David and Goliaths of Search

AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Recently Priceline bought Kayak, a travel search engine. While it's not clear whether this is good for customers who just want to book a hotel or flight, it's certainly good for Priceline.

Much like Kayak posed a threat to Priceline, a small search startup called DuckDuckGo.com is threatening the search engine models of Google (NASDAQ: GOOG), Yahoo! (NASDAQ: YHOO), and Bing from Microsoft (NASDAQ: MSFT) . The startup, fueled by a recent injection of venture capital from Union Square Ventures, offers an alternative engine to a) people who value their privacy and b) people who value their time.

Lean and Clean

DuckDuckGo.com does not track users and has almost no advertising. When I type in "why do fools fall in love," here are the results. Clean and succinct results. I did the same at Yahoo!, Bing, and Google and the results were almost identical between the three. But DuckDuckGo.com had the three most relevant results in a highlighted box at the top unlike the others. I can't give you the link to the others because they track my results for years in search history. But this article from Searchengineland.com about the threat to Google from DuckDuckGo goes into great detail with its search results.

DuckDuckgo.com has an interesting box at the top of the site explaining exactly how users' privacy is at risk on the big search engines. Even private health info can be possibly used against you to raise insurance rates. The tiny company put up a billboard in San Francisco a year ago cautioning users about Google search. Its founder Gabriel Weinberg, already an internet millionaire, is passionate about this startup and his commitment to privacy and clarity as revealed on his blog .

On the same blog he clearly targets Google as his team experiments with the same search on Google and his engine, with varying results. He also discusses how Google filters results based on past search history. On the DuckDuckGo site every search is a tabula rasa and everyone will get the same result.

This is disruptive to the big guns of search and if they had some sense one of them would buy out DuckDuckGo.

Yahoo! with new CEO Marissa Mayer doesn't have the resources now to buy them out. They have their own knitting to tend to and just came out with Yahoo! Axis, a new and improved web browser trying to keep up with Google. They also announced a more gmail like email system. They don't need to figure out how to monetize anything else right now although their numbers are improving with a 5.40 P/E and a 79.94% profit margin. Yahoo! indeed.

Likely Microsoft would drag its tail before buying such a tiny venture as they've been dragged screaming and kicking into competition with Apple (NASDAQ: AAPL) on hardware and software. But Microsoft has the funds with $66 billion cash and only $12.37 billion in total debt. How they could monetize the site without changing its integrity is a good question, though.

Google:Still The Biggest

Google could just buy it out and put it to bed. They throw so much money around as it is. It isn't unprecedented for them to experiment with small websites like they did with a crowdsourcing competition for logos, copy and art called prizes.org which is shutting down after only 18 months under the Google umbrella.

Google has almost as much money as Microsoft with only $7.90 billion in debt to $44.62 billion in total cash. Shareholders are not unhappy about the 20.87 P/E and 14.35 forward P/E. And Google has so much else going on with the Nexus tablet, Android, cloud, and search that this would be like swatting a fly off an elephant for them.

What would be the most interesting scenario would be for Apple to buy DuckDuckGo and give themselves the kind of search worthy of Apple, clean in design, clean in intent, and the ultimate razzberry to Google in their ongoing grudge match.

Apple certainly has the cash and it too has been buying up or investing in websites including a flash shopping site. This search engine would be a fine fit for Apple. It would be just one more reason to buy Apple, the stock and the products.

The Final Takeaway

Google as the monolith and, some charge, the monopoly of search with billions of searches isn't going away but the traction of DuckDuckGo is increasing as they gain millions of searches and more adherents. With Google under increasing scrutiny over its search policies, privacy issues, and filters they could use some good PR. Google is still a verb but Weinberg is hoping something like "Just duck it" could fly.

Compare and Contrast

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