Anyone want to buy $45 million worth of visual search patents and other intellectual property? That’s about how much venture capital went into visual search engine SearchMe, which closed down in July and was looking for a buyer. It looks like that search was not successful, and now it is offering to sell its portfolio of intellectual property, in whole or in part, to the highest bidder.

In an offering document which is now available on the site (and embedded below), SearchMe’s senior secured lender, Lighthouse Capital Partners, is looking to get whatever it can from the sale of the search startup’s IP. From the document:

Lighthouse is seeking a buyer for the SearchMe’s Assets, in whole or in part. Interested parties may bid on all or any part of SearchMe’s brand name, core technology, front-end user interface, or back-end search and advertising architecture, enabling the purchaser to leverage SearchMe’s brand name, core technology, front-end user interface, and/or back-end architecture, to establish an Internet search engine with a visual approach, to enhance the user interface of an existing search engine, to leverage the potential relevancy improvements.

So what exactly is for sale? SearchMe’s visual search user interface, search relevance algorithm, a total of 23 patent applications, its brand and trademarks, thumbnail server, visual advertising technology, and more.

Searchme Ip Details

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You are correct, we haven’t closed the financing. We knew when we started the company that to compete with the likes of Microsoft, Google and Yahoo,it was going to take at least $100 million, half to build the back end across thousands of servers and half to get distribution (maybe more with Microsoft spending $100 million on Bing advertising alone). What we didn’t plan on was the terrible downturn in the economy which made it impossible to raise another $50 million to get distribution (mainly through toolbar deals). In this economy nobody wants to invest that kind of money in a company that is pre-revenue, even if the net result is potentially a multi-billion dollar company.

There are some positive things though. In the process of trying to engage strategic investors we discovered that our tech really resonates with the people in the emerging broadband TV market where you will soon be able to easily access all the internet’s video on your TV. Directories don’t scale well so you’ll absolutely need search to find things to watch and visual search for multi-media content works much better than a list of links on your TV which you can’t read from 10 feet away. We are putting together some deals with chip vendors and set top box manufacturers to port the software over to their platforms and we are going to concentrate on that market going forward.

So the plan now (unless a buyer or white knight jumps in at the last moment) is to significantly downsize, take the site down for a while (probably tomorrow) and refocus the tech in a space where we don’t have to have 3,000 servers costing a million a month to run on the back end. We are going to have to do some serious restructuring to deal with our debt and recapitalize with a different capital structure but at the end of the day we should be able to create a healthier company with a MUCH lower burn rate, with the IP intact and a significant distribution channel. Headcount will go from 45 in the current company to probably about 10 in the new one which is very difficult for everyone but unfortunately necessary. We’ve brought back our former recruiter, Deva Santiago, to handle placement for those affected employees and we have some great talent so I’m sure they will get snapped up pretty quickly.

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The search engine first launched in March 2008, and has raised around $44 million in venture capital. Sequoia Capital has backed them from the start, beginning with a $400,000 seed round in 2005.

SearchMe has an innovative visual approach to search that lets users scroll through screen snapshots quickly. It is particularly appealing on the iPhone, and has been one of my favorite apps since launching late last year. It’s something that is just perfect for a mobile device with a large touchscreen.

Here’s SearchMe on the iPhone:

Sadly traffic to SearchMe’s main site never really took off. It grew fairly respectably to 1.8 million monthly unique visitors in March (comscore worldwide), but much of that traffic was generated from paid traffic (which was freely admitted by the company). When the marketing ended, traffic dipped to about 600,000 unique visitors in May. For more traffic data see Quantcast, which is directly measuring their traffic.

Update: SearchMe may shut down as early as tomorrow.

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What is the best way to sift through a stream of information? The list view seems to be the most popular because it is information-dense and easy to scan, but it can be overwhelming. More visually appealing ways to manage data are needed. Twine, a site which lets you collect and subscribe to different interest feeds, just introduced a new way to wade through its streams.

The new Flash visualization presents your stream of shared links as a deck of headlines which you can shuffle through (see video below). A slider along the bottom, lets you cycle through the deck by time, and arrows underneath let you move sequentially, or you can just click on a deck in the background to move it forward. If you want to learn more, you can flip each deck to read a snippet and link to the full detail page. The semantic tags associated with each item also show up on the side and can be clicked on to navigate through the deck.

