Gunning for Google in Search

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The technology behind semantic search engines has been in development for more than 30 years and is just now coming online in a form that consumers can use. In May, Powerset launched a version of its product that only searches through articles in online encyclopedia Wikipedia. Cognition launched a version of its search engine a year ago that searched through legal, health, and wiki documents.

Incorporating New Technologies

Both Google and Microsoft are incorporating some aspects of the technology in their search engines. But while the small, venture-funded firms have little traction in comparison, they believe they have the edge in the long term. "This is not easy," says Scott Jarus, CEO of Cognition Technologies. "It took us 10-plus years to develop the underlying technology."

Of course, should semantic technologies prove to be truly game-changing, there's nothing stopping Microsoft or Google from buying one of these small firms. Google generates around a billion in free cash flow per quarter. Microsoft does, too, and with its deal with Yahoo looking dead, the software giant has a spare $46 billion lying around. In fact, Jarus sees the future of semantic search as becoming incorporated into the big search engines, likely through acquisition. "I think what eventually happens is semantic search gets bolted into the general-purpose search," says Jarus.

What Microsoft or Google cannot simply buy is the open-source search effort led by Wikipedia co-founder Jimmy Wales. Known as Wikia Search (BusinessWeek.com, 1/7/08), the engine incorporates community input with open-source computer programs. The goal, says Wales, is to eventually have a product that rivals whatever Google can develop—using a combination of algorithmic results ranked, in part, with the help of users—but be easily incorporated by large sites across the Web, making Web search ubiquitous rather than largely confined to single sites. "We think it is going to take a while," says Wales. "But, if we are successful, search will become a utility service that everybody offers rather than a single dominant player."

Microsoft's Specialized Effort

Microsoft is taking another tactic to chip away at Google's supremacy: specialization. The company has recently focused its efforts on shopping search, launching a Live Search cashback product (BusinessWeek.com, 5/21/08) that gives users rebates on items they buy when searching on the site. Microsoft only charges participating advertisers when users make purchases, largely eliminating the barrier for Web marketers to try the service since they are, in essence, only paying for sales. "Our goal is to make Live Search the most rewarding commercial search destination on the Web," said Microsoft founder Bill Gates in a statement.

If Microsoft is successful, it will gain a share of the most lucrative queries on the Web because searches clearly tied to commerce often command the highest prices, says Microsoft's Goldberg. So, for example, a search for "iPhone accessories" may command more than a query for "who was the 23rd President?" "Commerce queries are about 30% to 40% of all queries, but they are a higher part of the revenue," says Goldberg.

Microsoft could use a shopping success to encourage users and advertisers to try other specialized search sites focusing on areas such as entertainment, navigation and local search, and research. "We believe that search will become more and more task-centric," says Goldberg. "The experience will look dramatically different than it does today and it will be customized around the tasks that users are trying to complete online."

Google's Search Relevance

Maybe. The success of Google's universal search product challenges the wisdom of Microsoft's specialized approach. Though topic-specific search engines have had some success in particular categories such as health, travel, local search, and shopping, none have come near the popularity of Google's one-site-fits-all offering. "We want to be very easy and very fast," says Google's Manber. Aside from the health space, Google's category-specific search features are all behind the scenes. Consumers see one central site.

Google won't cede its lead in search without a fight. The company sees search as central to everything it does and has "hundreds and hundreds" of engineers dedicated to improving its search relevance and product, says Manber. Google also has the strength of its brand name that can keep people going to its engine, even if there is a product out there capable of providing slightly more relevant results.

Still, brand name and money aren't enough to keep a new, innovative company from supplanting a leader. Just ask Yahoo.

Holahan is a writer for BusinessWeek.com in New York.