Graph Search, the new Facebook function that allows users to search specific tidbits about their friends, is generating lots of buzz among tech reviewers and bloggers who are split on what it means for rival Google.
At a packed press conference on Tuesday, Facebook CEO Mark Zuckerberg announced the development that allows users to search innocuous queries, such as "friends who like 'American Idol,'" to things that would give Facebook leverage over dating websites, such as "single friends in my town," to phrases that recruiters might use, such as "software developers in the area."
While users are limited to information only their friends have shared on Facebook — a response to the public's growing internet privacy concerns — users can still search any information outside of their networks, as before. Facebook incorporates Microsoft's Bing to yield the non-shared results.
Graph Search is in beta with a few hundred thousand users. There's still no expected roll-out date.
The social networking giant selected Bing over search engine giant Google as its partner to develop Graph Search.
"Microsoft was more willing to do things that fit with Facebook,"
said Zuckerberg. "People want flexibility, and that was the stumbling block with Google in our last round of talks."
Technology bloggers and journalists are divided on what this means for Facebook in its bitter rivalry against Google.
Charles Arthur of
The Guardian says the move puts Facebook and Google on a direct collision course. "A very slow, gradual one, but collision nonetheless," Arthur writes.
By contrast, Romain Dillet
of Tech Crunch says the stock prices speak for themselves.
Google's stock price barely budged following Tuesday's news of Graph Search. On the other hand, Facebook stock dropped following the news, from $31 to $29.95 a share. Before the announcement, as anticipation built, the stock had inched upwards.
Facebook’s IPO price was $38 a share on the company’s first trading day in May. By August, the stock dropped to its lowest price at the time — $19.69 — as the initial lockup expiration kicked in.
Many bloggers agreed Graph Search is bad news for Yelp and Foursquare, as Facebook's search gives users personalized reccomendations for restaurants and local businesses from friends, rather than a series of reviews from strangers. Likewise, LinkedIn is at a disadvantage. The social network for professionals offers a recruiting service for a premium, while Graph Search's ability to search for qualified applicants is free.
Seemingly everyone on the blogosphere recognized the profit potential for Facebook.
Mashable's Todd Wasserman posits Graph Search is a goldmine for Facebook's "Sponsored Results" — which will pop up everywhere. Tech Crunch's Josh Constine pointed out the tool will drive more Bing advertisements.
Debra Aho Williamson, an analyst at eMarketer, says she believes Facebook will roll out another search ad unit in addition to Sponsored Results. She sees two possibilities: Search ads on the right-hand column, and ads that show up in the top of search results, rather than in the second tier.
Nevertheless, the ads are effective, Wasserman said. Click-through rates for Sponsored Results ranged from 0.7 percent to 4.1 percent in September for a sample measured by researcher Optimal. Even at the low end of that range, that's 10 percent better than Facebook's Marketplace ads.
"Sponsored Results is a fair stopgap solution," Wasserman wrote.
Whatever ad unit Facebook winds up using, Williamson points out that Facebook's huge size will make it one of top players in search. If Facebook gets just 10 percent of its revenues from search ads this year, it will have made around $268 million. That would make it the fourth-largest player in search, ahead of AOL.
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