From Sunday’s NY Times article by Randall Stross, and the resulting spin, a couple of notable takeaways:

Profit margins in the search business are mind-boggling, and cannot be obtained in other segments of the technology world. Google’s net profit margin last year was 29 percent. Amazon’s was 1.8 percent — yes, that is a “1” followed by a decimal point. Which business would you rather be in?

Wow. What a great way to make a strong comparison and highlight the strengths of the current online market. I guess it pays to read the annual reports. Though it confirmed my lingering suspicions, it’s pretty wild to see the bottom-line contrast between these two leaders of the Long Tail market.

At the same point, the fact that Google success was built upon providing quality access to the Long Tail seems to have been completely ignord by Mr. Stross. Whether or not Mahalo has a more comprehensive search result for Paris Hilton is irrelevant to the vast majority of search activity, and once you’re out of the short tail, the results are, well, lacking. A Google search for “MX Championships” gives me a full range of relevant links to the sport, and even though I need to hit page 2 before finding the upcoming event I promised to take my thirteen-year-old to, every link provided is relevant to the sport of dirt biking.

The same term on Mahalo brings up an apology and results for Mazda’s Miata, Women’s Professional Golf, Ultimate Fighting and Extreme Wrestling. Even if they reach their goal of doubling the current list of the 5,000 top searches, the real challenge is to provide a dependably valuable user experience across the majority of searches in order to keep any amount of consistent market share.

But it’s too early to draw conclusions. Given the financial realities of the search market, there’s great impetus to develop alternatives and monetize even a relatively small segment of traffic. Jason Calacanis is well positioned in the industry; Wikipedia has set the stage for the development of social search, and Google has certainly taken notice.