This episode is brought to you by Liquid Scenarios. We're in the early innings of search, and there's much innovation to be done. At 10 years old, Google has defined the way people find information. Type in a keyword and receive a list of results. It's in those results that they try to convey as much information as they can, pixel by pixel. But will our children search differently? Will pictures speak louder than words? In this segment, we evaluate Searchme, a startup trying to improve our search experience by creating a visual overlay.

Who better to be our guest host, but Google's Marissa Mayer, VP of search experience and products. This is the second time Mayer was our host.

Searchme is a visual search engine that allows visitors to browse images of Web pages. The experience is like flipping through a magazine, and visually, it's similar to the scrolling interface of iTunes on an iPhone. There's also a little magnifying glass on each image that can be used to enlarge the content.

Here are some observations, suggestions and advice, Mayer and Ezra Roizen (Vator Box regular and digital media investment banker) made. 

- Browsing thumbnail images of a Web site page is useful when looking though pages previously visited. It may be the case that you can find a page faster, when flipping through images of pages that are familiar vs. reading snippets of text. 

- Visual search makes sense, when the UI is relevant to the problem. For instance, searching for fashion designs is likely a better experience through visual search over the typical headline/text search 

- Visual search doesn't seem to serve a person's searching needs when searching for something new and unknown, and data is relevant. Seeing a picture of a Web page isn't as useful as seeing quick snippets of relevant information surfaced to the top. 

- Visual search may not work well on a mobile phone. It's hard to understand or see the content in a thumbnail on a full-sized computer screen, making thumbnails on mobile phones even harder to read. As Roizen put it: "Taking a screen that’s scrunched on a regular screen and scrunching it down into a smaller screen is not going to work."  

- Searchme seems to be applying a deep-content experience to what's typically a scanning type of model

- The Searchme experience is a lean-back experience

- Mark Kvamme, Sequoia Parner, was quoted saying this about Searchme, "Searchme allows you to bring brand advertising back into search." Sequoia is an investor in Searchme. Both Roizen and Mayer disagree that branded advertising is should be in search-results pages. Here's how Roizen put it: "Why would you want to put brand advertising in the search. It’s the only place, you can have act-now advertising; it’s the only place click-through maters…. Taking the CPC out of search, throwing up banner ads, you have completely train-wrecked the business model you originally set out to create." Here's how Mayer put it: "If someone typed in golf clubs, why not serve them an ad for golf clubs... Why abstract that to a broader category of sports and serve them a random sports ad…. just sell them golf clubs."

- It’s often easier to get branded advertisers to advertiser against categories rather than keywords. But if SearchMe optimizes for categories, they will lose an element of relevance. Categories are a level of abstraction that is not useful to the end-user experience

Now, for our Liquid Scenarios Minute, a time where we look at exit strategies and valuation scenarios provide by our sponsor, Liquid Scenarios.

Searchme raised a total of nearly $44 million, with one of the most successful search engine investors, Sequoia Capital, who participated in each of Searchme's five rounds since the company's inception. Both Searchme's founder, Randy Adams, who led the design team for Adobe's Acrobat, and chairman Mark Kvamme, a partner at Sequoia, invested personally in Searchme's recent round of financing. 

This speaks highly of their belief in the venture. Searchme already has one million uniques going to its site, with longer average stays than typical search engines. The iPhone version became available Nov 19. Liquid Scenarios estimates it could grow to over one million users by Christmas. It's possible that growth in Searchme's mobile audience could drive users to its desktop version. Moreover, since the mobile and video search are the higher growth, hgher-margin segments today, the company should command a higher premium for each user and potentially be at a run-rate of $50 million to $75 million within the next 12 to 18  months.

At that rate, the most strategic fit might be with its development partner, Adobe. Assuming Adobe's pricing multiples return to normal, a stock deal to acquire SearchMe for $500 million would result in just over 2% dilution to Adobe holders, but potentially return five times that in appreciation within three years. Under that scenario, each of Searchme's existing investors would also receive return multiples consistent with venture-fund-return targets.

That's the Liquid Scenarios Minute.

(Note: Mayer was our guest for a Vator Box segment on Woome. Watch for upcoming episodes, where she helps us evaluate Appssavvy and Viewdle. Our next guest host will be Erik Stuart, director of corporate strategy at eBay.)