Vertical search engines dedicated to specific categories are expected to eventually dominate the paid-search market, a research firm said Wednesday.

The bulk of spending on paid search today is in four categories, retail, financial services, media and entertainment, and travel, JupiterResearch, a division of Jupitermedia Corp., said. The four categories combined accounted for 79 percent of the $2.6 billion spent on paid search in 2004.

JupiterResearch expects to see more marketing dollars shift from broad-based search engines to vertical search, because the latter is better at turning online shoppers into buyers.

"(Broad-based search engines) are extremely good at navigating vast amounts of information, but extremely poor at moving the consumer through the purchase funnel," JupiterResearch analyst Niki Scevak, said.

As a result major search engines, such as Google Inc., Yahoo Inc. and Microsoft Corp.'s MSN, have launched vertical search engines in areas like retail and entertainment. Scevak, however, also expects to see an increasing number of startups compete for paid-search dollars in specific categories.

"(Vertical search) will become the primary piece of product development for major search engines and a wealth of activity among startups," Scevak said.

The trend is expected to cause a "sea change" in how advertising spending is allocated online, Scevak said. For one, media firms in vertical categories will be forced to embrace performance-based advertising pricing models.

The four dominating categories today are expected to remain strong for quite awhile, Scevak said. Today's search-engine giants are expanding their vertical search options into more of these categories.

For example, Yahoo acquired last summer FareChase, a travel search-engine vendor. Yahoo currently sells plane tickets and other travel services through a partnership with Travelocity.com.