Entrepreneurs have learned that pitching anything to investors with “we can beat Google at search” is the kiss of death. This is like pitching against Microsoft in the PC world of yesteryear. None of the high profile, well-funded search engine start-ups with cool new interfaces, social search or natural language technology have made a dent in the real world. Not even Microsoft, with its army of smart researchers and piles of cash, has been able to halt Google’s relentless market share gains in search. So why do I think that a bunch of engineers in Germany at a low profile company called FAROO have a chance?
This is a company without VC backing, with a funny name, that’s located far from Silicon Valley and most of their press is not even in English! The answer is: for the same reason that Microsoft’s dominance was finally ended — not by big competitors with a similar solution, but by tiny little efforts that eventually changed the game, like a young guy in Finland writing some Unix code and giving it away.
The game-changing FAROO advantage is not that it is free software, it is their Peer To Peer (P2P) architecture. This can totally change the economics of search. To quote FAROO’s front page, “Copy the entire Internet to one system? Strange idea. That’s what search engines try to do. Therefore they require 450,000 servers and $2 billion.”
That’s it. You don’t need to read any further. There are a some other advantages that flow from this architecture, but the basic proposition is really that simple.
FAROO’s Potential
FAROO has 3 big potential advantages and 3 major hurdles. First, the 3 big advantages. These were articulated on a site called ReviewSaurus, which is one of the few blogs paying any attention to FAROO:
“1. The search engine index is based on a real users [sic] browsing habits : That means that web index will not serve those websites on which you dont spend time thus reducing spam results.
2. The data is not stored anywhere but your own computer and you have the control of your own data. Searching is completely anonymous.
3. As per Faroos plans, youll be able to earn money from their advertising based revenue model. This is yet not implemented, however, its one of their declared plans.”
It is the latter point that is critical. FAROO can do this because they don’t have to invest in huge server farms. The search business is about giving a good deal to both publishers and advertisers. You can offer a better deal if your costs are lower.
The “publishers” in this case are you, me, and everybody else who contributes to the growth of the FAROO index by searching and using their software. It is a real “show me the money” proposition. Imagine if every search you did put money in your pocket. By searching, you make FAROO better, so it is quite reasonable to expect a cut of the revenue. And if your search doesn’t cost them much, they can share more of that revenue.
If their costs are low, they can reduce the cost of search terms for advertisers, and as Craigslist has discovered, reducing price in a zero cost environment has a dramatic effect on volumes and market share.
If they then create an API that enables entrepreneurs to build value on top…
Problems Facing FAROO
The 3 big hurdles are:
- Can P2P search scale? I am not technically competent enough to answer that question, but I have not yet seen evidence to convince me that it is impossible. The success of other P2P services such as Skype make me willing to at least reserve judgment on this issue.
- The chicken and egg problem, based on the fact that the P2P search index scales with the number of people using FAROO. When I first looked at FAROO last year, this looked like a show-stopper. As the number of searchers is very low right now, people are likely to try it, get lousy results and forget about it. When I revisited FAROO in March, I noticed that they had taken steps to address this. Their solution (not by itself a big deal and used by other alternative engines) is to aggregate search results from other engines in addition to results from FAROO. So you get some results no matter what you’re looking for and thus may continue to use the software. This also scales their index faster.
- FAROO, being P2P, requires a client download. That can be an incredibly big hurdle to adoption. When I first looked at FAROO, I thought their best shot was to build on top of existing P2P services such as LimeWire or Gnutella. I now see that they have a fundamentally different strategy. They are building on top of .Net. Oops there go all the Mac and Linux heads… bye. This is potentially a serious issue as lots of early adopters tend to be on the Mac. I am a Mac user, so I could not use FAROO without borrowing somebody’s PC. OSX and Linux support is “coming soon.” I assume this will be via Mono. Having been so much in the Java world recently, I have no idea how well Mono works in practice.
When ReviewSaurus asked why they don’t use Google for secondary results, FAROO responded in the comments:
“Google doesnt provide a search web service API anymore (http://code.google.com/apis/soapsearch/reference.html)
The terms of service of the second Google AJAX Search API do not permit to integrate their search results into a client application.
Unfortunately not always an API is really open.”
So it does look like FAROO is in the Microsoft camp – a fundamental threat to Google built on Microsoft technology, with Google not willing to play with them.
What FAROO Needs
However, FAROO needs to show the world that they are not just Microsoft acquisition-bait. That fear would alienate much of the early adopter crowd who they need to help them gain initial traction. They need some patient capital that sees this as a really big play that can eventually go public. In Europe, small, young technology firms still do go public.
FAROO needs some independence because their potential is huge. Apart from the basic economics, FAROO has really addressed the privacy issue as they explain here. It does appear that they have overcome the conflict between personalization and privacy that I wrote about in a previous post on this blog. That is huge. If users feel 100% confident that their privacy is being protected, they will reveal more and thus create a more accurate database of intentions (which will be more useful to advertisers). But that confidence is one part technical and one part institutional trust. So if they get bought by Microsoft, too many people will fear that their privacy will not be as safe as advertised.
FAROO also appears to have a simple and elegant “implicit web” approach to social search as they explain on their blog. Their key point is that the user does not have to tag or take any other explicit action to take advantage of social search:
“FAROO utilizes the implicit web to direct the crawler to places the users are interested in, to select, rank and personalize results according to the attention users paid to the content visited, and to implement behavior targeting for advertising based on present and past behavior.”
At a conceptual level, combining the two Internet megatrends – search and social networks – is an obvious direction, so that your search is augmented by searches done by people in your trusted network. In practice that is tough to get right. FAROO looks like they maybe on the right track to do it, though.
Has anybody tried FAROO? Do you think P2P search can scale? Does .Net on OSX via Mono work? Let us know in the comments.
