I recently met with Raul Valdes-Perez, the CEO and co-founder of search engine company Vivisimo. It is not a well known company but it is one that is doing very well, and doing it very profitably--all without any venture capital money.

I first met Mr Valdes-Perez nearly two years ago. At the time, this Pittsburgh, PA based company was ready to take on Google and the others with its unique technology that can index information into subject groups or clusters, by automatically detecting the underlying taxonomy within a set of information, on-the-fly.

Founded in June 20002 by Carnegie Mellon University researchers, Vivisimo offered an new approach to search. I became intrigued by the promises of Vivisimo's technology. I wondered if it could be used in other ways too; if it might reveal emerging social trends before they become visible in traditional ways.

And the clustering approach always seemed much more useful for researching various topics. For example, by seeing the various groupings of a term, i.e.. "bond" which could be James Bond, or a chemical bond, or a family bond--you could find unexpected, serendipitous connections to a term without requiring serendipity to reveal them.

I would sometimes fantasize about using Vivisimo's technology for local search sites. I own the domain names SearchSiliconValley.com and SearchBayArea.com, and the same "searchxyz.com" format for the San Francisco Bay Area counties and towns. Vivisimo's spider is not designed to crawl the entire web, but it is very good at crawling thousands of web sites, perfect for specialized applications, such as indexing a specific region. Clustering the results would be a great way to quickly find all the local Mexican restaurants, or public libraries, and many other uses.

One of these days I might get to try out Vivisimo's technology for such an application, but in the meantime the company has been doing very well in the enterprise search market, especially in government applications. Earlier this year it won a prestigious contract, following stiff competition, to provide the search technology for FirstGov.gov, the official portal for the US government.

Search results are from government web sites and also from related web sites outside of the government, and Vivisimo has been winning considerable praise for a much improved search experience.

I was glad to hear that Vivisimo was doing well. And Mr Valdes-Perez was kind enough to remind me of some advice I gave him a while ago, when Vivisimo was launching Clusty.com, the consumer version of its technology, and dreaming of taking on and winning against Google and the others.

The advice I gave was that the noise level in the consumer search space would soon become very intense and would require massive amounts of money to stay visible. For a small company such as Vivisimo, it would not be a game it could play without having to raise considerable capital. For Vivisimo, the opportunities would be in more specialized approaches where it could offer unique advantages, and fly under the radar while the big companies battled for the prized consumer markets.

And that's what the company has been doing. Apart from its FirstGov and other government related business, it is also doing well in the Life Sciences arena, where finding clusters of information is exceedingly important. And there are other such opportunities in other industries.

Clusty.com did not usurp Google, but it is a very good business for Vivisimo. "Clusty gave us experience in creating simple user interfaces. Too often, our competitors in the enterprise search space pay very little attention to the user interface, which makes their products difficult to use." says Mr Valdes-Perez.

Specialized search applications such as the FirstGov contract require specialized approaches unique to each implementation. FirstGov for example, requires at least 58 boolean terms for each search query. And the algorithm has to distinguish between different parts of the web page--not all dot-gov web pages are created or formatted in the same way.

The Google, Yahoo, Microsoft approach to search is far more general than the tuned, specialized approach taken by Vivisimo. And that means the search giants won't find it that easy to expand into the enterprise search markets.

Mr Valdes-Perez is also a critic of the behavioral technologies that the large search engine companies use to try and improve the search experience by collecting personal data. Clusty.com does not collect any user data which means that there can be no privacy breaches, accidental or subpoenaed.

"Users search based on their whims at the time, and not on past behavior. It is much better to provide a user with several options on what they are searching for and allow them to choose," he says.

That certainly makes sense to me. I hardly ever run the same search twice (except for ego surfing :-) so why collect my personalized search data?