is actually at risk". He notes data logging and privacy issues. So he says it's too early to tell how the Web will affect democracy - he says the Web was built on trust, but that nowadays the Web is being mis-used in some ways. So we need to be worried about that - encryption, privacy, etc are things to look out for.

Web Science?

There is a question about ontologies, but (ironically) the answer got rather complicated and so I lost the thread :-)

Next an audience member asks: what's the difference between Web Science and Computer Science? Wendy replies that Web Science is inter-disciplinary and it's designed to get more people than just computer geeks into studying this domain.

Multi-modal Data; Can Semantic Web Capture Nuances?

The next, rather rambling, question from the audience is addressed to Nova and is about data. The question (when it eventually comes) is: what is the Semantic Web when it comes to different kinds of data (multi-modal, subtleties, nuances). Nova's first response to this involved question: whoa! He then says that we have to start with the simple cases. He talks about time and calendars, semantic representation of events, etc. But he says the Semantic Web won't capture the nuances of human interaction any time soon. He says "we're not trying to replace human intelligence", but "free up" human intelligence.

Nigel, coming from AI angle, says that behavior is a key part of the puzzle. He says understanding behavior, on a Web scale, is happening. He talks about sensors - where sensors report on data in our environment. 'Ambiently intelligent environments' is his term for this.

Tim's response: "an ontology does not represent the same thing as a haiku does." The audience laughs appreciatively. He interprets that as mening there are different languages for different things.

Will there be an Innovation in Logic?

The next question talks about "an innovation in logic". For example "visual logics" will need innovation if the Web is to understand multi-modal information. Tim's response is that logic has given us formalized reasoning, but it doesn't describe how people think. So he doesn't believe we need to formalize some kind of data as logic (e.g. the way people dance).

Nova says that we don't have an equivalent of a functional MRI for the Web, in other words there aren't enough ways to measure things on the Web. He says you need sensors and math to do measurements, rather than logic.

Conclusion

The final question is about data: how do you validate it, and if it's to be shared, how to you manage privacy etc. Nigel points to Wikipedia as a way to validate information, self-correcting by people. Nova says reasoning is where the Semantic Web can help validate data, as well as the human self-correcting (e.g. wikipedia).

And that ends the debate. Feel free to contribute comments below!