[Sigmed-l] Microsoft to Buy Health Information Search Engine (fwd)

[Leonard Davolio]

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Date: Tuesday, February 27, 2007 1:40 PM -0500
From:

Subject: Microsoft to Buy Health Information Search Engine



NY Times
February 27, 2007


Microsoft to Buy Health Information Search Engine


By STEVE LOHR

Microsoft's drive into the health care market is just getting under way, but
the company signaled yesterday that one important ingredient in its plan
will be a specialized search engine tailored to deliver useful medical
information to consumers.

Microsoft is buying Medstory Inc., a small start-up in Foster City, Calif.
Its search software applies artificial intelligence techniques to medical
and health information in medical journals, government documents and on the
Internet.

The terms of the Medstory acquisition were not disclosed.

The Medstory purchase, said Peter Neupert, vice president for health
strategy at Microsoft, was a first step in a broader company strategy to
assemble technologies that would "improve the consumer experience in health
care."

"Clearly," Mr. Neupert said, "search is a critical part of that better
end-to-end experience for consumers."

The acquisition follows Microsoft's purchase last year of Azyxxi, a clinical
health care software system that retrieves and quickly displays patient
information from many sources, including scanned documents, X-rays, M.R.I.
scans and ultrasound images.

The Microsoft move comes at a time of increased investment in online health
ventures, rising traffic at consumer health sites on the Web and profits at
the most popular sites. Last month, a venture firm headed by Stephen M.
Case, the former chief executive of America Online, introduced an ambitious
new consumer health site, RevolutionHealth.com.

WebMD, the leading health-related site, last week reported strong quarterly
profit of $8.9 million on revenue of $80.6 million, surpassing Wall Street's
expectations. The stock price of WebMD -- an Internet pioneer in health
information that struggled for years -- has surged in the last year.

In health-related search, Healthline Networks, a start-up in San Francisco,
reports rising traffic on its Web site and a growing string of deals to
provide the search engine for sites of other companies, including Merck and
PacifiCare. At Google, Adam Bosworth, a vice president for engineering, is
leading the effort to develop a health-information offering.

These companies and others are seeking ways to build businesses on the
Internet that profit from what is called consumer-driven health care. The
notion is that shifts in demographics, economics, technology and policy will
inevitably mean that individuals will want to, and be forced to, make more
health care decisions themselves.

Aging baby boomers, accustomed to personal choice and to technology, tend to
want a say in their treatment decisions. And the Internet is already an
important source of health information. Eight million people in the United
States go online for health information every day, according to a study last
year by the Pew Internet and American Life Project, a nonprofit group.

Financially, the pressure by Medicare and private health insurers to hold
down costs and shift more of the burden to individuals, analysts say, will
force people to make more health care spending choices.

In Medstory, Microsoft is acquiring "some of the best deep technology" in
the emerging field of medical search, said Esther Dyson, an industry analyst
who is also an investor in Medstory. That technology, Ms. Dyson said, is
"not so much a search engine, but an ontology engine," with a capability to
find and identify concepts in health and not just sort through words and Web
links.

The longer-range goal, Mr. Neupert said, is to link personal information
like age, sex, drug regimens, family history and even genetic markers to
search. The ideal is that search results are tailored individually,
identifying treatments, drug interactions and medical journal articles of
interest.

"Health search could be way more relevant," he said. "You don't need to see
thousands of results. What you want to know is, what does this mean to me
personally?"

Dr. Alain T. Rappaport, the founder and chief executive of Medstory, said he
was impressed by the importance Microsoft placed on "intelligent search"
in health care and by the promise that Microsoft's global reach and
resources could accelerate the spread of the technology his team developed.

Microsoft had talked to Healthline recently about using its health search
service, said West Shell III, the chief executive of Healthline. "This means
Microsoft has decided to go it alone," Mr. Shell said.


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