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Summary:

No one company can be all things to all people — not even Google. Even the search giant has an Achilles heel, one that is quite near and dear to its core business: the rise of vertical search engines.

Written by Sramana Mitra

Does Google not, like everyone else, have an Achilles heel?

Before I attempt to answer that question, let me just say right up front that when it comes to this topic, I am highly biased. I want Google to have competition.

Biased or not, however, I have found a few vulnerabilities in Google’s relentless march to success. The most significant of those is the increasing verticalization of the web. Or more specifically, in the rise of vertical search engines.

Here’s an example.

You are looking for a software engineer job in Palo Alto, Calif. If you insert this query into Google, you will mostly turn up offers to take you to job boards and job search engines like SimplyHired, Dice, and others that are matched based on keywords.

Google, however, doesn’t know that you would consider jobs within a 25-mile radius — that nearby Menlo Park, Redwood City and Mountain View fall within your realm of possibilities as well.

Now try this query on Indeed.com, a job search engine that collects listings from all over the web. You can specify the radius of your search. The engine would offer to filter by company, city, job type, etc. making your job search experience richer, more precise.

Similar dynamics exist in other major verticals — travel, real estate, auto, health, etc.

Google has so far stayed focused on horizontal, generic search with a simple, one-bar user interface. And it has brought them a remarkably long way.

However, as users get more sophisticated, they are discovering brands that offer richer user experiences customized to the dynamics of the vertical.

Investors have poured a lot of money into these vertical search engines. Within the “jobs” category alone, more than $70 million has been funneled into Indeed ($5 million from Union Square Ventures & NYT), SimpyHired ($17.7 million from Foundation Capital and News Corp.), and Jobster ($48 million from Trinity, Mayfield, Ignition, Reed Elsevier). And the “online jobs” market is expected to be worth $10 billion by 2011, which explains why so much money is chasing it.

Indeed.com has over five million unique users, indicating that the dynamics of the entry point to the web are changing. A recent roll-up deal led by Kayak in the travel vertical, which I discussed in my Forbes column, highlights the ambitions of newer players to build independent large companies. Kayak acquired SideStep, bringing together over 12 million unique visitors and $85 million in revenues.

So what is likely to be Google’s response? Build? Buy? Abstain?

According to VC Gus Tai over at Trinity Ventures, “Google will fail if they try to do separate vertical brands,” he said. “It’s like Wal-Mart vs. Tiffany. It’s about a deeper brand experience that Google can never offer.” Gus knows. He was on the board of Blue Nile, an online diamond jewelry brand that took on Amazon and eBay and built a business worth more than $300 million a year.

Conceivably, the verticalization we saw in e-commerce will now get repeated in search. Google will, of course, remain a very large search engine company with a huge market cap. But other $500 million-$1 billion businesses will get built in each of the large verticals and will, within just five to seven years, give Google a run for its money.

I explored the “deeper” brand experience with Gautam Godhwani, CEO of SimplyHired. “We are focused on enriching the entire lifecycle of the user experience,” Godhwani said. “We not only want to help candidates search for jobs, but do an outstanding job in understanding the content of the resume and be able to match it with the right opportunities.”

Imagine a day when you have your resume posted on SimplyHired, and even when you are not looking for a job, highly relevant opportunities are presented to you by your Careerbot. “We are only 10-to-15 percent along the way to our vision,” Godhwani said. SimplyHired powers job search for over 3,000 sites, including MySpace and GigaOM.

Indeed’s CEO Paul Forster likes the idea of a roll-up in the jobs category, but said no concrete discussions have yet taken place. I offered both Gautam and Forster the idea of LinkedIn as an interesting possibility around which to roll up the category. (LinkedIn has already built critical mass with a 2008 projected annual revenue of $100 million.)

At the back of my mind is a vision that is much bigger than vertical search. It is Web 3.0, a summation of context, community, commerce, content, vertical search and personalization.

