Why Search? Of Course Search.
Typically, I would take such rave reviews with a grain of salt, chalking some of it to politeness - no one likes to hurt the chef's feelings about the meal they prepared. But we actually did a few user studies with folks we pulled off the street - people who didn't know us - and their reviews were pretty positive as well. Plus in this economic environment, investors are often times the toughest audience. Makes me think we might be on to something here....
With that, when I tell folks that we're building a new search engine, the typical response I get is a raised eyebrow and some form of the question "why search?" Rich wrote a while back about his reasons for wanting to get into the search business. Most of his reasons went into the technical challenges that go into the product and for smart guys like him and the rest of our team, that's reason enough.
Call me a bit more pragmatic though. My reasons for wanting to get involved in search are simple: it is THE best online business. In fact, it's the only media business online that has a pot of gold at the end of the rainbow. I've ranted on this blog many times about the disastrous state of display advertising, and won't re-state those arguments here. But I will cite an old blog post of mine at Topix where I went though the economics of online media.
In that post I noted "put simply, search pages earn $50 CPM while non-search pages earn an average of about $4 CPM site wide." That post was written about 3 years ago. Since that time if anything things have become worse for the display market. Social media gobbles up most of the page views and performs typically at well under $1CPM. Combine that with with the current economic climate and the display ad business is pretty much in shambles. Now you know why newspapers are in ther current death spiral: their ad model is broken.
The search ad model is however booming. Search engines sell leads - not page views. Leads that are only charged when actioned upon (i.e. clicked) and leads that are perfectly priced through an auction. And oh yeah, the leads are 100% trackable. This is the pinnacle of direct response advertising - and marketers (like me) LOVE direct response ads - especially when we can track it to the penny.
So why would I build a media site that did anything BUT search? It seems so simple. What doesn't make sense to me is why anyone in the media business would run away from this pot of gold?? If you make your bones monetizing eyeballs and ads, why wouldn't you SPRINT to the business that makes the most money for those eyes? That's the search business.
Of course search is also one of the hardest businesses to be in. There are technical and cost barriers to entry that make it a big bet on any new player. But in my mind, these barriers actually make it a BETTER place to compete - with every Tom, Dick and Harry excluded from playing, there's less noise from the riff raff in getting attention from the consumer. Besides if an 11 person start up like Blekko can figure a way around these challenges, you'd think others could as well.
There are also marketing challenges to overcome. In the past couple of years we've seen a few search start-ups launch and all fall flat on there faces (I don't need to list the companies here, you know who they are and, more importantly, they know who they are).
And if you fail to grab attention, there are no marketing cheats. Search engines don't get the benefit of SEO traffic and there's no ad arbitrage to play here. Nope, you need a product that stands on its merit, adds value to the user and delivers something different to the market. You can't go head to head with Google - you need to position yourself differently. This is what I like to call that good old fashioned marketing.
So yes, there are challenges. But what has me excited about Blekko and 2009 is I'm getting more confident that we're up to these challenges. Anyway, enough for now - you'll be hearing a lot more from us this year. In the meantime, suffice it to say that when anyone asks me "why search?", my answer is "Of course search."