Everybody loves to look at the search terms that people type into Google and other search engines. I’m convinced that’s half the reason people wanted to write about the debacle that erupted when America Online released all those search histories, and it’s why people like to look at Google Trends and Technorati’s Buzz and all those other trackers (if only we could get a look at that giant screen in the Googleplex that scrolls real-time search requests all day long).

Markus Frind, the founder and sole proprietor of the massively successful online dating site Plenty of Fish, has an interesting theory in one of his recent posts. The post is mostly about how Markus’s site ranks compared to other international dating sites (answer: number three), but the interesting part for me was right at the end, where Markus says that searches for info on new homes correlates extremely well with real economic data such as housing starts. His theory:

There will come a time when traders, banks etc pay more attention to keyword search data then government housing stats and other economic reports that are months out of date. I predict in the next 5 years search data such as trends in search terms like “buy new home” will have major impact and move markets and reports on housing starts will do nothing.

Is Markus out to lunch? I’m not so sure. He might be overstating the case, but I think he is on the right track, and that search data will become (is becoming) an ever more important indicator of consumer behaviour, or potential behaviour. In an interesting coincidence, my friend Paul Kedrosky posted something recently on what Google searches — categorized by region — might indicate about housing bubbles (or fears of same) in the offing.

As more than one observer has pointed out, one of the benefits of being a Web-based startup is that you can get a lot farther with less money, to the point where some Web 2.0 companies such as Flickr, del.icio.us and Writely made it all the way from tiny startup to multimillion-dollar buyout by one of the Internet majors without any large-scale financing whatsoever.

The founders of Dabble DB, the Vancouver-based interactive Web database provider, say they had every intention of avoiding the usual venture-capital rodeo. And yet they just announced a financing deal (rumoured to be about $2-million U.S.) with Ventures West of Vancouver, a deal brokered by Ventures West advisor — and now partner — Paul Kedrosky, the Canadian-born and San Diego-based VC behind the blog Infectious Greed.

So what changed their minds? The two co-founders of the company, Andrew Catton and Avi Bryant — who tend to finish each other’s sentences, which makes it difficult to identify who said what in a conference-call interview — said before they got in touch with Paul (who I got to know in the lead up to the mesh conference I helped organize last month in Toronto), they had gotten a lot of interest from venture groups such as Hummer Winblad, particularly after they showed off their service at the venture-capital oriented Under The Radar conference in March. But they turned them all away.

“We joked about giving them the ‘soft no’ response,” the co-founders said, since that’s how many VCs describe their response to companies when they are trying to let them down easily. “But we tended to shut them off pretty quickly. We weren’t playing hard to get — we just didn’t want their money.” The two twenty-somethings said they didn’t want to go down the usual Silicon Valley route of having to give up a large stake in the company and/or board seats.

Paul described the co-founders’ reaction to traditional VCs as “almost an allergic response.” But he offered a middle way that appealed to the company. “I told them what I had in mind as a sort of entrepreneur-friendly approach,” as opposed to the traditional Silicon Valley model, he said in an interview. In addition, “most of what they would have gotten [with a traditional VC] is access to board members and access to the buyout channel, and with me they get those things anyway because I know all those people.”

The upshot for Dabble DB is that they get funding from a local VC, but one with contacts in the Valley, and they only have to give up one board seat (to Kedrosky) and they don’t have to move to Silicon Valley — as StumbleUpon, formerly based in Calgary, did earlier this year.