We left emerging search engine race horses galloping up the inside race track last time we scanned which engines are winning or losing, in Search Engines Duke It Out: Goliath vs. David vs. David’s Brother.

To recap: Yahoo! “knocked Google down a peg” in customer satisfaction – Yahoo! improved 4% in user satisfaction vs. Google’s 3.7% decline. Tier 2 engines showed greatest user satisfaction improvement (Ask.com) and largest customer satisfaction decline (AOL) in that same University of Michigan’s American Customer Satisfaction survey. We also noted the classic Little Guy vs. Goliath in search marketing: The Open Source Search Project called LAMP (or David’s Little Brother) is taking on Tier 1 Market Dominant Goliath, Google.

Not SEM Dark Horses Anymore

Did you spot two specialized search engines racing up the inside track toward the finish line? These emerging niche-targeted engines are Local and Vertical Search. They offer search marketing opportunities to wholesalers and retailers – from networks and databases accessed with focused keywords, to paid-ad programs that often deliver better returns on each ad dollar spent.

Local Search. Every time a reseller seeks suppliers with regional distributors, or when potential customers search for a place to purchase goods in a brick-and-mortar store, they enter geographic words to narrow their searches. Localized keywords include an address, city or zip code.

While Piper Jaffray Investment Research estimated nearly 30% of all search queries by end 2006 were “local searches,” researchers also estimated that most results listings still came from localized keywords entered into general search engines. However, that unfocused approach is changing.

Specialized local search engines rapidly close the gap with general search engines, whose results might be localized only if searchers enter the “right” keywords. Emerging local search sites include:

· Local Directories – Electronic databases from traditional phone book and business directory publishers, such as SuperPages.com (converted Yellow Pages listings); and YellowBook.com (competing local directories publisher who also converted to online listings and has localization contracts with major search engines for large metro areas across the U.S.).

· Local Tabs on Major Engines – Data management companies, such as Acxiom and infoUSA, acquire local phone book commercial listings and convert them to searchable databases. Such localized search channels are then licensed to Tier 1 search engines who feature Local Search site tabs. (Local.Google.com; Local.Yahoo.com; Local.Live.com and CityGuides.MSN.com)

Local search engines and major engine local channels offer paid-inclusion ad contracts, online display ads inserted in traditional yellow pages categories, and pay-per-click ad contracts. Piper Jaffray projected local search will hit 50% of all searches, and may reach $25 Billion in U.S. transactions. Specialized, local search engines are likely to continue up the infield and overtake smaller generic search engines.

Vertical Search. When searchers are professional or work-focused – and are more “cluey” – they bypass general search engines entirely. These niche-targeted and self-selected professional searchers jockey up to Vertical Search Engines.

Vertical search engines and directories are organized around an industry, profession or category of interest. Verticals are developed by industry specialists, and therefore deliver more relevant, topic-filtered results. (A 2006 Outsell study reported a 31.9% failure rate among business users searching on general search engines; respondents found too many irrelevant results.)

Specialized vertical search engines also deliver better returns on ad/marketing dollars — compared to conversion rates for paid-inclusion or pay-per-click ads run on general search engines — because VSEs attract more targeted, motivated searchers. (Based on research cited above, Outsell forecast a growth rate of 15% a year for business-to-business and specialized vertical search engines; projecting $1 Billion in VSE revenues by 2009.)

That’s why search marketing industry watchers now bet on Vertical Search Engines, labeling them “the new portals” and the “golden” track of search. By the way, the term “cluey” above, coined by Eric Cho at Search Engine Marketing Hints, describes how searchers are more specific and focused when they seek products, services and information online. (As in, they have more of a clue.) Cho predicted such “cluey” searchers push VSEs into front-runner positions, reaching nearly 50% of future search market share.

Examples of successful vertical search engines now overtaking Tier 1 and 2 engines for relevant search results and better ROI include:

· Network of wholesale vertical search engines/directories affiliated with TopTenWholesale.com. (You’re reading one of this network’s e-newsletters.) TopTenWholesale affiliate VSE communities serving wholesaler, importers, distributors and resellers of various categories of apparel and general merchandise include Wholezilla.com, OffPriceNetwork.com and WholesaleU.com.

· Business.com, VSE for business decision makers, which is being acquired by R. H. Donnelly, another specialized data operation in yellow pages and online local commercial search.

· Medstory.com, a specialized searchable database on drugs, procedures, clinical studies and medical experts.

When you plan winning campaigns – using search engine optimization, paid-ad campaigns and market-segmented search marketing — keep your eye on the local and vertical search engines pulling up the inside stretch. Dark horses no more!