October 1, 2012
Make no mistake: Facebook (Nasdaq: FB ) is getting into search. Not only did Mark Zuckerberg all but confirm such a move recently when he said the social networker is already working on it, but COO Sheryl Sandberg echoed those sentiments in a recent interview with CNBC. That's a competitive battle cry aimed in Google's (Nasdaq: GOOG ) general vicinity as Facebook continues to further encroach into Big G turf.
An ex-Googler herself, Sandberg wants to add a social aspect to search and believes this is a need that's thus far remained unfulfilled by incumbents. She calls it "surprising" how much search is done on Facebook. Leveraging Facebook's position as the largest social network can tap into what she refers to as the "wisdom of friends" over the "wisdom of crowds." Presumably, a restaurant recommendation from a Facebook friend will carry more weight than a generic Internet query.
Both Google and Microsoft (Nasdaq: MSFT ) have been working hard to implement social features in their respective search engines, but integrating it as a secondary functionality would be different than a search engine based primarily on social interactions -- which would, of course, be Facebook's angle. I wouldn't be surprised if Microsoft, as a Facebook investor, is helping the company build an offering, maybe even using Bing to power the search much like Bing powers Yahoo!.
Still, a direct Facebook search engine sounds a bit awkward. It's hard to imagine going to Facebook's site first to search the Web. Integrating social as a secondary layer sounds more promising and natural. It'll be a tough balance and thus far no company has successfully challenged Google in domestic search. Any search success that Facebook sees would likely be modest at best, but I'll give it credit for stepping up to the challenge.
Search is but one of monetization strategies that Facebook is exploring. The company has plenty of potential, which I've outlined in this premium report. Click here to grab a copy.