Powerset claims to be the next big thing. Would you sell the next big thing for $100 million? Here is my initial assessment of Powerset – It was an opportunistic play to make a quick buck on the Google craze.

I was right and this transaction proves it.

When Barney Pell was at Mayfield Fund several years ago, he thought that investing in search was a bad idea. Mayfield was actually clueless about the space. However, after the Google IPO, everybody suddenly became a search expert. Mayfield started investing search related startups and Pell started Powerset and they started claiming to have expertise in search that could topple Google. The same thing happened to another of Mayfield funded startups called “JotSpot”, which was going to take on Google – which eventually got sold to Google.

Powerset was in trouble from day one (aside from the fact that it is a bad idea). The foremost goal of the company was to find a search problem that nobody cared about, make it seem like a problem nobody could  solve and find a fool to part with their money.

Powerset found its fool – Microsoft. Microsoft has essentially purchased a Wikipedia search tool with its acquisition of Powerset.

Here is a point of view of another observer from GigaOm