Vertical Search = Vertical Market

"Watch Out Google, Vertical Search is Ramping Up!" shouted a September 2006 headline in Read/Write Web. According to the "experts" we were going to see a rising tide of vertical search products like Technorati, pluggd, retrevo, zoominfo, and Farecast taking market share from mass market Google. But by the beginning of 2008, Read/Write Web was instead describing Vertical Search as limited to "...the search space that Google has not yet grabbed..." So what happened?

I have been reading about the panel on vertical search at the SES conference in New York. Bill Tancer (Hitwise) points out that search is increasingly dominated by Google:

- 66% Google,
- Yahoo 21%,
- MSN 7%
- Ask 4%
- Other 2%

And Google has been doing a great job putting "vertical search" content into its search engine. And so a lot of searchers are going "from search engine to search engine."

The result of this is that many of these vertical search engines receive an enormous amount of their overall traffic from Google (their supposed enemy). These "pass-through vistors" have not learned to go to the vertical search engines, but start with Google, end up at a vertical search location for the results they want, and then move on to their destination -- never developing a relationship directly with the vertical search engine.

The really interesting unanticipated consequence? Vertical search companies are being lulled into believing that there is a mass market audience for their vertical search products. This skews expectations and business model -- making these companies think that this pass-through traffic, which represents the larger share of their page views, is also the most valuable part of their traffic.

Instead, I believe that these vertical search companies would do much better to focus on the dedicated repeat visitors -- the vertical MARKET that their vertical search capabilities appeal to, and to find ways to serve that core repeat audience and not the fickle pass through audience that comes from Google.

Once a vertical search company has focused on their core audience, there are a set of very different decisions they will make about the features and core capabilities to invest in from an engineering perspective. And a very different set of revenue opportunities to explore.

In the end, Google is going to do a great job in virtually every vertical search category for the "casual" searcher. Differentiating from Google is going to mean focusing on the needs of a particular vertical user, not just carving out one data type to index.