Searchme nabs $31 million from Google backer, others

Updated at 10:30 a.m. PDT with corrected total amount of investment.

Visual search engine Searchme has raised $31 million from early Google backer Sequoia Capital and other investors, according to the company.

The Mountain View, Calif.-based company, which has been in development for the last three years, launched a private beta of its search engine on Tuesday. The company also closed on a fourth round of funding worth $15 million led by Lehman Brothers, according to SearchMe CEO Randy Adams. That investment adds to the $16 million the company has raised since June 2005 from Sequoia, Dag Partners, and private investors including actor Will Ferrell. Sequoia also participated in the latest round.

The investment was first reported by AllThingsD.com.

Searchme is a rich visual search engine for Internet users with a high-speed connection. The site lets visitors browse stacks of Web pages--or the images of those Web pages--before jumping off to the site. Visually, it's like the scrolling interface of Apple's Cover Flow for iTunes. Using predictive technology that tracks the word typed into the search box (e.g., Madonna), SearchMe will also suggest categories of content for visitors to browse (e.g., the religious figure or the pop star).

Adams, a longtime entrepreneur in Silicon Valley, said he got the idea for Searchme several years ago, when his then 5-year-old son was having a hard time reading. He wanted to build a search engine that would improve the experience of finding information online.

"In the last seven to eight years, we haven't seen a lot innovation on search results pages," said Adams, who founded Searchme in 2005 with John Holland.

"With Searchme, you can thumb through 30 pages of the Web in the time it takes to read one page of Google," Adams said.

Visual search has been around in some form for years--search engines, for example, have long toyed with thumbnail views of results. But Web surfers typically find text more useful.

What's remarkable about Searchme are its backers, who are seasoned investors in Web search. (Sequoia was an investor in Yahoo and Google.) Clearly, with such a sizable investment, Sequoia and others are looking for new search models that may change the game once again. Rival upstart RedZee shows there's more than one interest in the market.

If successful, visual search engines like Searchme and RedZee could help redefine online advertising when it comes to Web search. Google, of course, has proved that advertisers will spend billions of dollars annually to seed their product ads into search results and pay for each click on a text listing. But Google has yet to entice major brand advertisers to spend billions on graphical ads, paying rates similar to television commercials.

It's easy to see that if people begin to cotton to visual search engines on their Apple TV, for example, brand advertisers like Coke and Nike would likely pay more to insert the equivalent of a two-page magazine ad or video inside the results pages.

Sequoia partner Mark Kvamme, who is chairman of Searchme, was selling such an idea to advertisers in New York City on Tuesday.

"Searchme allows you to bring brand advertising back into search," Kvamme said in an interview.

Searchme plans to make its money from ads, but for now, the site will be advertising-free. It's available only by invitation, but Adams said the company will launch publicly by the end of the month or by early April.

The company's visual engine was built from scratch in collaboration with Adobe Systems and its Flex 3 software. It's not an exhaustive index of Web pages--it searches just more than 1 billion pages, a drop in the bucket for Google, but the company said it's regularly adding sites. The company is concentrating on keeping the experience fast--Adams said that Searchme will load 10 pages in under a second.

The company has 35 employees in its Mountain View, Calif., and San Francisco offices. Search experts working on the site include Eric Glover, a machine-learning specialist previously with Ask.com.

Adams said the company raised $31 million to support the expense of attracting talent in Silicon Valley and afford thousands of servers it takes to render visual search. That said, it still has a lot of money in the bank.

"Search is a difficult thing. Google has set the bar high," Adams said. But, he added, "you can always innovate."