Facebook Launches Assault on Google, Yelp, and LinkedIn With New Graph Search

By Sterling Wong  JAN 15, 2013 3:41 PM

Facebook users will soon be able to get customized search results based on their social connections.

 


Facebook introduced its new search function at a media event this morning at the company’s Menlo Park headquarters.
 
Called Graph Search, the tool allows a Facebook user to explore their network of friends and connections for information that has been shared with them.
 
CEO Mark Zuckerberg was on hand to showcase the latest product from Facebook, and he explained that Graph Search was different from a Google (NASDAQ:GOOG) or Bing (NASDAQ:MSFT) search in that it provides answers, instead of links to answers.


 
"With Graph Search, you combine phrases (for example: 'my friends in New York who like Jay-Z') to get that set of people, places, photos, or other content that's been shared on Facebook," wrote product manager Tom Stocky and engineering manager Lars Rasmussen on Facebook's official announcement blog post.

“Graph Search is a completely new way to get information on Facebook,” said Zuckerberg.

During his presentation, Zuckerberg also offered other search examples, such as: “Mexican restaurants in Palo Alto, Calif., my friends have been to” and “Photos of me and Priscilla [Zuckerberg’s wife].”
 
How does Graph Search work with Facebook’s partnership with Bing? Zuckerberg explained that when the tool is unable to find relevant answers for a query within Facebook’s databases, it will offer up Bing search results.


 
With its ability to offer up customized results for businesses and locations (“restaurants in New York City my friends like,” for example), Graph Search clearly poses a threat to Yelp (NYSE:YELP). And investors certainly feel the same. Yelp was down more than 7% on Tuesday afternoon.
 
Facebook also said that Graph Search is a tool for recruiting and dating purposes, which poses a potential threat to the likes of LinkedIn (NASDAQ:LNKD) and IAC’s (NASDAQ:IACI) Match.com. Facebook users could search for "friends of my friends who are single male San Francisco,Calif.” and get a list of results specific to them, based on their social graph.
 
For now, Graph Search is a beta product and will only be available to “hundreds or thousands” of its more than 1 billion users. The tool is also available only on desktops for now, with Zuckerberg saying that there wasn’t an estimate for a mobile launch. Monetization, likely in the form of ads, is also not a chief concern currently, the Facebook CEO said.
 
"This potentially could be a business over time. For now, we are focused on building user experience," said Zuckerberg. "We have had sponsored search results for a while... that extends quite nicely to this, but we haven't done anything new for this release."
 
Investors appear to be less than impressed with Graph Search, or at least its lack of a monetization channel. Shares of Facebook were down some 2.46% following the tool’s unveiling.

Forrester Analyst Nate Elliott, however, was more sanguine about the tool, saying that it will help to keep eyeballs glued to Facebook's website.

"Facebook's worst nightmare is a static social graph; if users aren't adding very many new friends or connections, then their personal network becomes less and less active over time," he said, according to CNET. "Terrifyingly for Facebook, that threat is very real: We haven't seen significant growth in the average number of friends per user recently. Graph Search seems designed to encourage users to add more friends more quickly. If it means users' personal networks change more frequently, and become more active, then that keeps them coming back to the site -- which is vital to Facebook's success."

Twitter: @sterlingwong
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.