Here are some thoughts from CEO and co-founder Siva Kumar of TheFind, a vertical search engine for shopping.

Q: Out of the many search strategies, which 2 to 3 do you think hold the most potential for advertisers/marketers?

A: In our view, categories that have a mass consumer appeal and hence a lot of search advertising spending associated with them – shopping, travel, local, classifieds – are the more viable search businesses from the advertisers’ and publishers’ perspective.   From the marketer’s perspective, vertical search is much more targeted and therefore the dollars spent go much farther with better results than the spending on general purpose sites.   In addition, vertical search engines can also grow to critical mass-sized volumes even while retaining the targeting necessary to keep marketers very happy.

Q: From a business perspective, how difficult is it to actually get a viable engine?

A: The key to search is to be as comprehensive as possible with your index, and then provide superior relevance from that set of data.  You cannot take only one approach or the other – both must be present in full capacity in order to provide value to consumers. The third essential ingredient for success is speed. Google has been able to crawl the largest number of web pages, and build the best relevance algorithms, which has led to its dominance.  Competing in web search is therefore a broad and complex problem in that you have to beat a superior product that has had considerable investment put in already – not a task easily done by new entrants without some dramatic new secret sauce.

Vertical search, however,  provides significant room for innovation because in several consumer and business to business sectors, superior relevance can be attained via more tailored search experiences.  For example, travel, shopping, and even classifieds  are clearly better served with search experiences that are very domain-specific – comprehensive index coverage, targeted relevancy, domain semantics, and user experiences.   Kayak and TheFind are good examples of well-tailored, meaningful vertical search experiences developed from the ground up to address the needs of the respective verticals.

Bing has actually made a major leap forward by showing consumers vertical search results that complement the web search results. But, Bing is competing on many fronts all at once. The main task the market will judge Bing on is in delivering better web search results than Google and this is a very formidable undertaking by itself.  However, equally daunting is doing better on verticals like travel and shopping which also require teams dedicated to understanding and solving search for those domains, which no web search engine has been able to do to date.

Q: What kind of $ is needed for R&D before launch?

A: At minimum, you need a hardware investment between $500K – $1million just to crawl a majority of the web (1 billion to 3 billion web pages) needed for your vertical.  The amount of development time needed to build out the search back-end and high- quality relevance is around 1 to 2 years which includes building a successful web  crawler, and this can be done with a staff of 20 experienced folks.  Depending on the team’s location, this might require an investment of $8 to $10 million dollars to complete.

Here at TheFind, a vertical search engine for shopping, we raised, but did not fully spend, a total of $26 million. Our investments to get to a working search experience at launch were similar to the numbers above. Since launch, we have iterated continually to better our experience helping to draw more and more visitors to the site every month. We are now a profitable company with over 13 million unique visitors per month.

Q: SearchMe, for instance, reportedly had $44M and its CEO said it would take a total of $100M. Does that sound like it’s on target?

A: SearchMe’s plan was to develop a horizontal web search engine with an innovative user interface.  In this, they were taking on the same challenge that Ask, Bing and Yahoo have attempted – take share from Google. The dollars required for this go way beyond just building a compelling search experience which by itself may need $10 million to $25 million. After launch, building audience market share could take anywhere from $50 to $100 million dollars to even achieve single digit share gains. Of course, if SearchMe had tried this in a vertical category that perhaps was more suited to its visualized interface the task may not have required the $100 million investment.