Net gears for facial search

In the Silicon Valley’s Web 2.0 boom, few entrepreneurs have managed to build the kind of buzz that Munjal Shah, CEO and founder of visual search engines Riya and Like.com, has for his fledgling startup.

Silicon Valley chatter has it that, two years ago, search giant Google was interested in acquiring Riya, a search engine specializing in facial recognition, even before the start-up was launched.

The deal fell through but Shah wasn’t discouraged. As questions about the company’s business model, or the lack of it, swirled, he took a dramatic step. He reinvented Riya as Like.com, a search engine targeted at shoppers. Shoppers can use Like.com to search for items based on color, shape and patterns.

Early last year, Shah made another tough decision. He shut his Bangalore office because he deemed outsourcing work to India was getting too expensive. Clearly, he isn’t afraid to go against conventional wisdom.
However, with Like.com, he may have placed his biggest bet yet.

Like.com focuses on jewellery, handbags and clothing, estimated to be a $15-billion business online. The site is part of a new generation of shopping engines that are giving established players such as Google a run for its money. Coupled with the high valuations that shopping comparison engines have bagged in the last few years, it may be a smart move into a lucrative segment.

Comparison engines have been the rage for a few years. Much before the dot-com bust that happened around 2000, Amazon.com acquired classification technology firm Junglee, a site that helped Internet users choose from different products online.
In 2005, the second generation of shopping comparison engines saw big buyouts. Online auctioneer firm eBay bought Shopping.com for $620 million, while media giant E.W. Scripps bought Shopzilla for $525 million the same year. Another site, PriceGrabber ,was acquired by Experian for $485 million.

“There’s a lot of money in this and entrepreneurs want a piece,” says Sucharita Mulpuru, retail analyst with Forrester Research. “It’s also the reason investors find the business so lucrative.” Like.com has raised $19.5 million in funding from firms including Bay Partners, BlueRun Ventures, and Leapfrog Ventures.

Shah, a graduate from Stanford University, knows the business well. He spent nearly five years as the CEO of Andale, a Sunnvyale, Calif -based company that helps small merchants put listings on eBay.

In 2005, he decided to focus on Riya. The idea was to let users tag their photo albums so users can later type in a name and search through their photos using Riya to find a match.

Riya’s idea of making facial search as easy text search made it a favourite among Valley bloggers. But the company lacked a clear business model. So, barely months after the site launched, Shah went back to the drawing board and started over as Like.com.

Like.com uses the core visual search engine of Riya and layers features on top of it. The site creates a “visual signature” for every image, or a mathematical representation of the image using 32,000 variables. If enough variables are identical to the search query, Like.com decides the images are similar. So users can enter a query for ‘red patent leather shoes’, or ‘brown argyle sweater’ to find results from a number of online retailers including Amazon.com down to the color and style.
It’s the direction the industry is headed in, says Mulpuru. Traditional comparison engines like shopping.com, or PriceGrabber are about getting the cheapest price. With Like.com, it is more about discovery. “It is about helping you find new items,” she says.

Getting to this point hasn’t been easy though. Shah’s decision to shutter his Bangalore office last April invited a barrage of criticism when he blogged about it. “Costs in Bangalore have risen and risen and salaries are now about 75 per cent of U.S wages,” says Shah. “At that point, it stops making sense for a startup to outsource so we offered to relocate some of our employees.”

Of the eight engineers who were given offers to move to the company’s headquarters in the U.S., only four finally came through. “The rest found jobs at higher pay in India,” says Shah.

Spreading the word about Like.com is his biggest challenge now, says Mulpuru. “To their advantage, they have a good URL (Internet address), and have gotten a lot of attention from blogger sand they have been pretty smart to carve out relationships with some of the big magazine publishers,” she says.

Mentions of Like.com in fashion magazines have brought in new visitors to the site and its traffic has doubled every quarter for the last four quarters both in revenue and users, says Shah. The site makes money every time a user clicks through to a merchant.

“They have has grown pretty rapidly given that the company is just about two years old,” says Mulpuru. “They seem to be in good shape.”

(The author is a Silicon Valley-based journalist)