It feels like Coverflow on Apple’s iTunes, except that you navigate through the deck front to back instead of side to side. It also reminds me of the deck metaphor on the new Palm Pre. I can definitely see this as a good UI for mobile apps as well where screen size is more constrained. Don’t worry, though, the regular list view is still an option.

My only problem with the visualization is that it takes a while to load (Flash, why do you torture me?). But other than that, it makes sifting through each feed seem more like channel-surfing in the way that SearchMe does for search results and music search or StumbleVideo does for Web videos. But there must be a better way to wade through the stream. What is it?

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SearchMe, the search engine startup which presents search results as a stack of full-page previews that you can flip through, is bringing its ad network out of beta. The SearchMe ad platform, which was originally named AdView when it launched in February, is the visual search engine’s version of AdWords, except that instead of selling paid text links, it intersperses ads into results of clickable previews of entire webpages, videos, or other visual advertising.

SearchMe’s advertising is appealing because the website becomes the ad itself, making the ad larger and more visually stimulating. So if you search for “Volvo” on SearchMe and if you flip through to the third result, it will be an ad that shows a landing page for Volvo’s latest models. Ad units can also be a YouTube video which can be played without leaving SearchMe. As we wrote in our previous review, SearchMe’s approach is similar to what StumbleUpon does, with ads placed in every 20 or so Stumbles.

During the beta period, SearchMe let 600 advertisers experiment with the network, with 50 of the participants being big-name brands, including Campbell’s and Volvo. SearchMe’s CEO and co-founder Randy Adams says that CPCs are $0.25 for the advertisers. And click through rates are high—at around 8%.

While visually appealing landing pages could be a potentially effective form of advertising, there needs to be enough unique visits for the advertising to be valuable in the long term. In February, SearchMe had about 3 million monthly visitors in the U.S, according to Quantcast. In April, the site had grown to 4 million monthly visitors. But in May, the number of U.S. visitors plummeted to around 750,000 visitors in the U.S.

SearchMe says that this drop in numbers is due to the fact that the search engine was spending $500,000 a month in advertising and driving a lot of traffic to the site. The startup is now spending little to no capital on advertising and is in the process of closing distribution deals to place the search bar in browsers and toolbars.

SearchMe maintains that advertisers responded positively to the network and type of ads, and especially the click through rates. And the startup also says it’s not in competition with search engines like Bing and Google, who have the lions share of search traffic. Instead they are out to compete with other visual search engines like Middlespot, Viewzi and Snap.

Sequoia-backed SearchMe originally launched the private beta of its search engine in 2008 and to date has raised $43.6 million in funding.

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Like its counterparts, Middlespot aims to enhance searching for websites, images, news, Amazon and even Twitter by returning screenshots of results rather than just text links.

Kicking off a keyword-based search opens two columns: to the left, you’ll get standard stuff like title, summary and full link, and on the right you’ll get a visual representation of search results. In the latter column, you can make the frames bigger or smaller by using the slider or scrolling your mouse wheel, and hovering over the boxes will highlight them and offer a couple of options. It’s all pretty straightforward, so check it out.

Next to visual search, Middlespot is also somewhat of a social bookmarking service, since it lets you save search results in a so-called ‘workpad’, an extra layer that saves your favorited pages and wraps a number of social services around them, like commenting, sharing via e-mail and embedding (see below). It lets you rename the workpad results, add a custom URL and also offers related search results on-site. If you register for an account, you can backup your workpad, but if you note your workpad ID elsewhere you don’t even have to do that since you can fetch the saved results later. Last but not least, Middlespot offers a number of tools like bookmarklets and browser plugins that make it easier to remember to use the service when looking for something on the web.

The problem with Middlespot is that its overall website design is below par, and it’s horribly slow with current response times that will prove to be unacceptable for the majority of people who are used to getting search results much faster. But since Middlespot is just two guys doing this in their spare time, those gripes feel like splitting hairs and frankly it’s impressive what they’ve built without a dime of funding and limited time resources.

Check it out and let us know what you think.

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What happens when you make paid search ads both relevant and visual? Searchme, the search engine startup which presents results as a stack of full-page previews that you can flip through, is hoping to find out with the beta launch of AdView. Its first foray into advertising, AdView is SearchMe’s version of AdWords, except that instead of selling of paid text links it will be interspersing into its results clickable previews of entire Webpages, videos, or other visual advertising.

