I'm just trying to understand this move.. DDG has been running with ~1 dev for 3 years.. I know that they were adding a second dev, but why raise capital? I don't see what this gets them, over continuing as a lifestyle bus.
Using Yahoo BOSS or the Microsoft search feed, anyone can build a fully functional, highly relevant "search engine" in a couple of weeks. "Search engine" is really a metasearch engine. Given enough traffic, you can syndicate a sponsored link feed and generate 3-4 cents per search. In principle, it is a great business. The place where all have failed is in the non-coerced acquisition of users -- everybody has to pay for users somehow, and by the time you've bought a one-time user you are forced to give them a terrible product (all ads, no quality).
What Gabriel has figured out and no one else has is how to build a search brand that people trust and are willing utilize. He seems to have a loyal core of users that come to his site without him paying on a per-search basis. Search quality, as perceived by the user, in as much about brand trust as it is about algorithmic quality. Too many companies focus on tech first and hope that the brand trust will come later (SearchMe, Blekko). Gabriel has actually invented a viable search business model. That's much more novel than his technology.
The interesting question is whether DuckDuckGo's organic user acquisition model can scale with additional resources. They put up one billboard in San Francisco and got a huge ROI -- will that work elsewhere?
You and I likely don't have access to the information necessary to understand the move.
Gabriel's been a patient bootstrapper for years and I doubt he'd raise capital on a whim. I'm sure he's got a solid plan for the money, which he doesn't have to make public.
Comments
I'm just trying to understand this move.. DDG has been running with ~1 dev for 3 years.. I know that they were adding a second dev, but why raise capital? I don't see what this gets them, over continuing as a lifestyle bus.
Using Yahoo BOSS or the Microsoft search feed, anyone can build a fully functional, highly relevant "search engine" in a couple of weeks. "Search engine" is really a metasearch engine. Given enough traffic, you can syndicate a sponsored link feed and generate 3-4 cents per search. In principle, it is a great business. The place where all have failed is in the non-coerced acquisition of users -- everybody has to pay for users somehow, and by the time you've bought a one-time user you are forced to give them a terrible product (all ads, no quality).
What Gabriel has figured out and no one else has is how to build a search brand that people trust and are willing utilize. He seems to have a loyal core of users that come to his site without him paying on a per-search basis. Search quality, as perceived by the user, in as much about brand trust as it is about algorithmic quality. Too many companies focus on tech first and hope that the brand trust will come later (SearchMe, Blekko). Gabriel has actually invented a viable search business model. That's much more novel than his technology.
The interesting question is whether DuckDuckGo's organic user acquisition model can scale with additional resources. They put up one billboard in San Francisco and got a huge ROI -- will that work elsewhere?
You and I likely don't have access to the information necessary to understand the move.
Gabriel's been a patient bootstrapper for years and I doubt he'd raise capital on a whim. I'm sure he's got a solid plan for the money, which he doesn't have to make public.
Raising capital lets them hire additional people.