For a while now Technorati has been in an interesting position. They own(ed) the blog search market. At the beginning, there were some competitors - Feedster, being the most prominent - and then the big boys Yahoo and Google jumped in and launched their respective products. Only one problem for them: their products didn't take. This is despite Google giving its blog search tool prime home page linkage and Yahoo doing the same. Now Google's product is part of the "more" features list and Yahoo, well, I think their version broke and rather than fix it, they just took it down. (No, seriously, try to find it).
So Technorati wins and all is well, right? Well, no. Even being the leader in the market didn't help the fact that most/ all of their searches (i.e. vanity searches) on their site are unmonetizeable. Google and Yahoo can cover all sorts of unmonetizeable searches in their index because they have so many monetizeable ones. But a search engine geared to personal/ vanity searches doesn't have that luxury.
So what does Technorati do? They give up on the blog vertical, and try to index everything in an effort to compete with the big guys. I've already written about how I believe that Google is now the Kleenex/ Q-Tip/ Xerox of the search space, so efforts to take it head on will actually only re-enforce its brand and strengthen its market. So to me, giving up on an area of the market where you have a lead - any lead - doesn't make long term success.
Only time will tell I suppose....