Microsoft moved to bolster its position in enterprise search Tuesday with a $1.2 billion offer to acquire Norway's Fast Search & Transfer.

The deal, endorsed by Fast's board of directors and two largest institutional shareholders, represents a 42 percent premium to Fast's closing price on the Oslo Stock Exchange on January 4.

The acquisition could flush out suitors for Fast's rivals such as Autonomy, based in Cambridge, United Kingdom, and Endeca, based in Cambridge, Massachusetts.

Endeca, backed by investors including Bessemer Venture Partners, Venrock Associates, and In-Q-Tel, the venture arm of the Central Intelligence Agency, provides services for Boeing, Ford, and the Department of Homeland Security.

Autonomy, traded on the London Stock Exchange, has a client roster that includes Coca Cola, the New York Stock Exchange, and the U.S. Department of Energy.

In a conference call, Microsoft executives acknowledged that they had been monitoring other enterprise search companies before pulling the trigger on the Fast acquisition.

In mid-afternoon trading, shares of Microsoft fell $.41, or 1.2 percent, to $34.20, while Fast shares tacked on almost 41 percent in Oslo to 18.80 Norwegian kroner, close to Microsoft's offer of 19 kroner per share.

In recent months, Fast has sought to restructure its operations in a bid to restore profitability.

In the third quarter, Fast lost more than $100 million on revenue of about $36 million.

Google dominates consumer search, scoring 66 percent of the market in December, according to Hitwise, compared with 21 percent for Yahoo, and 7 percent for Microsoft. Though Google offers an enterprise search appliance, no company has come to dominate that fragmented market.

"Enterprise search is becoming an indispensable tool to businesses of all sizes, helping people find, use and share critical business information quickly," Jeff Raikes, president of the Microsoft Business Division, said in a statement.

Fast Search & Transfer is a Red Herring 100 winner.