The most promising startup I saw among the four search startups was Pluggd. While mPire has a clearer path to success, I think Pluggd has a chance to build an even bigger business. The video search and advertising company pitched at the the Under the Radar conference being held today at Microsoft's Silicon Valley campus today. Panelists consisted of Canaan Partners' John Balen, Lockergnome.com's Chris Pirillo and Forum Nokia Americas' Doug McMillan.

Pluggd offers a search box that can be placed in the bottom of a media player that allows users to look for a specific part of the video. The results display a heat map with the color red indicating where the text can be found in that video. That allows the company to target contextual ads by matching ads with the contextually relevant part of the video. The business model looks like an ad network as Pluggd hopes to take a percentage of revenue from advertisers and a service fee from publishers that need help. The company recently closed a Series A round of funding but did not disclose the amount or the identity of investors.

I've summed up the question and answer period between Pluggd CEO Alexander Castro and the judges. Some are quotes and others are my best attempt at paraphrasing.

Nokia: How does the licensing model work?
There are lots of publishers that have different options to monetize their content by giving up control of it to places like Metacafe. I think people will be able to monetize content without giving up control over it by working with companies like us. For large media companies, they already have their sales force and are only interested in remnant fill, but we could charge them a service fee to make up for the fact that we’re not making ad revenue.

Canaan: There are a lot of companies we’ve looked at doing this. Virage was a public company. Are you an ad company or a search company?
Like another successful company, our goal is to do both. We enable user engagement. We allow people to find what they’re looking for and there's a direct relationship between engagement and revenue.

Pirillo: I don’t think contextual ads inside videos will work because it’s predicated on people clicking. You kind of minimized the importance of YouTube. Are you overlooking them?
We have a better user experience than YouTube. Not ready to talk about what that is but we will. YouTube is big now but that doesn’t mean it will be in the future. Expedia used to control online travel but eventually airlines started to compete and the role Expedia plays changed and people like Kayak have grown because they don’t try to control that. Seen that with eBay as well, which is struggling to grow in the face of shopping search engines. Seeing the same thing with video. Over time, people will be able to search and find videos without going to YouTube. YouTube will not host all the video on planet Earth for the rest of man’s existence.

For more on Dealmaker Media's Under the Radar conference, see:
Liz Gannes
Under The Radar

Tags: pluggd, undertheradar, undertheradar2007, vc, utr2007, utr, venture+capital