[andraz]

The idea that costs for a search engine go down with time is false. Bandwidth, CPU, memory and disk sizes you have available to index and retrieve information do get cheaper. And this means they get cheaper for information-producers too. So the need to increase the amount of data you index eats away the decreasing cost of hardware.

Naturally this holds true for general search engines. Vertical ones are a very different beast. And I think Peter Thiel was not talking about specialized vertical searches like patent search.

[gentschev]

It depends on whether you think you need to index the same fraction of web content over time. I think that's one of the unexamined principles of the search engine industry. Also, software costs are in some ways decreasing even faster than hardware costs because of open source infrastructure.

To go back to the Blekko example, I'd say it's pretty clear you couldn't build something like that with $10-15 MM (assuming they've gone through maybe half their funding) a few years ago.

[protomyth]

It seems like you really need to keep up the index on the same %, but I guess dropping all the "designed for Ads only" sites would drop your number. I keep wondering if one of the shortening companies would come up with a search engine based on their links and some metric on repeats / reputation. Also, it might be work trying some touch setup with a person going good/bad for some % of your index.