Microsoft Acquires VideoSurf to Spruce Up Video Search & Discovery on Xbox Live
Microsoft (NASDAQ:MSFT), one of the largest consumer and enterprise software makers in the world, has acquired a new video search technology startup – VideoSurf. [1] VideoSurf is powered by a computer vision technology which parses frames in videos to make video search and discovery faster and more accurate. Microsoft has stated that it plans to integrate this video search technology across its entertainment platform to improve the search and discovery of video content on the Xbox Live network. Microsoft’s Xbox gaming console competes with the Sony (NYSE:SNE) Playstation 3 and the Nintendo Wii, while its Bing search engine competes primarily with Google‘s (NASDAQ:GOOG) search product.
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VideoSurf’s Tech to Improve Video Content Search on Xbox Live
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Microsoft plans to launch Voice Search on Xbox Live before the end of 2011. It will enable users to search for videos and other content using voice commands, powered by the Kinect gaming add-on. Microsoft is also tying up with TV content providers to make Xbox Live the ultimate media hub. VideoSurf’s technology will help it improve the user experience on the Xbox, enabling them to search and discover new content easily. It could lead to a significant increase in Xbox as well as Kinect sales, helping Microsoft improve its market share in the gaming console market. We currently estimate the Xbox to capture around 28% share by the end of the forecast period.
Director of Xbox Live at Microsoft Alex Garden stated:
VideoSurf’s content analytics technology will enhance the search and discovery of entertainment content across our platform. This holiday we will launch voice search across our entertainment partners on Xbox LIVE. Over time, as we integrate VideoSurf’s technology into our system, we are excited about the potential to have content tagged in real time to increase the speed and relevance of the search results
It could also help boost Bing’s market share
Microsoft could also integrate its technology to improve Bing’s video search algorithms on the desktop. Despite partnerships with Yahoo (NASDAQ:YHOO) and Baidu (NASDAQ:BIDU), it currently ranks way behind Google in terms of users. This might not be the magic bullet, but it could certainly help Microsoft gain users in Video Search, in which no search engine currently provides a very good experience.
Xbox and other entertainment devices account for around 8% of Microsoft’s $32 Trefis price estimate, while Bing and other online services account for nearly 5%. Our current price estimate stands nearly 25% above Microsoft’s stock price.
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