In the end, new brands able to build deep, rich, highly personalized Web 3.0 user experiences would become Google’s real competition.

I am eagerly waiting for these brands to emerge.

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  1. Good post. I am glad there are competing search engines, this will just push Google to do a better job. With advanced search features, Google also can do whatever the others are doing and you can specify a location based search as well. Also, if Google searches based on our location like it does in Google Maps, where it remembers your current location, then this advanced search feature won’t be necessary.

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  2. Dimitrios Matsoulis Tuesday, January 15, 2008

    It is not easy for Google to keep its huge share of online searches in the changing world of the internet. The post was very succesful in describing that changes occur as users become more sofisticated and rely more on the net as a tool for their activities. I think the key is to be specialised to avoid the full wrath of Google, but not too much in order to have a wide enough base. As stated in the post, travel and jobs are ideal for this.
    http://electronrun.wordpress.com/

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  3. test

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  4. The major weak spot is the promise of the future of people power. Things like “Ask Sunday” or “Mahalo” or “Now now” are either people powered or “crowd sourced”

    The more technology allows for all of us to contribute almost real-time, the more the “algorithm” will reveal its limitations.

    W00t.

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  5. seems vertical search is future not Google!

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  6. google base, IT jobs in palo alto :

    http://www.google.com/base/search?a_n0=jobs&a_y0=9&gl=US&hl=en&nd=&showrefine=&q=&btnG=Search+Jobs&a_n2=job+industry&a_y2=1&a_o2=0&a_v2=it+-+internet&a_v2=&a_n5=job+type&a_y5=1&a_o5=0&a_v5=permanent&a_v5=&sl=true&a_n1=location&a_y1=6&a_o1=0&a_t1=30&a_v1=palo+alto%2C+CA&a_n3=job+function&a_y3=1&a_o3=0&a_v3=&a_v3=&a_n4=employer&a_y4=1&a_o4=0&a_v4=&a_v4=&a_n6=education&a_y6=1&a_o6=0&a_v6=&a_v6=&a_n7=salary&a_u7=usd&a_y7=8&a_o7=4&a_v7=&a_f7=&a_t7=&a_n8=experience&a_y8=1&a_o8=0&a_v8=&a_v8=&scoring=r&us=0

    the question is why they have paused on marketing or pushing googlebase. not enough people upload to it, and not enough people search using it. I think most information holders (other jobs sites) don’t want to give google all of their data. and normal people don’t want to post on there because it seems obscure and geeky.

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  7. for sure, a ‘vertical’ search is where a new search engine can provide a much better user experience than Google. We are seeing a strong uptake in use of our kid-friendly search engine Quintura for Kids on http://kids.quintura.com

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  8. On indeed.com

    The location australia could not be found.

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  9. Google can buy these companies at a certain point.

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  10. I too would like to see Google have some decent competion but I am afraid I have to disagree with you on where it will come from. I think that Google arose from and continues to dominate due to the public’s need for a single go-to place for the majority of their search. Sure, it won’t work for absolutely every vertical but it is great for most other things. Even for the verticals, I think you might find that a lot of people start on Google, relying on it to point them to the best website for the vertical search that they wish perform. So I don’t think that vertical search engines will upset Google nearly as much as you hope – no more than Blue Mile has hurt Amazon really, probably even less.

    I think Google’s killer is more likely to come from an alliance between one of the other major search engines and one or more of the dominant social networking sites (Facebook, Bebo, LinkedIn etc), but not in the way that most people have been talking about. I have posted more about this on my blog but in a nutshell, the integration could be effective with three ‘simple’ features:

    1)A tab for results tailored based on your profile(s) on social networking site(s) and the contributions of these sites to your APML file;
    2)A simple button on the Search results page that lets you turn your unresolved queries into questions for (selected members of) your network plus anyone who has subscribed to answering questions on that topic;
    3)The ability to do web search with the above two features, either directly on the search engines site or within your social networking sites.

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