With over a billion users, Facebook (NASDAQ:FB) is probably the biggest database for user information. The only company they have yet to take down is Google (NASDAQ: GOOG). Google became the giant it is by introducing a revolutionary search engine concept. Facebook's main source of income is advertisements. Earlier in 2013, Facebook announced a new search feature which could transform the search market and increase its top line as well. Yahoo (NASDAQ:YHOO) and Microsoft (NASDAQ:MSFT) also gave a go at the search market, and I'm pretty sure that they did not mint half of what they expected. Facebook right now would be worth a watch considering the latest moves they've been making in the search market. Facebook's recent acquisition of Atlas will help them attract a lot of advertisers and provide more search relevant data for analysts. What else does Facebook have in store for us?
Facebook is aiming at a large audience
With over a billion users, Facebook is well aware of the amount of data it has. It has already started developing its own search algorithms. As of now, Facebook has buddied up with Microsoft. Every search that involves results outside of Facebook would be backed by Microsoft's Bing. Facebook could fetch hefty paychecks through search advertising.
Going for the social kill
The first move of Facebook before challenging Google would be to kill competition from all other social networking websites like LinkedIn and Yelp. As of now, Facebook users can search for places their friends have visited, opt for restaurants after reading through the reviews posted by their own friends and the general public. Both of these two new functions are in its early stages despite Facebook already having 13 million fan pages of local businesses. These social tools give users a reason to stay on Facebook and helps increase its overall client portfolio for advertisements.
Facebook's Graph Search also has data of videos, photos, news, tastes, and more that are posted through millions of third party applications. This creates a social experience-related search engine which might be more useful for users. We'd rather have recommendations from our closest friends than go through an SEO oriented search list.
Google vs. the rest of the world?
Google took on the likes of Yahoo and Microsoft during its early stages, but where is Google now? Well, Google has consistently been able to capture 60% of the global search market. In the U.S. alone, Google has 67% of the search market. It'll be an uphill task for Facebook to claim the top spot that it's looking for. It'll be an equally tough task for Facebook to convince advertisers who use Google Ads to make a switch.
ComScore reports that Yahoo!'s overall search market share seems to have dipped from 12.1% to 11.6% a month back. Microsoft now holds the second spot with an overall 16.6% search market share. The good news for Yahoo is that 88% of Microsoft search generated revenue goes to Yahoo because Microsoft's Bing runs on Yahoo!'s search properties, the bad news is that this agreement ends after this month. Facebook's outside search is powered by Bing, which ties all three companies together.
With a strong audience of over 1 billion monthly users, Facebook has more user data than any other company. It's also partnered with Microsoft to ensure that users do not have to leave Facebook for search information. Despite all of this, Google dominates the search market with whopping stats, but with the launch of Graph Search Google could start losing ground. Facebook's biggest advantage is in mobile internet usage. 680 million users are logged on to Facebook every day. Google search dominance in the mobile market isn't as much as its dominance in desktops. Why? Well, users prefer opting for custom apps to get information. Graph Search, the scope of ad revenue for Facebook would be more if they could implement the Graph Search feature on mobile devices as well.
With 1 billion daily users and the introduction of Graph search, Facebook is no longer dependent on website advertisements. It could make a lot of money through search ads as well. Facebook as of now looks very promising.