Microsoft bids $1.2 billion for search firm Fast

By John Acher and Daisuke Wakabayashi

OSLO/LAS VEGAS (Reuters) - Microsoft Corp bid $1.2 billion to buy Norwegian business search software company Fast Search & Transfer in a deal focused on helping corporations manage and sift through their own files, a growing market also targeted by Google Inc.

The world's largest software maker offered to pay a 42 percent premium for Fast, the second-largest search provider that lets companies comb internal corporate documents, data and other information. Fast also sets up a search engine used by companies to help consumers navigate their Web site easier.

Fast said its board unanimously recommended that shareholders accept the Microsoft offer, which values the fully diluted equity of Fast at 6.6 billion Norwegian crowns, or about $1.2 billion. It has been viewed by industry analysts as a takeover candidate.

"The problem businesses have around the world is they generate lots of files and they don't know where they put them," said Kim Caughey, senior equity analyst at Fort Pitt Capital, which holds about 203,000 Microsoft shares.

"Microsoft has had desktop search for a while, but it really does need a more corporate approach to tracking and storing."

In recent years, larger technology industry players such as Google, International Business Machines Corp and Microsoft have started to move into the corporate, or enterprise, search market. This has led to flurry of acquisition activity.

The deal would spread Fast's search technologies more widely around the world, Fast Chief Executive John Lervik said. Fast posted a third-quarter loss of more than $100 million on revenue of nearly $36 million. Its clients include Dell Inc and Walt Disney Co.

Fast shares, which were suspended all day on Monday, jumped to the bid level of 19 crowns per share and then eased off to 18.80 crowns. The bid price is 42 percent higher than Fast's closing share price on January 4, the last day on which it traded.