Big tech news today with Facebook announcing its new Facebook Graph Search. Wall Street apparently didn’t like the news, sending FB down -2.74% on a day the rest of the market was pretty sharply up. I might need to lean in and pick some up.
I think it is a big tech story for 2013. I agree with David Weekly’s initial observation that this is a serious ongoing threat to Google. It’s a pretty obvious step for Facebook and I think its going to pay off for a few basic reasons.
First, it starts to highlight in a very mainstream way how Facebook has, in effect, become the internet for many people. People are spending so much time on Facebook that it makes sense that FB would invest in convening a “Dream Team” of Google Search engineers to do some semantic forking and NLP stuff to make Facebook the place you go for search. It makes all the more sense when you consider that Facebook content isn’t really searchable via Google–I can’t go to Google and search for that status update, photo, or meme you posted. Just doesn’t work. So an obvious strategic move.
Second, I think that there are a variety of scenarios where FB search could be quite disruptive in the shorter term–with local in particular. We are all connected to friends through Facebook, and I’d bet that a lot of accounts have a huge portion of friend connections who are nearby. The next time you need to know whether that new Chinese place is any good, are you really going to go to Yelp or Google, or would you like to see that 6 of your friends had “Liked” the place on Facebook. Local is a big kahuna market, and FB has a nice route to going after it.
Third, it’s a winning move in that FB is growing engagement and retention, and search (along with mobile) gives it a new avenue to continue driving this lift. Surely there’s an opportunity to go for the jugular over time with Google, and this is good for the industry.
A final point on Facebook’s capacity to disrupt Google in a major way… I remember reading an interview of Peter Drucker in 1997 or 1998, around the time that the Department of Justice was lining up to take on Microsoft for anti-trust violations. The interviewer asked the father of modern management what his opinion was on the anti-trust case. His answer, basically, was that in the case of the technology industry, the market moves too quickly. When a company becomes as big as Microsoft the seeds for obsolescence are in a sense already planted. He forecast that based on Microsoft’s size, some small, disruptive company that no one had yet heard of would step up to take on Microsoft in relatively short order. Though there’s no reason to think Drucker had ever heard of them in 1998 when the interview happened, it’s pretty clear that he was prophesizing Google.
Now certainly we’ve all heard of Facebook, so this time around is a little different. But at the same time, it’s not lost on me that in the same week that the Department of Justice announced it would not pursue action on Google after 2 years of investigation–the true sign of being a tech behemoth–Facebook announced its Facebook Graph Search.