If you are an advertiser and want to try it out, SearchMe is giving a free trial to the first 500 companies or individuals that sign up here. That’s right, you get to run a free ad campaign on SearchMe for 30 days.

To see how this works, search for “Ralph Lauren” and if you flip through to the third result, it will be an ad that shows a landing page for its fall collection. In other words, the Website becomes the ad itself. This approach is similar to what StumbleUpon does, with ads placed in every 20 or so Stumbles. But the ad unit can also be a YouTube video which can be played without leaving SearchMe. For instance, check out the third result when you search for “Mac” (SearchMe inserted one of the “I’m a Mac, I’m a PC” ads for demonstration purposes).

This could potentially be a very effective form of advertising. It is almost like a magazine ad where the ad is a Website. Advertisers who create visually appealing landing pages I suspect will do better. And it is also a potentially powerful way to target video ads, combining keyword targeting with a TV-like viewing experience. (Check out SearchMe’s own video commercial embedded below, which it plans to run as a TV spot)

SearchMe is not huge by any means, but it provides a nice sandbox to experiment with new types of advertising. Quantcast shows some decent growth over the past six months to about 3 million visitors in the U.S. That is certainly large enough to test the ROI for visual paid search. And its organic growth suggests that the idea could catch on. Certainly, it doesn’t hurt that Apple is training consumers to become comfortbale with the page-flipping metaphor. One of the key features of its just-released version of the Safari browser is a similar Coverflow-like treatment of bookmarked pages and browsing history.

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Okay, this has to be the coolest hack of the week. Visual search engine SearchMe has just added a music search tab that brings back results with free, legal, unlimited full-song streams and cover art you can flip through. It’s CoverFlow on the Web. And it actually trumps the experience one Yahoo’s music search, which also offers free full streams through Rhapsody—but those are limited to 25 streams a month per searcher.

SearchMe instead is tapping into imeem’s vast catalog of fully licensed music. (Along with Rhapsody and MySpace Music, imeem is one of a handful of companies with comprehensive music streaming rights from all the major labels). [Correction] But SearchMe is not using imeem’s API, which originally was limited to apps on imeem itself, but has since been extended to other sites through a. Instead, it using the widget loophole in imeem’s licensing deal with the record labels. Imeem users can stream any song and create playlists on imeem itself or through imeem’s widgets which can be embedded elsewhere. (Other partners such as Apture and Slide also use imeem’s API to invoke imeem widgets).

SearchMe is essentially grabbing the imeem widget for each song search result. As with all imeem music widgets, there are buttons on the bottom that will let anyone buy the song from iTunes, Amazon, or eBay. SearchMe won’t see any of that affiliate revenue, but if music search gets more people to actually use SearchMe it will worthwhile. The search engine is still tiny, but is gaining some traction (see Google Web Trends chart below).

This is a great way to discover music. You could do the same searches on imeem itself, but SearchMe’s user interface is bigger and beefier. Search for a band like Vampire Weekend (and click on the “music” tab), and all the results play through one after another. You can also create and save your own playlists by creating search stacks. For instance, here is a stack of the Top 10 Billboard songs.

Last week, SearchMe cut 20 percent of its staff (11 people). This week, it is making strides once again to move forward.

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In particular, this shot, which was included in a CNET article, shows what appears to be SearchMe’s search interface (itself borrowed from Apple’s iTunes album browser) with the logo cut off (compare it to this). CNET describes the screen shot as “One idea Yahoo showed for BOSS: show miniature versions of the Web pages returned by search results.”

To be fair to Yahoo, the screen shot was included in a press briefing document (the slide, which I also received, is shown below) and Yahoo was using it only as an example to show how the service worked. Yahoo has also said that they reached out to SearchMe to discuss a partnership, as they’ve done with scores of other companies. In the briefing, Yahoo didn’t specifically call attention to the slide, and it was made clear to journalists (or at least me) that the product wasn’t made for front end design, just as a search web service.

Yahoo probably should have left the SearchMe logo on the screen shot, but given how many other things there are to criticize Yahoo for these days, I’m inclined to give it a pass.

