James Fallows' article in The New York Times: At I.B.M., That Google Thing Is So Yesterday, reports on his visit to IBM's Thomas J. Watson Research Center and some of what Big Blue is up to in the search arena, including their Piquant "answer agent", OmniFind, and other projects that utilize their unstructured information management architecture (UIMA).
The NY Times doesn't include a mention of IBM's frequently discussed unstructured data project named Web Fountain. You can learn more about Web Fountain in this Searchblog post and this compilation of articles from ResourceShelf. I've also noticed IBM racking up a large numbers of search related patents in the past couple of years. You can find links to a few of them via this page using and edit/find for "IBM".
Mr. Cicollo, the [IBM] search strategist, said that in a way his team was trying to match - and reverse - what Google has achieved. "As Google use became widespread, people began asking why it was so much easier to find material on the external Web than it was on their own computers or in their company's Web sites," he said. "Google sets a very high standard for that Web. We would like to set the next standard, so that people will find it so easy to do things at work that they'll wonder why they can't do them on the Internet." How soon might this happen? He said, with a chuckle, "Well, if I could freeze what everyone else is doing, it could be in two years."
Btw, you can also read about IBM's Marvel (video search) project in this blog post from September.