Jan. 8 (Bloomberg) -- Microsoft Corp. agreed to buy Norway's Fast Search & Transfer ASA for 6.6 billion kroner ($1.23 billion) to add software products that help companies mine, store and manage data.

Microsoft, the world's biggest software maker, will pay 19 kroner for each Fast Search share, the companies said today. The offer is 42 percent more than the closing price on Jan. 4.

The purchase of Oslo-based Fast Search will give Microsoft tailored search programs for customers such as Deutsche Telekom AG and United Parcel Service Inc. The features add to what the Redmond, Washington-based company offers in its Office SharePoint Server, which garnered more than $800 million in sales in the year ended June 30.

``This is an area of search where there's no clear winner, so this is a way for Microsoft to hit competitors where they ain't,'' said Charles Di Bona, an analyst at Sanford C. Bernstein & Co. in New York, who advises buying Microsoft shares. ``You're seeing Microsoft push into this area hard, and it's very complementary to what they do in server software and search.''

Fast Search rose 41 percent to close at 18.8 kroner in Oslo. The stock lost 9.6 percent last year, and fell 37 percent in 2006. British rival Autonomy Corp. jumped 9.4 percent to 990 pence in London. Microsoft fell $1.16 to $33.45 at 4 p.m. New York time in Nasdaq Stock Market trading.

SharePoint Growth

SharePoint, the fastest-growing piece of software by sales in Microsoft history, competes with programs from International Business Machines Corp., Oracle Corp. and SAP AG. Google Inc., which dominates consumer Internet search, has been trying to expand into the corporate market with machines and software for scanning business networks.

A rival bid from a company such as Oracle or IBM is possible, said Arild Nysaether, an analyst at Fondsfinans AS in Oslo.

Oracle already offers software for searching databases, e- mail and business-management programs. Oracle spokeswoman Deborah Hellinger didn't return an e-mail or call seeking comment. IBM spokesman James Sciales declined to comment.

Sole Bidder

Microsoft was the only company that Fast Search talked to, Zia Zaman, a Fast Search executive vice president, said in an interview. The fact that the company's board and major shareholders are backing this acquisition will probably deter any other interested bidders, he said.

Microsoft plans to carve out a share of the business-search market, building on corporate demand for its Windows and Office software. Besides handling search, SharePoint lets corporate workers set up Web sites, organize documents and collaborate on projects.

The existing search features in SharePoint are one of the biggest reasons customers buy the software, Microsoft said in November. Without them, it can be harder to find data within a corporate network than to locate information on the Internet, the company said.

``You can find football scores online in five seconds, but it can take five hours inside a company to find last year's business plan,'' Jeff Raikes, president of the Microsoft Business Division, said on a conference call.

Fast Search's products are more ``specialized and robust'' than the current features in SharePoint, Di Bona said.

Beyond Office

Raikes's unit, Microsoft's largest in terms of sales, is looking for new ways to grow since many existing customers already own the basic Office suite of word processing, spreadsheet and e-mail software.

The company's flagship Windows operating system relies on growth in personal-computer shipments, which will probably slow to 12 percent worldwide this year from 15 percent in 2007, according to research firm IDC in Framingham, Massachusetts.

The purchase will be completed in the second quarter of 2008, Microsoft said. Shareholders with 37 percent of Fast Search's stock, including Orkla ASA and Hermes Focus Asset Management Europe, have already accepted the offer and the company's board unanimously backs the proposal, according to a statement sent through the Oslo Stock Exchange.

Goldman, Sachs & Co. advised Microsoft in the transaction, while Fast Search was advised by Merrill Lynch & Co.

Fast Search, which posted losses the past two quarters, has cut jobs to reduce costs and revive earnings. The company expects to be profitable in 2008. Fast Search formed a venture last year with Rakuten Inc., Japan's biggest Web retailer, to provide mobile search and advertising services in that country.

Fast Search reported a third-quarter loss of $100 million, after a loss of $26 million in the second quarter. The company, which started in 1997 and went public in 2001, had sales of $163 million in 2006. It posted a profit of $3.5 million that year.

Last month, Orkla demanded a special shareholders' meeting to overhaul the company's board and spur profit and growth. The initiative was also supported by Hermes. Before the offer announcement today, Orkla consented to an ``indefinite'' postponement of the meeting.

To contact the reporters on this story: Juho Erkheikki in Helsinki at jerkheikki@bloomberg.net; Dina Bass in Seattle at dbass2@bloomberg.net

Last Updated: January 8, 2008 16:03 EST