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Microsoft buys Medstory search engine

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

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

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 healthcare."

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

The terms of the Medstory acquisition were not disclosed. It followed Microsoft's purchase last year of Azyxxi, a healthcare software system that retrieves and quickly displays patient information from many sources, including scanned documents, X-rays, MRI scans and ultrasound images.

The Microsoft move came 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 Case, the former chief executive of America Online, introduced an ambitious new consumer health site, RevolutionHealth.com.

WebMD, the leading health site, last week reported strong quarterly profit of US$8.9 million on revenue of US$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 searches, Healthline Networks, a start-up in San Francisco, reported 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.
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