The Wall Street Journal reported on October 7 that Microsoft has signed a letter of intent to acquire an Israeli text-analysis vendor, Equivio.

The Journal said Microsoft may pay $200 million for the startup.

Equivio has been working with Microsoft technologies, including Windows XP, SQL Server and SharePoint Server, since 2006, if not earlier. The company develops text-analytics products for legal and compliance e-discovery tasks. Its main product is Zoom "a court-approved machine learning platform for the legal area."

"Zoom organizes collections of documents in meaningful ways, while quantifying and visualizing the decision space. So you can zoom out for the big picture. Or zoom in to find just what you need."

According to Equivio's web site, the company's users include the U.S. Department of Justice, the Federal Trade Commission, KPMG, Deloitte and "hundreds" of law firms and corporations. Equivio has a network of more than 80 "e-discovery service providers," the site says.

Given Microsoft's work in machine-learning , intra-company document search and governance/compliance, Equivio seems like it might be a good fit. Because of its overseas location, an Equivio acquisition would fit with Microsoft's strategy to buy companies located outside the U.S. to use up some of its overseas cash .

Microsoft officials declined to comment on the alleged acquisition.