The Next Big Thing In Search Isn't Big
July 30, 2009
While Microsoft horse trades for search share, start-ups offer new ways to drill deep.
BURLINGAME, Calif. -- Microsoft isn't the first company to turn to Web portal Yahoo! in an effort to take its search service to a bigger audience. It is, however, the biggest company to do so. And that could mean the days of new search ideas springing out of academics' heads and into everyday life are coming to an end.
Just talk to former Lycos Chief Bob Davis. Davis tried to sell Web portal Lycos to Barry Diller's USA Networks, but the deal fell apart in 1999 in a cycle that somewhat echoed Microsoft's ( MSFT - news - people ) bid to buy all of Yahoo! ( YHOO - news - people ) last year. Ultimately, Davis led Lycos to a sale to Terra Networks of Spain in May 2000 for $5.4 billion.
The parallels don't end there. Early on, Davis says, much of the traffic to Lycos' search engine came from Yahoo! At first, the portal referred its users to the search service for free. Later on, Davis says, Lycos agreed to pay Yahoo! for those referrals. It's a deal that echoed the ones Yahoo! later struck with Inktomi, which it eventually purchased, and Google ( GOOG - news - people ), which vaulted the then-nascent search service into the mainstream.
Now it is mighty Microsoft--rather than some little-known start-up--that is counting on Yahoo! to do the same thing for its search service, Bing, as the Redmond, Wash.-based software vendor struggles to make headway against Google. Davis, now a partner at venture capital firm Highland Capital Partners, calls the arrangement a good one for Microsoft. "I think it's a great deal for Microsoft, a fantastic deal for Microsoft," Davis says. "It's probably a necessary deal for Yahoo!"
The deal, however, doesn't herald the arrival of any radical new technology for navigating the Web. In part, that's because the economics of remaking the way users search the Web have become so daunting. For starters, most users are now satisfied with the state of search technology, Davis says. Even assuming a start-up can develop a technology innovative enough to make a difference, the cost of indexing the Web--which now includes billions of pages--is far higher than it was a decade ago.
Davis sees opportunities for niche-oriented services that solve specific problems, however. Highland has invested in a company called FanSnap that lets users search for tickets to sporting events and concerts. Other niche search start-ups include Kayak in travel and Trulia in real estate. Such tailored search services can connect users with more relevant results than services that try to boil the entire Web down to a single search box.
FanSnap provides a good example of how that works. Search Google for Giants baseball tickets and you'll get a page of text listings with results from competing ticket vendors. However, "when fans are searching for tickets they don't really want a list of who is paying to be shown on the list or who is really good at search engine optimization," FanSnap Chief Executive Mike Janes says. "They want to see who has the tickets they want."
Unlike Google, FanSnap can tailor its results to the job at hand. Search for Giants tickets, and FanSnap delivers listings for upcoming games. Pick a game, and FanSnap takes you to results integrated into a map of the venue, AT&T Park. Now users can pick the price they want to pay, how many tickets they need and where they want to sit. Rather than indexing the Web, as Google does, FanSnap has integrated feeds from more than 50 ticket vendors into its service. It's both an easier problem than trying to index the entire Web from scratch, and a very different one.