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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.