Thu, Jan 04, 2007 - Page 9 News List

Looking for the next Google

There are a lot of newcomers trying to beat the giant Internet search engine at its own game -- and plenty of Silicon Valley investors willing to back them

By Miguel Helft  /  NY TIMES NEWS SERVICE , SAN FRANCISCO

In brand-new offices with a still-empty game room and enough space to triple their staff of nearly 30, a trio of entrepreneurs is leading an Internet startup with an improbable mission: to out-Google Google.

The three started Powerset, a company whose aim is to deliver better answers than any other search engine -- including Google -- by letting users type questions in plain English. And they have made believers of Silicon Valley investors whose fortunes turn on identifying the next big thing.

"There's definitely a segment of the market that thinks we are crazy," said Charles Moldow, a partner at Foundation Capital, a venture capital firm that is Powerset's principal financial backer.

"In 2000, some people thought Google was crazy," he said.

Powerset is hardly alone. Even as Google continues to outmaneuver its main search rivals, Yahoo and Microsoft, plenty of newcomers -- with names like hakia, ChaCha and Snap -- are trying to beat the company at its own game. And Wikia, a company started by a founder of Wikipedia, plans to develop a search engine that, like the popular Web-based encyclopedia, would be built by a community of programmers and users.

These ambitious quests reflect the renewed optimism sweeping technology centers like Silicon Valley and fueling a nascent Internet boom. It also shows how much the new Internet economy resembles a planetary system where everything and everyone orbits around search in general, and around Google in particular.

Silicon Valley is filled with startups whose main business proposition is to be bought by Google, or for that matter by Yahoo or Microsoft.

Countless other startups rely on Google as their primary driver of traffic or on Google's powerful advertising system as their primary source of income. Virtually all new firms compete with Google for scarce engineering talent. And divining Google's next move has become a fixation for scores of technology blogs and a favorite parlor game among investors.

"There is way too much obsession with search, as if it were the end of the world," said Esther Dyson, a well-known technology investor and forecaster.

"Google equals money equals search equals search advertising; it all gets combined as if this is the last great business model," she said.

It may not be the last great business model, but Google has proved that search linked to advertising is a very large and lucrative business, and everyone -- including Dyson, who invested a small sum in Powerset -- seems to want a piece of it.

Since the beginning of 2004, venture capitalists have put nearly US$350 million into no fewer than 79 startups that had something to do with Internet search, according to the National Venture Capital Association, an industry group.

An overwhelming majority are not trying to take Google head on, but rather are focusing on specialized slices of the search world, like searching for videos, blog postings or medical information.

Since Google's stated mission is to organize all of the world's information, they may still find themselves in the search giant's cross hairs. That is not necessarily bad, as being acquired by Google could be a financial bonanza for some of these entrepreneurs and investors.

But in the current boom, there is money even for those with the audacious goal of becoming a better Google.

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