Any start-up trying to displace Google, Yahoo, or even MSN or Ask (or for that matter any VC trying to fund them) should just get in their car (or hop on a plane) and go look at Google’s new server farms at The Dales in Oregon. And if that doesn’t convince them they should head up the Columbia river a bit and check out Microsoft and Yahoo’s digs. The costs to compete in core search , are now simply to high.
According to him, search innovation will increasingly be about applications and not about the core infrastructure. In fact, he suggests start-ups build these applications on top of the core infrastructure already created by the larger guys.
One can imagine a world in the not to distant future in which an application designer can easily leverage the billions of dollars being spent by Google, Yahoo et. al., by having programmatic access to what is essentially a custom crawl list and a highly filtered index. In this way search engines, in some respects, may become an infrastructure layer not too dissimilar from the telecommunications networks and internet standards that they themselves are built upon.
For start-ups, having core search become just another part of the Internet’s infrastructure is actually great news. This frees them from the huge capital costs required to build a competitive core search platform and instead lets them focus on building a great consumer/enterprise application. The possibilities here are endless and will undoubtedly result in far more innovations than if search engines remained closed systems.
In this "it's all over" scenario, it is good to see Guruji.com making a strong bet that there is room to create an alternative to the GYM by going local. (Guruji's recent $7 million funding from Sequoia Capital has triggered off a lot of chatter in the Indian blogosphere. See here, here and here.)
It would obviously be very interesting to track this company.
Arun Natarajan is the Founder of Venture Intelligence, which tracks private equity and venture capital in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.