Last week, Microsoft announced plans to buy health search engine Medstory. More than just a buy into a great product, that purchase might be Microsoft's secret weapon into winning the search wars.

As a vertical engine, Medstory's search functionality is fantastic. It's a genius at showing health material and weeding out non-health results -- as a search for an ambiguous term like "wine" will show. When I ran that search, the engine was great at avoiding non-health "wine" results (like results for wine stores or wine recipes); non-health listings only seemed to sneak in around results page 90. (On searches around medical personalities, though, Medstory's filtering looked a lot weaker.)

On top of its excellent relevance, Medstory is also spectacularly effective when it comes to granularity. Along with standard specialty searches like audio and video, Medstory allows searchers to drill down for items like drugs, experts, and even genes that relate to a keyword.

But Medstory's true value only begins with what it offers as a health-search engine. It will undoubtedly make a killer app within MSN Health & Fitness, but that's just the start. It also looks like its technology will be copied across all of the vertical content sections within the MSN portal, like MSN Autos, MSN Music, and MSN Money. Currently, those content areas offer only a site search within the content area itself, and access to run a non-specialized search on Live.com. Visitors to those content sections would gladly welcome -- and use -- a Medstory clone that's geared towards their topic of interest. And that new wave of vertical search traffic would create many more opportunities for highly targeted search advertising.

Medstory, meanwhile, is hardly ignorant of its potential for expanding beyond health alone. As CNet's Carolyn McCarthy points out, "Medstory's Web site hints that health is only the first topic for which it plans to implement its... technology," and that "other 'complex fields' of inquiry may be on the way."

Even vertical search, though, might not be the ultimate goal that's on MSN's mind with Medstory. If there's anything that AdCenter has taught the world, it's that Microsoft is a master at taking the data it already has, and repurposing it into smarter search. A small army of Medstory clones will allow Microsoft to do just that, at a whole new level -- as it will contain a huge inventory of behavioral data on vertically-minded searchers and search queries. MSN can use that data to deliver more relevant organic results, and better ads, within vertically-minded searches on Live.com itself.

Indeed, as CNet's Ina Fried reported Tuesday, Microsoft Chief Software Architect Ray Ozzie has made clear his plans to push Medstory out "within Microsoft's broader Live search engine;" and that, in Fried's words, "vertical search pages are just one of the possibilities." Presumably, Live.com is another one of those "possibilities."

All of this bodes extremely well for Live.com, as MSN pushes to move from search underdog to leader of the pack. More relevant listings -- i.e., better-targeted listings --mean more clicks, as Yahoo's post-Panama clickthrough surge has shown us. And it's not much of a leap from there to saying that more relevant listings generate increased traffic overall, long-term.

And so in buying Medstory, MSN has purchased a great asset within the health market; the next big thing in vertical search overall; and a golden ticket to making more money off of advertising within Live.com. I'd say that isn't bad for the purchase of a tiny search engine.

Am I 100% right about where Microsoft wants to go with the Medstory purchase? I think I am, but we'll have to wait and see. But I can guarantee that, wherever the planned purchase goes, Medstory is just the beginning of the story.