I'm not trying to start a rumor here. I have no insight into whether Dave Sifry (left, from Marc Cantor's blog) has considered any offers for his Technorati site, nor how he would react if one came in.

But since Barry Diller bought Bloglines (via AskJeeves) Technorati's performance has been falling behind that of its rival.

Robert Scoble (who works for a possible acquirer, Microsoft) offers the numbers, three times as many links to Sifry's own blog from Bloglines as from his own engine.

There is a vital lesson here about the technology space:

When the adoption curve steepens you need deep pockets.

The S-Curve here comes from Mark Paulk of the Software Engineering Institute, and dates from 1999.

Every product goes through three different environments on the way to market acceptance. Growth is slow at first, as the "cool kids" get ahold of it and approve. Then there's the rush by the mass market, which is where sites like Technorati now sit. Finally there's the peak of acceptance, where replacements become the norm.

I've written before that the price you charge for something should be at the high end when you're at the bottom of the curve, in order to maximize revenue, and at the low end at the top of the curve, making up lower profit margins on volume.

But if you can't get through the middle part of the curve you're not going anywhere.

And that takes money.

• You can self-fund it, as Google has done and as Apple did with the iPod
• You can sell out at the front of marke acceptance, as Mark Cuban did with Broadcast.com; or
• You can fight the losing battle and die.

Your choice, Dave.