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February 24, 2005
Google Junior, Part III
Here's the last of my musings about all the new search wannabes out there (until more news breaks, that is). In previous posts, I've talked about the impact Google's IPO and continuing success has had on early stage investors, a group you might not expect. And I talked about my skepticism of new sites' ability to change consumer behavior even if they are technically better.
But there's a big category of startups being funded that I haven't focused on and that's so called "meta-search" companies. As a user, I've fallen in love with some of these sites. But as a skeptical journalist, I still wonder about the opportunity to build a big company here.
Meta-search is being thrown around a lot, but usually it refers to a company that's doing what Google did broadly for a certain type of Internet search. For instance, a site I used recently for the first time and fell in love with was SideStep.com. It browses all travel Web sites for flights, rental cars, and hotels. Travel is one of the most mature Internet applications so you might wonder why we need any more travel-related sites. But the fact that there are so many is what makes SideStep valuable.
I used to go to Expedia, Travelocity, Hotwire, and Orbitz every time I was making travel arrangements. No one site consistently had better deals. It was annoying and time-consuming. SideStep spiders all of those sites and really aggregates it all in one spot. Other comparison engines have claimed to do this before, but in my experience, no one so elegantly as SideStep and my flight was $50 cheaper than any I found on other sites. I will use it religiously from now on.
Startups are trying to do something similar across many verticals. FatLens, operated by IM2, Inc., recently got $8 million from Redpoint Ventures and Lightspeed Venture Partners to do something similar with event ticketing. It aggregates tickets from StubHub, eBay, Craigslist, and others. I recently did a story for BusinessWeek Online about buying hard to find tickets online so it? an area I know some about. I'm not sure this site has enough differentiation to make up for the jumpstart sites like StubHub and TicketsNow have. But there may very well be people out there that are looking for hard-to-find tickets enough, they would react the same way to FatLens that I did to SideStep. (My husband and I are Oakland Athletics fans?adly, that? not exactly a hard ticket to come by.)
But can companies like these really build big, standalone businesses? I still say it's not likely. Google, Microsoft, AOL, Yahoo and Ask Jeeves are all adding new features constantly. They've already got the audience, and there aren? big barriers to entry with any of these meta-search applications. And if any one of these startups does well enough to pull from the big guys, they'll get bought.
Danny Sullivan is editor of SearhEngineWatch.com, a Web site that follows the industry. I talked to him earlier this week and he shares a lot of my skepticism. He compares the big search engines to TV networks. No one is going to be the next ABC. You could be the next WB, but even that is a hard road. So at best you're building the equivalent of a strong cable station. And guess what? USA, MTV, and Nickelodeon are all part of the networksempire. Yes, VCs will obviously take acquisitions. But shouldn? they be shooting for more?
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