A "search engine for apps" sounds stupid nowadays because it's impossible on iOS. But back then, jailbreaking was quite popular. Many Quixey employees (and many people in silicon valley) had jailbroken iPhones. iOS 3 was pretty limited and limera1n worked on every iPhone. Piracy was still mainstream. Spotify sounded stupid back then because Grooveshark was so much better. It was inevitable that Apple would cave in and open up its platform any day. And if Apple didn't do that, Android would eat their lunch.
Then Steve Jobs died, and Tim Cook released the iPhone 4S, the first iPhone you couldn't jailbreak easily. The rest is history.
Mobile was a new landscape, and it was a tough problem to solve. Plus they were going up against Google so there was a sense of FOMO if you weren't in on it. The thinking was, maybe there's a 1% chance it pays off and Quixey beats Google.
(Google employee now: views are my own)
This article discusses what went wrong with their finances, but doesn't discuss what happened with the product (app search, app deep-linking): https://www.axios.com/behind-the-fall-of-quixey-1513301224-0...
Someone downvoted my comment. Stay classy, HN.