Search Engine Optimization and Search in general has always been a fascination for me. On a personal level, I keep up with search-related news but rarely blog about it since it does not pertain to web conferencing. However, since Microsoft is involved and a potential acquisition is on the table, I decided to comment on it.
Earlier this week, Microsoft announced that it would buy Fast Search and Transfer (FAST) for $1.2 billion cash buy-out. FAST is a player in the enterprise search market, an area that Google is looking to target. (Other players in the enterprise search market include Autonomy and Vivisimo.)
The reported $1.2 billion is an estimated 42% premium on the FAST shares which trade in Norway. The company is based in Oslo, Norway. In its most recent third quarter, FAST had revenue of $35.6 million, up 4 percent from the second quarter. Third quarter recurring revenue was up 65 percent from a year ago. Fiscal 2006 revenue topped $162 million, according to FAST’s annual report. The company is profitable and had $137.9 million in cash at the end of its third quarter.
I expect that FAST will be integrated into Microsoft SharePoint, one of the fastest growth software segments in the company, which cleared $800M in sales at year end June 30th. The enterprise search space is wide open as there is no dominate leader. By bundling FAST with SharePoint, this creates tremendous technology differentiation on the enterprise search level. A very interesting play for Microsoft.
There is no doubt in my mind that Google or other enterprise companies like HP, Oracle or IBM will jump on the search acquistion band wagon.