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Microsoft on Tuesday confirmed it has reached an agreement to buy Powerset, a natural-language search firm in San Francisco. Terms of the deal were not disclosed, but some industry watchers estimate the transaction at $100 million.

Powerset will join Microsoft’s core search-relevance team. Microsoft said the company’s technology complements other natural-language technologies Microsoft research has developed.

Powerset also brings talented engineers and computer linguists to Microsoft’s Live Search. The Powerset team boasts a wide range of experience from other search engines and research organizations like PARC (formerly Xerox PARC).

“We’re buying Powerset first and foremost because we’re impressed with the people there,” wrote Satya Nadella, senior vice president of search, portal and advertising at Microsoft, in the Live Search blog. “Powerset CTO and cofounder Barney Pell is a visionary and incredible evangelist.”

A Semantic-Search Quest

Nadella cited a shared vision to take search to the next level by adding understanding of the intent and meaning behind the words in searches and Web pages. Roughly a third of searches don’t get answered on the first search and first click, according to Microsoft.

“Usually searchers find the information they want eventually, but that often requires multiple searches or clicks on multiple search results,” Nadella said, citing two specific problems.

The first is differences in phrasing or context between a user’s search and the way the same information is expressed on Web pages. Today’s search engines don’t understand that “shrub” and “tree” are similar concepts. They also don’t understand that “cancer” sometimes refers to a disease and sometimes to a horoscope and when a query or a Web page refers to which.

The second reason is a lack of clarity in the descriptions for each Web page in the search results. Sometimes a result looks relevant from its short description on the results page but turns out to be not…

Microsoft is ready to put its popular Microsoft Office suite online, including Word, Excel, PowerPoint and OneNote. Called Microsoft Equipt, the suite will join the software giant’s online offerings of Windows Live Mail, Messenger, OneCare and Photo Gallery.

Previously code-named Albany, the consumer-oriented Equipt will be available for purchase on July 15 through Circuit City’s 700 outlets nationwide. Each $69.99 one-year subscription will cover up to three home PCs, Microsoft said.

“Certainly the initial move is to capture more consumer eyeballs,” noted AMR Research analyst Jim Murphy. “Though it’s unclear at this point what the next version of Office will look like, it’s likely that it will include a mechanism for Microsoft or its partners to monetize its widespread use — whether that’s through advertising or selling other value-added services.”

Equipt For Enterprises?

Microsoft’s move to make Office a consumer-friendly online service has some long-term implications for the small-business market. Gartner Client Services Vice President Michael Silver thinks we’ll “see more subscription offerings from Microsoft as time goes on” because it would give the software giant a “more reliable” revenue stream.

The software giant’s latest move basically adapts the model of Microsoft Software Assurance for enterprises to the home market, Silver said.

“Larger small businesses already have offerings like this through Microsoft’s open-licensing program, but the pricing and licensing is more commensurate with prices businesses pay,” Silver said. “Small businesses can probably expect something like this suited to them in the future, but may have difficulty buying this version in particular because it does not contain Outlook.”

The terms of the current consumer license will prevent a small business from using Equipt, Silver noted. “Microsoft says that business use of Equipt is prohibited,” he said.

Way More Functional

When Microsoft eventually does offer a similar model to small-business users, it could cannibalize the software giant’s…

Last month, Apple announced that its new iPhone 3G would cost just $199 for the 8GB version and $299 for the 16GB version. AT&T confirmed that pricing Tuesday, but clarified that those prices are only for certain users — buyers of any iPhone before the iPhone 3G goes on sale July 11, new AT&T customers, or subscribers eligible for an upgrade discount.

For all others, the price is $399 for the 8GB iPhone and $499 for the 16GB iPhone 3G. In a new wrinkle, customers can buy the iPhone 3G without a service plan, but the price is steep at $599 for the 8GB iPhone 3G and $699 for the 16GB iPhone 3G.

AT&T also announced monthly service plans for the 3G iPhone, ranging from $69.99 for 450 anytime minutes to $129.99 for unlimited minutes. The plans include unlimited Web and e-mail access, but not texting. AT&T will charge $20 for unlimited text messages.

Those monthly service fees are higher than for the original iPhone. So will customers blink at those rates, even with a subsidized service plan?

New ‘Value Proposition’

Tim Bajarin, principal analyst at Creative Strategies, doesn’t think there will be much blinking. “I believe the new iPhone delivers a different value proposition via software, so the pricing plans will be viewed through the lens of its new software applications capabilities,” he said in an e-mail.

Apple’s iPhone 2.0 software will be preloaded on all 3G iPhones, AT&T said. The software supports a new ecosystem of third-party software and will connect to the Apps Store, Apple’s mechanism for users to download software over the air.

Apple’s Web site advertises that users will “find applications in every category, from games to business, education to entertainment, finance to health and fitness, productivity to social networking.” And it boasts that the apps will exploit iPhone technologies…

Chipmaker Advanced Micro Devices released three new Phenom quad-core processors for the desktop Tuesday, including an X4 9550 Black Edition that allows users to increase the clock speed.

The Black Edition (BE) model, with a “clock multiplier control” and a clock speed of 2.6 GHz, is aimed at gamers who want to build new systems or upgrade existing ones.

Small and Energy-Efficient

The other models are the X4 9350e and the 9150e processors, whose calling cards are that they are highly energy-efficient and take up a small amount of space. These processors are intended for computer users who need high-end processing power for video editing, photo manipulation, and similar tasks.

All three processors are optimized for multi-threaded applications, such as high-end business applications, media-based processing, and gaming. The 9350e offers a clock speed of 2.0 GHz, and the 9150e runs at 1.8 GHz. Prices are expected to be $235 for the BE, $195 for the 9350e, and $175 for the 9150e.

All three chips use AMD’s 65-nanometer technology. Later this year, the company is expected to release 45-nanometer processors, which rival Intel did last year.

AMD and Intel

AMD, which has posted six straight losing quarters, received some mixed news Tuesday from market researcher iSuppli about its battle with Intel.

The research firm reported that AMD’s share of the global microprocessor market fell one percent in the first quarter to 13 percent, compared to the final quarter of 2007. But compared to the first quarter in 2007, its share was 2.2 points higher. So AMD’s overall progress took a bump, but it has a slightly better market position compared to a year ago.

A year ago, AMD’s market share was 10.9 percent, then hit 14 percent before dropping to 13 percent in this year’s first quarter. There are indications that about half of its increase…