Will Facebook become the Amazon of Big Data?
Jonathan is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Even though it is best known as an on-line retailer, Amazon (NASDAQ: AMZN) is a major player in the cloud. With its new Graph Search, Facebook (NASDAQ: FB), the social media giant, could become just as prominent in Big Data. For Foolish investors, that could provide a tremendous boost for the share price of Facebook.
The cloud is the provision of computing services (hardware and software) over a network, generally the Internet. Big Data is the term for utilizing the massive amounts of information that exceed the capabilities of traditional software packages to capture, manage, and process for commercial purposes. From an article in USA Today about Big Data:
Welcome to your everyday world of 'Big Data,' the infinite sea of facts, products, books, maps, conversations, references, opinions, trends, videos, advertisements, surveys -- all of the sense and nonsense that is literally at your fingertips, 24/7, everyday from now on. Eric Schmidt, Google's executive chairman, estimates that humans now create in two days the same amount of data that it took from the dawn of civilization until 2003 to create.
The potential revenue from both the cloud and Big Data is enormous.
Needless to say, this has drawn behemoths such as Google (NASDAQ: GOOG), Microsoft, and Apple, among others, into the sector. Amazon is a dominant player in providing services for the cloud, which Gartner, a research group, estimates to be a market of over $100 billion already. Deepfield, another research entity, estimates that one-third of Internet users visit a website powered by Amazon Web Services, its unit for the cloud.
From its start selling books over the Internet, Amazon developed an expertise in building advanced computer systems that has evolved into a position of primacy in the cloud. From searchcloudcomputing.com, the top players in the cloud for 2012 were Amazon at #1, and Microsoft at #9. With its new Graph Search, Facebook could ascend to a similar lofty perch in Big Data.
Graph Search is a feature that "helps users find connections to people and places that have always existed in the graph. In a sense, it’s a clean interface into the breadth of Facebook data that people have entered into Facebook, but contextualized to each user."
Having over one billion users that account for one-fifth of the daily page views on the Internet, the amount of data that Facebook encounters in a continuim renders to it a tremendous competitive advantage for exploiting Big Data opportunities. Google and Microsoft are also similarly situated due to the dominance of the Web browser and search engine for each.
One of the new areas of Big Data development that Facebook should command is in trend analysis for social media interactions. About this, an article in USA Today reports that, "Facebook is heavily invested in this science for reasons of economic survival. The company reports your likes to marketers eager to in turn serve you up offerings you're supposed to crave."
From the Big Data efforts of Facebook, advertising and marketing efforts will be much more efficient for clients. That will make the results of Graph Search even more valuable. As an example of this, Comcast found that addressable advertising over the television to narrowly defined groups such as renters was 56% more efficient and 38% more effective than mass advertising.
For this type of Big Data deployment utilizing social media, according to the UK market research firm Trendstream’s Global Web Index (GWI), the top five for active users in December 2012 were:
jonathanyates13 has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Facebook, and Google. The Motley Fool owns shares of Amazon.com, Facebook, and Google. 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!