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2/26/2007
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With Acquisition, Microsoft Pushes Further Into Online Health Care

Microsoft has agreed to acquire Medstory Inc., which has an online search engine for delivering health information on the Web. Financial terms were not disclosed.

Microsoft has agreed to acquire Medstory Inc., a move that provides the software maker with an online search engine for delivering health information on the Web. Financial terms were not disclosed.

In buying the Foster City, Calif., startup, Microsoft is pushing deeper into the growing business of providing health information on the Web, a trend driven in part by aging baby boomers seeking more information about their medical needs. Microsoft last year bought clinical software maker Assyxxi.

Microsoft said Monday it bought privately held Medstory as part of its "long-term commitment toward the development of a broader consumer health strategy." Medstory will become part of Microsoft's recently formed Health Solutions Group, and its founder, Dr. Alain Rappaport, will become general manager of health search.

Medstory differentiates itself from competitors by using artificial intelligence techniques in searching government documents, medical journals, and the Web. A search on "lowering cholesterol," for example, would return related information on drugs, nutrition, and clinical research.

Fully, 8 million people every day last year in the United States went online to find health information, according to the non-profit Pew Internet and American Life Project. The growing demand has fueled the growth of an increasing number of health-oriented Internet companies.

Steve Case, founder and former chief executive of America Online, launched in January a preview version of his upcoming healthcare portal Revolution Health. San Francisco startup Healthline is an example of another search engine focused on health information.

Pointing to the growing use of health sites, WebMD Health Corp., one of the leading health sites, reported this month that revenues soared 64% in the fourth quarter ended Dec. 31 to $80.6 million. Net income was $8.9 million, compared to $6.1 million a year ago.

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