Facebook Graph Search: Competition in the Market for Answers

by Ali Sternburg on January 16, 2013

Yesterday Facebook announced Facebook Graph Search, a new way of presenting the information it has aggregated.  CEO Mark Zuckerberg explained Facebook’s three pillars: (1) Timeline is a user’s personal story, (2) News Feed is for viewing recent highlights from friends, and (3) Graph Search is a way to search the profiles of friends and public information posted by anyone else.

People seemed underwhelmed by the announcement at first, because many were expecting a Facebook phone, but Graph Search has the potential to be a useful, transformative product offering.  Facebook has the unique ability to use information that only it has (“1 billion people, 240 billion photos, 1 trillion connections”) — information that users have chosen to share with it (or occasionally accidentally done so) — and provide useful tools for finding information and connecting people.  Graph Search also lets Facebook jump into markets dominated by various Internet companies that may not have considered Facebook a competitor — restaurant-finding sites like Yelp, recruiting resources like LinkedIn, and online dating services like eHarmony.  It additionally suggests that Facebook is entering the thriving market for web search.  As DisCo’s Dan O’Connor told All Things D:  “Facebook’s entry into the search market with a dynamic new product is clear evidence that the search market is competitive.”  Also note Steven Levy’s parenthetical in his in-depth Wired piece: “(This bears repeating: Facebook’s search product was led by two ex-Googlers.)”  In the meantime, however, Facebook is partnering with Microsoft, using its Bing search engine for providing search results when Graph Search does not come up with anything.

In a prior DisCo post, Dan explained how the market for search is evolving into the market for answers, an observation that remains relevant here.  The “10 simple links” or “10 blue links” conception of search is no longer sufficient to remain competitive and provide the information that users seek when using search engines.  People use search engines when they are searching for answers, not just links.

Graph Search is being rolled out gradually, and people can apply to join the waiting list to be an early beta tester.  Its natural language processing capabilities are currently only available in English, but other languages spoken by 60% of Facebook users are coming soon.  Ditto to mobile, which will be added in the future.  Providing answers to customers on mobile presents new challenges; people may be more likely to use a specific app they find reliable rather than using a search engine.

While Facebook has been criticized for creating features that appear to be inspired by other companies (such as Facebook Poke in response to Snapchat), Graph Search seems to be a genuine innovation.  Additionally, Graph Search is likely to please investors and boost revenue for Facebook, mostly in terms of increased advertising due to the customization it will be able to offer advertisers, but also in conjunction with its new pay-to-message feature.

In December, there was an informative article (which would be even more awesome if I understood the Game of Thrones references) in The Economist on Internet competition, focused mostly on Amazon, Apple, Facebook, and Google.  The article did an excellent job conveying the lay of the land and future strategic goals for these dominant players.  It also makes clear that what may seem like different sectors (search, mobile, e-commerce, etc.) are not completely separate; boundaries are becoming even more blurred, and companies are offering new products and services in areas occupied by competitors, due to low barriers to entry.

It comes down to this:  There are many different ways of getting the right answer and different Internet companies can leverage their platforms to confer unique advantages.  Competition is about finding the best way — or at least, a way that appeals to a large number of users.

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