Cuil's Not a Story, but $26 Million on Marketing Might Be One

Includes: AABA, GOOG
by: Blaise Zerega

So, Cuil, a new search engine launches -- cool. But it stinks, and nonetheless gets big media play -- uncool. What gives? Is the world just waking up to search engines other than Google (NASDAQ:GOOG)?

Between 2004 and 2006, venture capitalists plowed some $350 million into 79 search engine start-ups, according to the National Venture Capital Association. There are dozens of alternatives to Google. Pick one, anyone, and there's likely to be something interesting to say about it. Weeks ago, one search entrepreneur told me that with $10 million and 18 months, anyone can build a comprehensive search engine.

The experience of Cuil, today's media darling, seems to bear this out. According to Saul Hansell, Cuil has raised $33 million in two rounds of funding, but has spent only $7 million. Ok, so my search entrepreneur was right--- but what is Cuil going to do with the remaining $26 million?

Series A was for $8 million from Tugboat Ventures and Greylock Partners, and series B funding was for $25 million from Madrone Capital Partners.

So, perhaps that's the real story here. Now that it's built a search engine, how will Cuil spend $26 million?