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As Lehman Brothers sells off its assets following its bankruptcy, there is still a big question as to what will happen to its venture arm and, more importantly, how any change in ownership will affect the companies in which Lehman Brothers Venture Partners holds a stake. Like many investment banks, Lehman got into venture investing in the mid-1990s to try to capture some of those venture returns. The investment management group that it was a part of was sold off to Bain Capital and Hellman & Friedman on Monday, but the venture arm was not part of that sale. Instead, Lehman Brothers Venture Partners is trying to spin itself off as a separate venture firm with about $800 million in assets.

But if it cannot do that, it will either go to hungry creditors or a financial buyer who may be more interested in liquidating the fund than in nurturing the startups in its portfolio. Those startups include Kayak, SearchMe, Jaxtr, Endeca, and about 80 more. (A partial list from CrunchBase is below. Other than comScore, most are still private).  They could wake up tomorrow and find that they have a new shareholder who is even more impatient for a quick exit than its existing ones.  It’s like being an orphan and wondering who your next foster parents will be. That can really mess with a startup’s development.

And this scenario may not be limited to Lehman Brothers. As other investment banks rethink whether they should be in the venture business, many more startups could find themselves with new shareholders. What if Goldman Sach, Morgan Stanley, or JPMorgan decide to get out of the venture business as well?

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Searchme is starting to focus much of its time in the mobile space. Last week, it said it will launch an iPhone app and today it announced that it has launched a visual search engine for mobile devices that can be accessed by surfing to the company’s mobile page.

Searchme’s visual search engine delivers results as a browsable list of “pages,” which are actually images of websites that can be viewed before visiting them. To help users during the search process, Searchme’s search engine suggests categories that have some relevance to the query you’re inputting into the service if you want to drill-down into related topics, and provides shortcuts to the best results to try to cut down on search time.

Searchme’s mobile search engine is quite fast and generally does fine on returning the best search results. But if you’re looking to do extensive searching (who would on a mobile device?) and you judge the quality of a search engine by the number of indexed pages, you’ll be disappointed by Searchme — it only returned 103,000 results for “TechCrunch” compared to 6.9 million returned by Google.

On simple queries like “TechCrunch,” the mobile search performed well and the categories displayed above the results were highly useful. But on more complex queries like “how to have a dog meet a puppy,” it didn’t perform well at all and returned a visual list of useless pages. But Searchme’s main goal isn’t to supplant Google, it’s to offer an experience that’s different and simple to use for those who needs something relatively straightforward as quickly as possible.

Mobile Searchme is a fine solution if you’re looking for a new way to experience search on your mobile device. But if you’re already using Google or Yahoo search on your mobile device, I doubt Searchme’s tool will make you want to switch.

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We once asked if Apple’s CoverFlow is a better interface for image search than the typical thumbnail grid approach. But what about for mobile search? SearchMe thinks it is good for both.

The visual search engine that launched last March is working on a natural extension: a visual search app for the iPhone. The app is ready, but the company is still waiting for it to be approved by Apple for the iTunes App Store. Co-Founder John Holland showed me a functioning version of the app earlier this week at TechCrunch50.

I like SearchMe better on the iPhone than I do on my laptop. The idea of flipping through images to find something is already ingrained into some of the most basic features of the iPhone—whether it is flipping through photos or the app menu itself. Maybe I’ve been too well-trained by Google, but when I am searching on my computer, I find it hard to beat the efficiency of skimming down a list of text links. When I do a search on my iPhone, though, I am always squinting and resizing the browser.

SearchMe isn’t a perfect solution. It presents search results as a series of thumbnails showing each Webpage, but you have to flip through them sequentially. SearchMe does let you narrow results by clicking on a topic icon. Still, it lends itself to certain types of searches better than others—when you are grazing for information, rather than looking for something specific.

The CoverFlow-like interface sometimes sometimes gets in the way. But sometimes it lets you find exactly what you want by letting you preview each age before clicking on it. I kind of wish it was an interface option on a regular search engine that I could turn on or off depending on what type of search I am doing. But on mobile devices, search is broken. So I’m more willing to try new things.

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The main new feature, stacks, allows users to bookmark and group sites and share them, visually, with others. To create a stack, you simply drag results into a newly created stack. See the how to video below, and here is a sample stack of companies that launched at the TechCrunch40 Conference last year. You can see more public stacks here.

