Facebook’s New Graph Search Has Huge Potential: The Ultimate Discovery Engine?

Gianluigi is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Facebook (NASDAQ: FB) CEO Mark Zuckerberg unveiled Facebook Graph Search last January 15th. So what is it? It’s a social search feature that will enable users to search more targetedly, more contextually. Example, if users search for “who of my friends have been in Amsterdam”, Graph Search will return the user their friends that have been to Amsterdam alongside relevant content. The second, impressive, aspect of Graph Search is that it includes affinities and experiences. It aggregates all the shares, such as check-ins, updates, comments,  tagged images and what more. This rich context could be something that is very valuable because it does not understand individual actions alone, but understands the complete user.

Examples of applications

So where could Facebook Search Graph be used for?

Think of the following purposes:

  • Business: find what businesses have been used/visited by the user’s Facebook friends;
  • People: find Facebook friends with similar interests;
  • Locations: find what locations were visited by the user’s Facebook friends and
  • Entertainment: find what games, films, shows are being watched/liked by the user’s Facebook friends.

Is this the ultimate ‘holistic’ discovery engine?

In the time that I was heavily involved in Search Engine Marketing, Google deployed something called “Contextual Advertising”. That was quite interesting, but the disadvantage was the system was content-centric. It showed ads based on the content of the website. Based on all the data we had, in terms of ROI this was not as good as Google search ads.

First because people are not actively searching, but reading content, secondly, and more importantly, I my experience, content is not the most effective determinator of action. Just because people read an article about topic X, it doesn’t mean their behavior is one of actioning on it.

This is where Facebook Graph Search gets very interesting. Graph Search is a holistic, more behavioral type of search engine, a discovery engine where users get ‘answers’ that are influenced by the people and their actions in the network.

Numerous researches have shown that consumers have more trust in their peers than advertising. Facebook combines the two!

The business model behind Facebook Graph Search

I could think of two monetizations of the Graph Search, one B2C and one B2B:

B2C: provide sponsored links just as Google and other search engines do at the moment.

B2B: provide an intelligence-as-a-Service solution to businesses who want to have a better understanding of their target audiences.

I have always worked with a lot of data, and still surprises me that a lot of companies do not think of monetizing this new ‘oil’.

Competition: what does it mean for Linkedin and Google?

Google (NASDAQ: GOOG) is a knowledge company, information is great and that is what people look for, but focussing on the information itself is less effective in my opinion than Facebook’s alternative that offer a more holistic engine. What Facebook's Graph Search smartly adds is social proof, a social layer that influences provided information. When you look for something in Google, it's based on -mostly- the information itself. Now Google is looking to integrate more and more social indicators, but it's different from Facebook.

Facebook has share buttons all over the place, combine this with action on the platform itself and Facebook has a massive amount of big data to offer very relevant and useful -socially influenced- information. Google has this also through Google+, but the amount of time spent on Facebook is higher, and exactly this attention makes Facebook so powerful.

Google still reigns in search engine land, Youtube (owned by Google) is still the second largest search engine so Google still makes great revenues by them.

IF customers buy into the Facebook discovery engine, with a billion users, Google could get –finally- serious competition.

Why? Because Facebook is for many people their starting point. What if people don't have to leave Facebook's platform because everything that people needs, can be found of Facebook?

Attention and time spend equals revenue!

LinkedIn (NYSE: LNKD) on the other hand is a vertical / niche network, focussed on professionals, with its own purpose. I don’t see Graph Search affecting much Linkedin. Linkedin has interesting demographic search filters, and could be definately enhanced with additional ‘behavioral’ filters, but the purpose of Facebook versus Linkedin are for many professionals very different.

But, the two networks might be different, the catch is that Facebook is a platform unlike Linkedin. Three years and 25+ million registered users after launching its professional network for Facebook, BranchOut is LinkedIn's biggest competitor.

BranchOut shows users which of their Facebook friends (or second or third level connections) work for a specific organization. With BranchOut users can connect to their pre-existing Facebook graphs. The interface works a lot like LinkedIn from there: users can fill in their work histories, send messages to their connections, collect endorsements and so on.

When BranchOut is able to tap into the Graph Search API, this could mean very awesome information that Linkedin is not able to provide. Think about jobs and understanding a company better beyond the professional layer. Graph Search is able to humanize the company so that people can assess companies better, job descriptions, type of people who work there and so forth. None of this can be provided by Linkedin. Facebook is an enabler for others to disrupt Linkedin and Graph Search is a serious tool to do so!

Bottleneck

One of the more obvious bottlenecks can be the privacy issue. If an individual person’s activity is used for advertising this could cause tension from various groups. On the other hand, for networks like Facebook and Linkedin (free accounts), the people on it are the products and it’s up to the individual person to decide what it does and doesn’t.

What do you think of the potential of Facebook’s Graph Search?


GLCuccureddu has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google, and LinkedIn. The Motley Fool owns shares of Google and LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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