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Satya Nadella, senior vice president of Microsoft's Search, Portal, and Advertising business, confirmed the purchase in a statement, following months of rumours that they were in merger talks. Financial terms were not disclosed.

Powerset's semantic technology breaks down the meaning of words into related concepts, freeing users from having to type the exact words they want to find.

"Powerset has always been a small company with big dreams, with the ultimate goal of changing the way humans interact with computers through language," writes Powerset product manager Mark Johnson in a company blog post announcing the deal<

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The start-up, with several dozen staff including academic experts in the field of natural language processing, is one of a handful of recent web search acquisitions by Microsoft, even as it has been frustrated in its pursuit of Yahoo.

The software giant said in January it was buying Norway's Fast Search and Transfer ASA, a top provider of web search services used inside businesses, for about $1.2 billion.

However, Yahoo rebuffed a $47.5 billion bid and a partial deal to buy Yahoo's search business for more than $9 billion.

Microsoft says Powerset's software, together with similar semantic web tools developed by Microsoft Research, can help it develop products that understand the intent of a user's word choices in each search.

"We know today that roughly a third of searches don't get answered on the first search and first click," says Nadella. "Usually searchers find the information they want eventually, but that often requires multiple searches or clicks."

Earlier today it emerged that Microsoft was in talks with News Corporation, AOL and Time Warner, among others, to discuss a potential takeover of Yahoo that would see the company split into several parts.