Microsoft to Acquire Medstory

Microsoft is purchasing Medstory Inc., a manufacturer of search software for the healthcare market that uses artificial intelligence techniques to sift medical information in journals, government documents and other on-line sources. Medstory will become part of Microsoft's Health Solutions Group. The terms of the deal were not released. Last year, Microsoft bought Azyxxi, a maker of healthcare software that displays patient information. There is increasing demand for online healthcare information, as evidenced by last week's expectation-surpassing quarterly report by WebMD, the biggest health site on the Internet. That demand is driven primarily by aging baby boomers. Microsoft will have ample competition in the space: San Francisco company Healthline provides health search services, Google is developing a health information search tool, and former AOL CEO Steve Case is launching a healthcare portal called Revolution Health.

Sources: New York Times, Information Week, News.com, Wall Street Journal
Commentary: Microsoft to Purchase Azyxxi Healthcare Software Technology • Google Preparing Health Portal • Can Health Grades Inc. Compete With WebMD For a Share of the Health Information Industry?
Stocks/ETFs to watch: Microsoft Corp. (MSFT). Competitors: Google Inc. (GOOG), WebMD Health Corp. (WBMD), Health Grades Inc. (HGRD), Time Warner Inc. (TWX). ETFs: iShares Goldman Sachs Technology Indx (IGM), iShares Goldman Sachs Software Index (IGV), iShares S&P Global 100 Index (IOO)

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