Facebook Introduces ‘Searching Your Social Graph’ January 21, 2013Posted by Ishmael Chibvuri in Latest Articles!!!.
"If Facebook would decide to become serious about search, it would be in a position to give Google a run for its money," said Karsten Weide, an analyst with IDC, a financial research company. And this is what evolved Tuesday!
Recent stock rally
The recent rally occurred as Facebook (FB) zeroed in on new ways to make money for a skeptical Wall Street and it appears investors like what they saw. It created more ads for mobile news and expanded the concept of "retargeting’ which tracks what users search for outside the Facebook platform and tailors advertisements accordingly when users return to Facebook. It also has encouraged users to buy gifts for their friends charging users to make sure a post or
message is seen by more of their friends.
These moves by Facebook are welcomed by investors, but I would not be surprised if this rally is all orchestrated peaking with the big staged announcement. I believe the announcement of the new search system and its timing was designed to lift the stock about the same time that employees could now sell their stock. Is it a coincidence that timing turned out as it did? I believe not. Nevertheless, the new search concept is intriguing.
Facebook and the "Search" Concept
The data Facebook collects is a powder keg of revenue just waiting to happen. With all the pictures, likes, and status updates, it has a wealth of information. Now it needs to figure out how to turn it into revenue. Could this information, properly processed into a search pattern, rival Google (GOOG)? It could be one of the things investors are anticipating as the stock continues to rally. As Facebook continues to explore ways to make money, the concept of "search" revenue is very intriguing indeed! Facebook has aggressively expanded its staff of search engineers in recent months. It now has nearly 100 devoted to cracking the search puzzle, led by a former Google engineer, Lars Rasmussen.
Facebook’s advantage is its social data. As "search" is the holy grail of revenue for companies like Facebook, Google, and Yahoo, FB has to figure out how to take that data and organize it into a revenue source.
They have Developed a "Social Graph" Search
and the depth of a search boils down to information shared with you and how close you are to people. People get to search things that relate to them: people, photos, interests, places… it is "their" internet, not the internet as a whole. As an example, one searching for a restaurant can now search for a place that friends have gone to and don’t have to do an extensive search on Google. How convenient is that?
How will privacy issues affect this search? It is obvious that a "search" concept benefits from less privacy and if Facebook pushes people to be more open and less private, it could have negligible effects.
How is it different than a web search?
Instead of delivering links with answers, it just delivers answers. Zuckerberg called it searching one’s "social graph." So now I ask the question: how is the Facebook search different from the broader web and what makes the content search so unique? Instead of searching generically on the web, one can search for things that friends like. As an example, if you are searching for a new doctor to see, you can do a search on Facebook and get a list of names that your friends already like.
So how will Facebook turn this into revenue? First of all, keeping people on Facebook when they are searching and away from Google means more ads for the company. The only limitations are on privacy issues. The more use of privacy, the tighter the search will be. So this can be something that limits searches for people depending on how much they use privacy settings.
What does this mean for Investors?
This could mean a boondoggle for investors if Facebook can design the search so that people can continue to find out what their friends like and recommend. It is a very powerful concept when a simple search for a restaurant in a certain area of your city can bring up the top recommended restaurants by your friends. This could translate into more ads for Facebook and it could also create more use of the site for searches as well as businesses using the site to promote their businesses. All this translates into more revenue and an increase in value for the company and shareholders