Microsoft has been pretty quiet on the acquisition front in recent months, one of its last major acquisitions being the Skype deal for $8.5 billion in May. But the software giant is once again on the hunt for new buys, announcing today the acquisition of VideoSurf, a San Mateo, California based intelligent video search company. Microsoft reportedly paid $70 million in the deal.

This acquisition is a step to further build out its web search tool Bing.  It also means Microsoft is looking to gain ground in the ​​online video sector, a segment Google’s YouTube currently dominates.

VideoSurf is a meta-search engine that lets users search the video database from YouTube, Hulu, CNN, TMZ, Metacafe, Fancast, and Comedy Central Dailymotion. The company claims to use patented algorithms for indexing images. The service was founded in 2006, and COO of Facebook, former Vice President Al Gore, invested in this California company as well. The search service is now likely to be included in the Bing search engine and Xbox platform.

“VideoSurf’s content analytics technology will enhance the search and discovery of entertainment content across our platform,” Alex Garden, Microsoft’s director of Xbox Live for the Interactive Entertainment Business, said in a statement. “This holiday we will launch voice search across our entertainment partners on Xbox Live. Over time, as we integrate VideoSurf’s technology into our system, we are excited about the potential to have content tagged in real time to increase the speed and relevance of the search results.”

VideoSurf would be the third company that Microsoft acquired in this year. The Skype deal was followed by the acquisition of enterprise risk management provider Prodiance.

Microsoft’s Game Plan with VideoSurf

The takeover will further enhance Microsoft’s own search engine, building out its strategy to compete with Google. The most logical move from Redmond is to incorporate this technology to improve search results for multimedia content.  It’s a growing area of interest for search engines, but it’s the ability to extend this out beyond search to include Microsoft’s other areas of focus means that the VideoSurf deal is a step towards the company’s long term goals as a media hub.  To this end, Microsoft said that the use of development VideoSurf is also planned for the development of multimedia platforms and the Xbox Live ecosystem of Xbox 360.

Microsoft also wants to use the content analysis of VideoSurf for the entertainment offered by the Xbox 360 and Xbox Live platform, which the company is aggressively marketing its efforts in this arena. Microsoft has signed an agreement with Verizon, Comcast, HBO and Epix, among others to provide video content from cable providers to its Xbox Live platform.

Personal Cloud Expands

Microsoft is expanding the personal cloud implementation into the living room.  The company recently teamed up with Comcast and Verizon to provide next level media entertainment.  Skype, the new Microsoft division, has added video chat capabilities for Facebook friends, running either from Facebook or Skype just by linking the two accounts.

Skype will also be integrated directly into the new Xbox 360 dashboard, with the ultimate goal of being the primary platform for calls within Xbox LIVE and Xbox parties. The personal cloud space is a growing area of interest for the major rivals in the consumer platform space, pitting Apple, Google and Microsoft against each other.  Microsoft’s been building its personal cloud strategy for some time now, and this is just another piece of the puzzle.