All the world’s a Google wannabe

Could it be the battle for dominance of Web 2.0 may instead be turning into a race to become Google 2.0? There is certainly a case to be made if start-up companies presenting at Essential Web 2007 last week are anything to go by.

A procession of companies at the Library House event laid claim to the Google 2.0 crown. A number of them unequivocally claimed they could displace the King of Search. Others were content to seek to conquer a corner of Google’s empire or to piggyback on markets it had created.

Migoa was one such company. The vertical integrated search engine for real estate, cars and jobs marketed itself as “Google, but specialised”. Gary Stewart, its chief executive, told Essential Web delegates: “Google can’t do everything – there is too much work for one search engine.” Stewart pointed to what he believes are more relevant results from the Migoa search engine.

Trexy, another search engine start-up, was also trying to woo delegates with a five-minute Dragons’ Den-style pitch. Its chief executive Nigel Hamilton decried the “rubbish” that existing search engines produced. “Information on the web just piles up and can’t be thrown away like a newspaper,” Mr Hamilton said. “Our large-scale meta-search engine finds information on websites that is not available to Google’s crawler. It really gets to places that Google can’t.”

Yakov Sadchikov, head of Quintura, a Russian search engine company was even more explicit in throwing down the gauntlet to Google. “The next Google will come from Eastern Europe – that is our goal,” he proclaimed.

So what are we to make of these claims? It would be easy to dismiss them as hubris, but without ambition – on a global scale – few companies attract venture capital in any great quantity. However, David Soskin, chief executive of Cheapflights and Howzat Media, asked the question on many people’s lips. Mr Soskin, one of many expert panellists and investors to express concerns about some new entrants to the market, said: “What happens if Google just comes along and supplants you?”

The answers were varying in their persuasiveness. Extate, the self-styled “YouTube of real estate'' mounted a robust defence of specialised search engines. Douglas de Jager, Extate’s co-founder said: “On most property websites the layout is horrible, they use Javascript which Google cannot handle and extracting information is incredibly hard. Google would have to change its whole business model to do what we do.”

Now, assuming this is true, Google would have one principal way to defend itself against such disruptive elements – use its considerable financial strength. As Migoa’s Mr Stewart said: “Google could not supplant vertical search engines but it could try to buy people who do it.” And therein lies the approach of a fair few start-up companies: get launched, get backers, get sold. Of course, there is nothing wrong with creating a valuable franchise and selling it to a competitor, but is this a viable business model in general?

We’ll allow that question to be answered by Google itself. Anil Hansjee, head of European corporate development at Google, told Essential Web delegates: “A lot of companies come to me where it is clear they have been well schooled by their investors or have built a business plan on ‘Google will buy us’. We are acquisitive but we are not going to buy up every company out there.”

The Week's Deals

Probiodrug, the Germany-based developer of small molecule inhibitors against inflammatory and neurodegenerative diseases, has raised €20.6m in series A funding from Bayern Kapital (Seedfonds Bayern), HBM Biopartners, IBG Beteiligungsgesellschaft Sachsen-Anhalt mbH, Sachsen LB Corporate Finance Holding GmbH (Dresden Fonds GmbH), TVM Capital GmbH, tbg Technologie-Beteiligungs-Gesellschaft and Georg Frank. Probiodrug is developing a new approach to treating Alzheimer’s disease and other neurodegenerative and inflammatory diseases, focusing on the enzyme glutaminyl cyclase. The funding will allow Probiodrug to advance preclinical and clinical development of the small molecule drugs developed using this approach. The company simultaneously announced the acquisition of Germany-based Ingenium Pharmaceuticals, a discovery and development company focused on inflammatory diseases.

PregLem, the Switzerland-based specialty bio-pharmaceutical company, has raised €20m in series A funding from Sofinnova Partners, MVM and Neomed Management. PregLem also announced the signing of a licensing agreement with Euronext-listed Ipsen, under which Ipsen will grant PregLem worldwide development and commercialisation rights to certain Ipsen compounds, for use in reproductive medicine only. The funding will allow PregLem to undertake the development of these and other key compounds in its portfolio.

Serentis, the UK-based bio-pharmaceutical company, has raised €15.2m in series A funding from Apposite Capital, MVM and Novo. Serentis' strategy is to identify opportunities to develop new products based on drugs that are already used for other indications. The company was co-founded by three former managers at Arakis, the UK-based bio-pharmaceutical company that was sold in 2005 to Tokyo Stock Exchange-listed Sosei for £106m (€156m).

Kiadis, the Netherlands-based oncology product development company, has raised €15m from Alta Partners, Esprit Capital, Life Sciences Partners, MedSciences Capital, N.V. NOM and Quest for Growth. The Kiadis product pipeline is focused on providing novel treatments in the field of bone marrow transplants and the treatment of aggressive cancers. The four most advanced products are currently in clinical trials, ranging from phase I to entering phase III.

See below for a complete list of deal headlines.

Did we miss anything? If you think we have missed a deal or know of a deal that is about to close then send us your deal news.

People Moves

Kidaro, the Israel-based provider of enterprise desktop virtualisation products, has appointed Kevin Brown as president, chief executive, and a member of the board of directors. Prior to joining Kidaro, Mr Brown served on the original executive team of storage security company Decru, where he was head of worldwide marketing, business development, and product management. Decru was acquired by Network Appliance in 2005 for $272m (€227m).

Quard Technology, the Denmark-based biometrics security company, has appointed Christer Bergman as chairman. Mr Bergman was most recently president and chief executive at Precise Biometrics. Quard has developed a security system which combines one-time-passwords with biometric verification. The company plans to initiate pilot projects with initial users within the next few months.

Cellcrypt, the UK-based provider of secure voice encryption software for mobile devices, has appointed Richard Greco as non-executive chairman. Mr Greco was founder and chairman of Bulldog Communications, which was sold to Cable and Wireless in 2004.

The Week's Exits

Vivalis, the France-based bio-pharmaceutical company specialised in developing and marketing technologies for producing vaccines and preventing viral pathologies, has raised €29m through an IPO on Euronext Paris. The listing values the company at about €150m.

Coronis Systems, the France-based provider of ultra-low-power consumption wireless communication technology, has been acquired by Elster Group, the Luxembourg-based supplier of integrated metering and utilisation products. Financial terms of the deal were not disclosed.

Antennessa, the France-based provider of instruments for the environmental analysis of electromagnetic fields, has been acquired by Satimo for an undisclosed amount in cash. Satimo is a provider of electronic scanning multi-probe antenna measurement systems for use in areas including civil radio communications, avionics and the car industry.

Most Accessed Companies

King.com, the UK-based online game portal, has attracted a lot of attention this week. King.com is a gaming site that allows players to take part in tournaments where skill, rather than luck, is decisive in determining the outcome. This difference means that the company isn't classed as a gambling site. King.com was founded by Toby Rowland, the son of tycoon Tiny Rowland, and is backed by investors including Apax Partners and Index Ventures.

Colibria, the Norway-based developer of instant messaging and presence systems, has also received a lot of attention recently. Colibria's core mobile network platforms are designed to provide a scalable and flexible infrastructure for advanced presence, messaging, and multimedia services. The company has a global customer base of mobile operators in Europe, Asia and Latin America. Investors in the company include Ferd Venture, Northzone Ventures and Verdane Capital.

Other companies generating interest recently include Wilocity, JAJAH, and ReVolt Technology.