As search giants reshuffle, VC scoops up talent

As both Yahoo and Microsoft see their share of the internet search market lose ground to Google, they are quickly seeing executives leave. Yahoo’s web search VP is the latest to make the move from internet giant to venture capital firm. Dave Keating reports.

It’s been a tough time to be an executive in the search departments at Yahoo and Microsoft. The snowballing success of Google has left the two former giants of internet search in the dust. For instance, Yahoo’s first-quarter revenue for 2007 was $1.67 billion, less than half Google’s $3.66 billion.

Both companies have seen a slew of executive departures recently. In the last month, Microsoft’s search property saw two top executives, Dane Glasgow and Christopher Payne, leave.  In December, Yahoo had a major executive shuffle where several executives left.

Andrew Baccia

Now Andrew Braccia, vice president of consumer web search for Yahoo, has left the company to join Accel Partners, a Palo Alto-based venture capital firm. Braccia will be principal and will identify investment opportunities in the consumer Internet and software sectors focusing on search, digital media and online advertising.

This isn’t the first time Accel has lured someone away from Yahoo. In October 2006 Accel hired Simon Levene, previously managing director at Yahoo, for their London office.

“I have always been passionate about entrepreneurs and early stage companies, and being able to work with people when they’re building something from scratch,” Braccia says. “Venture capital is a great vehicle in which to help identify and help build the next generation of companies, so I’m excited about that.”

“Internet search is becoming an increasingly important activity as the web has grown in size and scale,” he adds. “That’s probably the biggest change I’ve seen. As the internet gets bigger, search engines have had to match that.”

Although Braccia’s has been with the search division at Yahoo for six years, he has also held a number of other roles at the company which he says will enable him to focus on a wide variety of internet opportunities. He joined Yahoo straight out of college in 1998, and since then he has worked with a number of start-ups that Yahoo has acquired over the years including, Flickr, Alta Vista, Inktomi and Overture. He also formerly ran the marketplace division at Yahoo.

“If you look at my background, in my nine years at yahoo I did a variety of different things, so I’m intimately familiar with the online congress, especially social media,” he says. “I was part of the team that launched the answers product and acquired delicious. I’m intimately familiar with online advertising and community-building products that have basic media models attached to them. Now what I’m Focused on broadly is consumer internet, search, given my background, but also community, digital and social media.”

Given that even the big search players have had difficulty competing with the Google juggernaut however, VCs may be displaying an element of caution about investing in young start-ups that are proposing new search solutions. Accel itself has made its investments mostly in social and digital media. The firm, established in 1983, has many web 2.0 portfolio companies including Facebook, Brightcove, Glam Media, Metcafe, Propser, BitTorrent and AdMob.

Still, Braccia says there is still room for new players in internet search. And some are getting VCs attention. New York-based Hakia, for example, just raised $16 million in funding for its meaning-based search engine, which they hope will mimic the brain’s cognitive skills.