Monday 31 March 2008

Searching for corporate eyeballs

Much has been written about the business logic (perhaps out of desperation?) driving the proposed Microsoft-Yahoo merger, namely securing a bigger piece of the Internet search market now dominated by Google. A short article by Janice Fioravante, "Searching for Meaning," in the most recent issue of Institutional Investor, suggests that the Google model for reaping profits from search engines may itself ultimately give way in part, at least for the enterprise, corporate market.

The Google-type of search is described as not "particularly useful to corporate strategists seeking specific business intelligence or to securities researchers trying to stray on top of market-moving developments at companies they cover." The result is that both the search engine heavyweights, as well as smaller providers, are trying to find a better way to meet the needs of the enterprise market. Microsoft has agreed to pay $1.2 billion for a Norwegian company, Fast Search & Transfer. The perceived strength of the Fast Search technology is that it allows for "searching within large enterprises, behind the corporate firewall. Other companies vying in this space include Autonomy Corp., Endeca Technologies and Vivisimo.

The securities industry (to the extent that it has not been battered by recent events) is also trying to get into the game. The goal here is do "deep searching to mine the Web for nuggets of intelligence in domains that the Yahoos and Googles don't [currently at least) routinely reach, such as intranets, chats and blogs." The goal is a few, highly valuable pearls rather than a myriad of undifferentiated sand pebbles. Goldman, Sachs has apparently gotten into the act, investing in a company called Connotate as well as entering a market agreement with this company, so they maybe some substance in this approach.

One way to look at this is that this blooming of a thousand search-engine blossoms will take its toll on the Googles and Microsofts. But my heart of hearts tells me that the enterprise search market is not a disruptive technology, and that the big boys will find a way to dominate this emerging submarket as well.

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