Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Graph Search Makes Facebook Jump -- and Fall

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

People love to hate Facebook (NASDAQ: FB  ) , even when they're constantly checking its mini-feeds. After the dramatic unveiling of the social media empire's new search engine yesterday -- "Graph Search" -- Facebook's stock price went up 2%. Then, ever the fickle beast, the market dropped Facebook 0.5% below its pre-announcement price, all in that same day. Could Graph Search help Facebook eventually work its way back into the market's good graces? And should Google be worried?

You'd think they'd give it a zippier name
The ambitions for Graph Search are ginormous, and that's putting it lightly. With the new tool, users can search on Facebook for any number of subjects (like restaurants, as CEO Mark Zuckerberg demonstrated). The website then pulls up recent relevant results, as posted and "liked" by the user's friends.

The search engine is Facebook's first stab at trying to convert its massive amount of content into the huge potential it had long been acknowledged to have in search. Having a search engine would give advertisers even more incentive to promote with the website than before, because now, instead of getting a number of half-hearted "likes," companies working with Facebook will have a direct line of users interested in their services.

If this proposed situation works, Facebook will have accomplished what Google never could with its own Google+: it will have created a successful, searchable social network. Since Google borrowed heavily from what made Facebook unique to create Google+ (i.e., the concept of posting content for one's social contacts to see), it's no surprise that Zuckerberg would want to return the favor and see if he can do it better... and well make some money in the process.

Bitterness lingers after the IPO burn
It's difficult to analyze Facebook's ins and outs as a company when it hasn't even been public long enough to release a 10-K. Judging from the figures in its latest 10-Q, the company has gained revenue of over $1.3 billion. This may be nothing to sneeze at, but it's also small potatoes compared to Google's most recent quarterly revenue of $14 billion.

The audience for Graph Search's announcement is huge, but the aftermath of the IPO debacle seems to have left all of them jaded. Zuckerberg also has yet to provide any solid evidence that Facebook will be able to reach this level of income. Graph Search could be the next big thing for Facebook, but Wall Street will believe it when they see it.

There are certain facts every investor needs to know about Facebook. We've outlined them in our newest premium research report. There's a lot more to Facebook than meets the eye, so read up on whether there is anything to "like" about it today, and we'll tell you whether we think Facebook deserves a place in your portfolio. Access your report by clicking here.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2199460, ~/Articles/ArticleHandler.aspx, 9/29/2016 1:15:53 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 3 hours ago Sponsored by:
DOW 18,339.24 110.94 0.61%
S&P 500 2,171.37 11.44 0.53%
NASD 5,318.55 12.84 0.24%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 4:00 PM
FB $129.23 Up +0.54 +0.42%
Facebook CAPS Rating: ***
GOOGL $810.06 Down -0.67 -0.08%
Alphabet (A shares… CAPS Rating: *****