Can Facebook's Graph Search Compete With Google?

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

Back in April, I wrote an article stating that Facebook’s (NASDAQ: FB) replacement Android launcher, Facebook Home, was a possible threat to Google’s (NASDAQ: GOOG) dominance of smartphones and tablets. However, Facebook's plan never panned out, due to its clumsy, overbearing design of the launcher and poor reviews. The premiere “Facebook phone,” the HTC First, which was sold with Home pre-installed, also bombed, and was pulled off the market after only a month. In other words, Facebook woefully overestimated its own clout in the market.

However, the failure of Facebook Home hasn’t deterred CEO Mark Zuckerberg’s plans to take on Google. He recently announced a broader rollout of its Graph Search engine, which was introduced earlier this year, across the United States. Can Graph Search, which uses Facebook’s sprawling network of 1.1 billion users, change the way Internet users search for information, or is it doomed to fizzle out just like Facebook Home?

Liking vs. Googling

Graph Search is a search engine designed to search for friends, interests and places sorted by a user’s Facebook connections. For example, users can search for “Friends who like horror movies” or “Restaurants in Seattle my friends have been to.” The idea is to make their friends’ opinions the center of the searchable universe. It could replace other services such as recommendations site Yelp and Google’s map-integrated “Places” function with more personalized search results.

Facebook wants to show that searching the Internet via sites, links, posts and interests that their friends have “liked” is more effective than searching the Internet in the traditional top-down manner used by Google, Yahoo! and Microsoft Bing.

Good in theory, but lacking in foresight

Although Graph Search sounds like a good idea, since Internet users are constantly “liking” and sharing content, I doubt that it will ever replace Google.

The first problem is the lack of data. Although each Facebook user is a treasure trove of information, it pales in comparison to the amount of data that can be swept up in a single Google search. Graph Search results will also vary greatly depending on the number of social connections a user has. Graph Search might yield decent results for an average Facebook user, who has 141.5 friends, but it will be less impressive for users with less, and too broad for users with more. Graph Search is a walled garden, compared to Google’s wide open search frontier - and the latter is still a more attractive option to most Internet users.

The second problem is the conflict between Graph Search and its advertiser base. Companies advertising on Facebook often convince users to “like” their pages for special discounts, which leads to a lot of accumulated “dirty likes” which don’t properly reflect personal interests. It’s difficult to ascertain how many of Facebook’s 4.5 billion daily likes are “clean” or “dirty,” which can lead to misleading, convoluted search results.

Those two problems lead straight to Graph Search’s third problem - Facebook needs to grow its database of accumulated user information even larger if it hopes to succeed. Facebook users had just gotten used to the idea that their data was being farmed by advertisers, when the PRISM debacle revealed that their life stories were an open book for the U.S. government to peruse. This means that Facebook’s expectation of users to actively power its searchable database could grind to a halt, whereas Google’s passive combing of the Internet will continue unopposed.

In my opinion, Facebook Graph could challenge Yelp, but it will never threaten Google. However, Facebook Graph will be a valuable tool for advertisers, who can now precisely target specific demographics with their ads, which could be its saving grace.

Voice search and mobile platforms

Facebook currently has 751 million mobile users, which makes it an integral part of any hardware or software companies’ mobile strategy. However, Facebook has always been considered a social app, and one that ties into other games and apps that to connect via Facebook. It hasn’t been able to establish the sprawling ecosystem that Google has created over the past five years.

For Facebook, another challenge looms on the horizon - voice search. Ever since Apple (NASDAQ: AAPL) introduced Siri in October 2011, the mobile market has been enamored with adding voice search capabilities to mobile devices. Back in May, I discussed the voice search battle between Apple and Google, which kicked off when Google added its voice search capabilities to its Google Now app on iOS.

Since Apple has been trying to decrease its dependence on Google, it recently announced that Microsoft Bing would become Siri’s default search engine in iOS7, in an effort to reduce iOS users’ dependence on Google search. Since Google and Apple both firmly believe that voice search, although imperfect in today’s state, will eventually become the future of mobile search, will Graph Search be completely cut out of the loop? Or will Facebook need to add or integrate voice search capabilities to keep up with the times?

The Foolish Bottom Line

Facebook is like a hermit crab that has grown too big for its shell. It’s already smashed out of its original one - social networks - and now needs a new shell to grow into. Graph Search is a truly innovative idea to capitalize on the growth of the social network, but its growth depends on too many variables - the number of friends, their sharing behavior, and their willingness to constantly share personal information online.

Even if Graph Search grows the way Zuckerberg intends it to do, users will still be stuck in a walled garden in which search queries might be more personal, but far less reliable than a simple search on Google. However, I believe that Graph Search could still be a valuable tool for advertisers to craft targeted advertising.

In conclusion, Graph Search will be an interesting experiment for Facebook, but I seriously doubt that it is the game changer that everyone has been waiting for.

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Leo Sun owns shares of Apple and Facebook. The Motley Fool recommends Apple, Facebook, and Google. The Motley Fool owns shares of Apple, 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!

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