I’ll be the first to admit that the first (private) release of SearchMe was a little rough around the edges. The results look great, and it’s fun to scroll through them like albums in iTunes, but the relevance and ranking wasn’t so hot.

Relevance and ranking is getting better, though. It’s the focus on the company now, says CEO Randy Adams. And the effort is being led by new VP of Research Mike Mathieson, who joined the company three weeks ago from Yahoo, where he was the director of engineering for web relevance.

SearchMe is one of only a handful of companies that indexes the entire web, so they’re serious about evolving into a big search player over the years. Search volume is up to 100,000 – 200,000 queries per day, says Adams. so they must be doing something right. Some users just want the quick text search results that they’re used to, and SearchMe’s visual results just slow down the process. But others (like my parents) like seeing the page before clicking on it.

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Mountain View based SearchMe has been around since 2005 and has raised $31 million from Sequoia, DAG Ventures and Lehman Brothers. But until last weekend when I met founders Randy Adams and John Holland I knew next to nothing about them. It now joins Mahalo as one of Sequoia’s big bets in search.

I say “next to nothing” because I actually did write about them before. In January 2007 the company launched a test product called WikiSeek that returned results only from Wikipedia and sites linked from Wikipedia. At the time Adams said WikiSeek was just a test product for the technology they developed. Now, over a year later, their ready to put up their main site.

SearchMe goes into private beta today – sign up on the home page for an account. The main difference between SearchMe and other search engines is that it returns results primarily in a visual format, via an image of the result site. The results are displayed in a way that is similar to browsing through albums in iTunes – see the following videos to get an idea of how it looks:

Today SearchMe has indexed just a tiny portion of the web – about 1 billion pages. But they are quickly adding to the index, and say that what they’ve grabbed so far is suitable to show off their technology. In the live demo I saw some results that were great. Other searches returned only so-so results.

Categorization and Vertical Search

SearchMe isn’t all flashy graphics. They are also auto-categorizing every page in the index to help users with disambiguation. A search for “Apple” can be done in the category “technology” to avoid results about fruit. And when you search, SearchMe places the categories it thinks are important at the top. In the screenshot above, the query “safari” shows categories including “companies,” “software,” wildlife,” “photography,” etc. The image to the right shows category suggestions for “blackberry.”

Update: Louis Gray noted SearchMe was indexing his site back in February, and said “Is it taking a graphical snapshot, in the same way that www.archive.org has done to show how Web sites looked over time? I’m not exactly sure.”

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WikiSeek is a search engine that has indexed only Wikipedia sites, plus sites that are linked to from Wikipedia. It serves two purposes. First, it is a much better Wikipedia search engine than the one on Wikipedia (and has been built with Wikipedia’s assistance and permission). Second, the fact that it also indexes sites that are linked to from Wikipedia means that, presumably, it will return only very high quality results and very little spam. It won’t show every relevant result to a query, but it will certainly give a good overview of a subject without all the mess.

The search results also include a tag cloud which contains Wikipedia categories containing the search term. Results can be quickly filtered by clicking on one of those categories (see screen shot, click for larger view). The first three results of a query are always Wikipedia content (unless there are not three results) and are shaded blue. The remaining results are below the shaded area.

In addition to the search engine, WikiSeek has two additional tools – a search plugin for FireFox, IE7 and Opera, and a really useful greasemonkey-like Firefox extension that will change the way Wikipedia looks on that browser by adding a “WikiSearch” button to the search box (see screen shot below). Click that button and see WikiSeek’s Wikipedia-only results. It’s faster and better than the results Wikipedia returns through its native search feature.

SearchMe is donating “the majority” of revenue generated from advertising on WikiSeek to the Wikimedia Foundation. Adams told me earlier this evening that WikiSearch is a showcase product for their technology, and they are happy to help the Wikipedia community as much as possible by donating those revenues.

Confusion with Wikiasari

WikiSeek will undoubtedly be confused with the much discussed Wikiasari search engine that was announced by Wikipedia founder Jimmy Wales last month. In fact, in our original post on Wikiasari, we included a screenshot that we later learned was not a prototype of Wikiasari. We corrected that post, and asked “the Wikisearch Screenshot Isn’t Wikiasari, So What Is It?” It was actually an early WikiSeek prototype, then called WikiSearch. Question answered.

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