Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

1.2.07: In the shadow of Google, new search engines emerge

Posted by Richard Koman - January 2, 2007

By Richard Koman for SiliconValleyWatcher

A new year will bring new search engines to the Internet - for the first time in a long while - but with Google so dominant in the space, will these new players find substantial niches, unseat the giant, or simply be able to crack Google's stranglehold? The New York Times profiles several up-and-comers in a space that in 2006 most people thought was owned by Larry and Sergey.

NYT: In Silicon Valley, the Race Is On to Trump Google

We first read about Powerset when VentureBeat reported the company was receiving gobs of VC funds. They've raised a total of $12.5 million from Foundation Capital, Founders Fund and several angels.

SVW: Powerset says it can knock off Google

As unlikely as it seems, many millions more are rushing in to compete with Google.

“There’s definitely a segment of the market that thinks we are crazy,” said Charles Moldow, a partner at Foundation Capital, a venture capital firm that is Powerset’s principal financial backer. “In 2000, some people thought Google was crazy.”

That mindset - more than any hardnosed evaluation of a startup's technology - may be what drives venture capitalists to keep playing in search. Google repeated the Silicon Valley mythology: Stanford, garage, modest start, groundswell of uptake, going public, the king is dead, long live the king. There may be big money to be made in niche search - but the dream is all about public search, about being a household name, about being the next Google. Short of that, getting bought up by Google sounds pretty darn good, too. For the right company (you know who), Google will pay big. That was one new revelation of 2006.

“We expect to be one of the top three search engines,” said Riza C. Berkan, the chief executive of hakia. It is a bold claim, given that hakia’s technology is not yet ready for prime time, and Mr. Berkan readily concedes it will take time to perfect it.

“It is hard for me to believe that anybody thinks they can take Google’s business from Google,” said Randy Komisar, a venture capitalist who was once known as Silicon Valley’s “virtual C.E.O.” for his role as a mentor to scores of technology firms. “But to call the game over because Google has been such a success would be to deny history.”

The Times notes that in the age of Microsoft's hegemony, companies did all they could do avoid competing with Redmond, but here we have a bevy of companies ready and willing to stake a claim to Google's.

In the Internet search industry, “you earn your right to be in business every day, page view after page view, click after click,” said Barney Pell, a founder and the chief executive of Powerset, whose search service is not yet available.

And, as Google - valued at $141 billion - marches on to compete with Microsoft, they may be taking their eye off the search engine, just as Excite and Lycos did back in the day. .

“The more Google starts to think about taking on Microsoft, the less it is a pure search play, and the more it opens the door for new innovations,” said Mr. Moldow, the Foundation Capital partner. “That’s great for us.”

Regardless, technologists continue to work on search and investors continue to pour millions into startups simply because search is not yet good enough and Silicon Valley will never trust that the dominant giant will be the one to perfect it. Unlike a Web 2.0 solution for bookmarks, search is crucial to all users and so complex it will never be "perfect." The basic human urge towards technological improvement and entrepreneurial endeavor are perfectly aligned in the the search startup. As Esther Dyson says:

“I love Google, but I love the march of history.”

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