Overture (and you’ll notice we talked Google into it) figured out how to monetize a lot more than 3%.

as for other “long tail” memes, it’s also a pretty good fit for most of the new vertical search niches that are starting to roll out (disclaimer: yes, i recently joined a vertical search startup… cough, cough).

although the front-end of the distribution curve may sometimes be served by a few aggregators with seemingly large market share, in at least a few notable verticals there’s an incredible proliferation of data sources in the tail.

if you then apply a crawler & search engine to extract & aggregate that data (and also to structure the metadata unique to that vertical), you can provide a pretty useful and sticky service for searchers in that niche.

and because vertical search typically involves more structured search, there are additional queries and pivots around the metadata that make a vertical search more valuable to the seeker than a generic search service.

what does this all mean? higher CPCs, and a further movement down the funnel towards CPA-based spending. that means better value for advertisers, and better ROI than generic search can offer.

thus, look for Google and Yahoo to acquire several of the independent shopping search sites over the next 12-18 months. however NexTag, Shopzilla, and PriceGrabber all have pretty good economics, and could remain independent / go public on their own.

stay tuned, the vertical search game is AFOOT.

- dmc

People inside the company make exactly the same mistake, though. They think that looking at what most people are searching on will give them insight into what people are looking for. When asked for “top search term” reports, I constantly have to point out that the top search terms represent only a tiny fraction of all queries.