Microsoft jumps into medical search via acquisition

Microsoft announced plans to acquire health care search engine Medstory on Feb. 26, positioning the deal as a strategic move into the consumer health market.

The Redmond, Wash.-based software maker, best known for its Windows operating system and Office productivity tools, said that the deal not only immediately widens its footprint in the health care segment, but also reflects a long-term commitment to development of a “broader consumer health strategy.”

Financial details of the deal were not disclosed by either company.

Medstory, based in Foster City, Calif., has posted a beta version of its health care search engine online, which promises to return more intelligent results than traditional Web scanning tools. By synthesizing user search requests within the context of health care, Medstory claims it can provide people with far more relevant information than they might uncover using generalized tools, such as Microsoft’s own MSN engine.

While the company has focused its efforts on health care thus far and claims to have loaded its engine with related information via close work with a number of medical organizations, the firm indicates on its Web site that it may eventually branch into other search arenas.

Microsoft officials offered few details about its plans for Medstory but reported that the company’s employees will join its Health Solutions Group, a recently launched division that oversees its product development efforts in the health care sector.

If the deal is closed, Dr. Alain Rappaport, Medstory’s founder and chief executive, will take on the role of general manager of health search in Microsoft’s Health Solutions Group.

In further positioning the deal, Microsoft cited increasing demand among consumers for health-related information online. The company pointed specifically to a study published in Oct. 2006 by the Pew Internet and American Life Project which found that 8 million people currently turn to the Web for such health care data with 22 percent of those responding to the report stating they find existing resources to be insufficient.

“We’re focused on enabling people to make the best decisions,” said Peter Neupert, corporate vice president for health strategy in Microsoft’s Health Solutions Group. “We were impressed with the ability of Medstory’s unique technology to organize and surface the most relevant online health content, which empowers consumers who are trying to find the right information about an important life event.”

The Medstory deal does not represent Microsoft’s initial foray into the health care field. In July 2006, the firm bought health care software maker Washington-based Azyxxi for an undisclosed amount of money. Azyxxi’s applications specifically promise to track and update changes to patients’ electronic records in real time.

Microsoft also maintains a research and development partnership with Medstar Health, a nonprofit health care firm that operates seven hospitals in the Mid-Atlantic region.

As part of the Medstory deal announcement, Microsoft launched its Connected Health Framework Architecture and Design Blueprint, which it has tabbed as an “extensible architectural foundation” to streamline interoperability and integration between existing health care applications. The software blueprint will be offered at no charge to government and health care organizations worldwide, the company said.

The software maker further identified the plan as a “real-world model” for health care companies attempting to adopt SOA technologies to help pull together disparate health care systems.

In addition to the architecture, Microsoft introduced its Health Connection Engine, a set of Web services tools built around industry standards, that also promises to allow medical organizations to foster interoperability in their IT operations.

As proof of its existing capabilities in the health care filed, Microsoft detailed work it has done with the Menninger Clinic, a Houston, Texas psychiatric hospital, to help the facility centralize its clinical information systems. Hospital officials claim to have cut paperwork by 25 percent already using a new internal system based on Microsoft’s Office SharePoint Server 2007 and Office InfoPath 2007.