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Search: Scaling Down for a Big Market

By Stacy Perman A little more than a year ago, Boston-based law firm Brown Rudnick Berlack Israels was in the process of redesigning its internal Web site. It realized it needed a good search tool to trawl through a large database of documents built up by its 400 employees (half of them attorneys) in six offices in the U.S., Britain, and Ireland.

The firm's tech team first asked its lawyers, paralegals, and executive assistants to describe their ideal search tool. "Everyone said they wanted Google-like results in a search engine," says Keith Schultz, Brown Rudnick's application development and Web design manager.

TEMPTING MARKET. So, Schultz called Google (GOOG). He told the search giant that the tools generally available on the market were too large-scale and expensive for the firm's needs. For example, Google's own Search Appliance, launched three years ago, costing $32,000, and capable of searching 15 million documents, was "overkill for us," says Schultz.

He explained his need for one box for the firm's two external Web sites, as well as its intranet, on a smaller scale and at a lower price point. "They told us they were in the process of developing the Google Mini for firms such as ours," he says. And so the company invited Brown Rudnick to be one of the first businesses to purchase it, prelaunch.

For Google and other tech providers, small and midsize companies like Brown Rudnick represent an underserved and increasingly attractive market. While the big providers see rewards on the balance sheet, smaller companies benefit from more and more products designed specifically for them. "Generally, the enterprise business at Google has been oriented toward larger companies," says David Girouard, Google's enterprise general manager. "The very biggest companies out there buy from us. But we've had so many hundreds of small businesses come to us. They wanted something simpler and that fit within their budgets."

IGNORED CUSTOMERS. The $4,995 Mini, a scaled-down version of Google's Search Appliance, is software in a rack-mountable server that plugs into a company's intranet and can be used either internally or on its Web site to search up to 50,000 pages. Once installed, the blue box indexes a company's content. Just like on Google's familiar free search site, information is instantly accessed by typing in a search query. Mini has no sponsored advertising links, however, and Google maintains that it requires little technical support.

Two months into the test run, Brown Rudnick is pleased with the Mini's results. "We wanted the attorneys and staff to easily find documents," Schultz says. "Now they're spending less time searching for documents and more time working on them." In January, the Mountain View (Calif.)-based Google officially rolled out the Mini. For now, it's sold only through the search giant's online store.

Although Google is clearly the undisputed Internet search engine leader, in enterprise search it lags behind a number of other players such as Fast Search, Autonomy, and industry leader Verity (VRTY). They have for the most part, however, mainly focused on bigger companies -- and Google hopes to gain ground by going after the smaller and, thus far, largely ignored customers.

DIVERSIFYING REVENUE. Between the free downloadable software available and the complex, expensive products normally used by companies and their large-scale intranets and voluminous Web pages, Google recognized a potential windfall in courting the middle market of some 23 million small businesses that need reliable search tools. "I think the Google Mini is an attractive option," says Chris Sherman, a Boulder (Colo.) consultant and an editor for Search Engine Watch, an online trade publication. "What's out there is not really targeting small businesses."

The Mini is also viewed as a significant bid on Google's part to diversify beyond ad revenue. Although the outfit recently announced fourth-quarter sales of $1.03 billion -- an increase of 101% from the same quarter last year -- the earnings boom came mostly from paid-search advertising, which hit $530 million, up 118%.

Still, while the enterprise market is ripe, it isn't Google's alone for the taking. Thunderstone, a document-retrieval and -management concern based in Cleveland, has made a major play for the same market, introducing its own Small Business Edition in January. Like the Mini, it's a hardware and software combo priced at just under $5,000 and can search up to 50,000 pages. Plus, it claims to outperform Google in several areas, such as the number of queries it can handle during peak times.

WELL-KNOWN MONIKER. On the whole, the products aren't targeting sole proprietorships but companies with 50 to 500 employees. "The Commerce Dept. says there are 8 million small businesses that make payroll of one or more employees," says Greg Sterling, an analyst with Princeton (N.J.)-based Kelsey Group. "You need a business with some repository of information sufficient in size and scope to justify the product. Home workers can just do a desktop search."

Google, however, has an advantage that the competition doesn't -- its name. "From a pure marketing perspective," Sterling says, "they have the brand advantage and an enormous user base. It's always a challenge with the small-business market to reach it."

And Google isn't shy about exploiting its nearly ubiquitous moniker. "Our products speak for themselves," Girouard says. "Google-quality search results right out of the box. You don't have to do anything else. We have hundreds of engineers dedicated to solving search." Google has already become a verb. And now, it's betting that the Mini will translate into another action -- sales. Perman is a reporter for BusinessWeek Online in New York

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