It failed to acquire Yahoo's search business -- or at least that's what Yahoo has said. So now Microsoft has to rely on its own resources to come up with a plan for moving forward in search; and to do that, it's setting up a second laboratory.

This morning, Microsoft publicly announced it will be opening what it's calling a "Search Technology Center" somewhere in Europe at some point next year. It did not say exactly when or exactly where, though with the company's slate of acquisitions in the search space already hailing from all over the continent, there are several intriguing candidates.

Although Microsoft's announcement was made this morning in Cannes, Oslo, Norway may be high on the company's list. That's where one of its most important acquisitions in the search space is located: Fast Search & Transfer, the manufacturer of a groundbreaking behavior-monitoring search platform for enterprises. That platform already enables big businesses that produce and manage a lot of text to use tracking data gleaned from employees to enhance the relevancy of documents retrieved during queries.

But that's a product sold to businesses, not a query line served up through a public Web page like Windows Live Search. In a statement sent to BetaNews this morning, Microsoft said that its new tech center -- wherever it ends up being located -- will be partnering directly with the Live Search team to develop "a highly relevant, localized, and interactive search experience" for online users. If FAST's behavioral algorithms are to play a role there, perhaps Oslo will be the center; but if FAST remains a professional platform, the new European STC might be running on a different track.

For the last two and a half years, Microsoft has already been operating an STC in Beijing. There, one of its key projects has been improved relevancy and experience for Live Search and the public Web, though some academic projects are also involved.

Back in February 2006, Microsoft acquired Paris-based mobile search technology provider MotionBridge. Since that time, the company has made some headway in building location-oriented search services for mobile handset users -- not just Windows Mobile -- although it's struggled with the problem of branding these services. Then in a deal completed last January, Microsoft acquired geographical search provider Multimap, based in London. That deal could also play into the company's expansion of mobile search services as well.

But if Microsoft's intentions with this new STC are to provide more transparency to European regulators, who may be questioning the efficacy of these acquisitions, the company may want to consider Brussels as a home base.