Microsoft said it plans to use Powerset technology to enhance its free Live Search service that has been mired in third place behind Google and Yahoo in the lucrative Internet search-related advertising arena.

Powerset's "semantic search" merges linguistics with engineering in a software platform to figure out what people are seeking based on questions or phrases.

That compares to standard search engines, which respond to individual words in the search query.

"We know today that roughly a third of searches don't get answered on the first search and first click," Microsoft senior vice president of search, portal and advertising Satya Nadella said in an online posting.

"Search engines don't understand today that 'shrub' and 'tree' are similar concepts. We don't understand that 'cancer' sometimes refers to a disease and sometimes refers to a horoscope and when a query or a webpage refers to which."

Powerset recently launched a platform to better track down articles in popular online encyclopedia Wikipedia using natural language context.

"Because our goals around improving search align so well, Powerset has decided to team up with Microsoft," the firm said in a blog posting about the deal.

"We believe that this is the fastest way to bring our technology to market at a large scale."

Powerset will continue to operate from its offices in San Francisco, where the privately-held startup was founded in 2005. Financial terms of the deal were not disclosed.

The acquisition comes as Microsoft tries to heighten its online appeal in order to better challenge reigning Internet search and advertising king Google.

Microsoft's bid earlier this year to beef-up its online power by acquiring Yahoo for nearly 50 billion dollars was rejected by the struggling Internet pioneer.

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