PAN is on its annual pilgrimage to San Jose for the W. Coast version of the Search Engine Strategies conference series. Although they’re all great, we love this particular location because the vibe is so different from New York and Chicago. San Jose and the rest of the Valley is the unofficial heart of the innovation economy, and that thread runs through the entire show. You simply can’t come here for a search engine marketing conference and not also become (or become more) enthralled with the web’s startup culture.

But back to the show. Although not official, it’s becoming clear that engagement, or how to measure peoples’ attention on the web, has risen as a key performance factor for all things search.

Microsoft’s keynote, delivered by its SVP of Search, Satya Nadella was interesting for the obligatory facts and figures–it’s a $15 billion dollar business right now and growing; MSFT’s share of the search market finally grew to 9.2 percent, or more than one billion searches in June; and so on–but in his talk were ideas more notable for trying to define engagement.

Did you know (or care) that more than 50 percent of searches conducted last longer than 30 minutes? Even if it’s not interesting to you, it’s definitely of interest to the search engines. Think about it: web sites have to work hard to keep users on them longer, but search engines actually own those searchers for all that time. So what do they do with them? The same thing they’ve always done, serve ads. The engines are realizing there has to be more ways to monetize searchers’ engagement, right?

One vexing issue to measuring engagement is figuring out intent. The engines still don’t know with real accuracy what you the searcher want to do. All they really know is where you’ve been. It’s even more difficult to divine searcher intent when close to 50 percent of search sessions are for things a particular person has searched before, so there’s a lot of wasted effort compounding the problem. Social search engines are beginning to address this and again, engagement seems to be a key in narrowing focus.

Measuring engagement is even more important with multimedia content flooding the web. There’s more of everything now–especially video–and the social interactions around that content and its context, such as comments and tags are great tools for measuring engagement.

There’s a nice cottage industry popping up around engagement now. One of the better tools for it is Summize, which tracks topic conversations on Twitter. If a measurement of engagement includes conversations, and conversations are markets, then the guys at Twitter may have just bought one of the best market barometers around. If they keep the Fail Whale from finding it Summize could become as important to search as contextual advertising has been over the past decade.