• by Mark Walsh  @markfwal, January 15, 2013

Facebook on Tuesday unveiled a revamped internal search system that makes it easier for users to get information among the vast array of status updates, pictures, “Likes” and other content posted to the social network.

Launched at a widely anticipated press event at Facebook’s Menlo Park, Calif. headquarters, the new service calledGraph Search was presented by CEO Mark Zuckerberg as an alternative to the type of Web-based search tied to keywords and popularized by Google and other search engines.

Instead, it is geared to answer specific questions and phrases in regular English related to a user’s social graph, such as “my friends in New York who like Jay-Z,” or “people from my hometown who like hiking.” The results are ranked based on people someone is closest with on Facebook based on their level of interaction.

The beta version of Graph Search focuses on four main areas: people, photos, places and interests. That means people can look up things such as “photos I like, ”restaurants in San Francisco,” or even “movies liked by people who are film directors.” Zuckerberg gave the example of searching for “local friends who like ‘Game of Thrones.’”

Graph Search appears as a bigger search bar at the top of each page and shows suggestions in a drop-down results page as a user starts to type. A toolbar on the right allows someone to refine a search by criteria including relationship, employer, school, and Likes. It rolls out to hundreds of thousands of users now on the desktop in the U.S (in English) to start.

To date, Facebook’s search offering has largely been haphazard, with results ranked based on popularity for things like pages and apps, as well as the volume of connections for people. Last year it launched a Nearby tab in mobile to help people find local businesses. And since last summer it has allowed businesses to pay for sponsored search results.

But the process of indexing of Facebook’s billion users, 240 billion photos and trillion connections involved in launching Graph Search has led to a smarter, if still internal search engine. For now, Zuckerberg said that the company isn’t focusing on monetizing the new search offering as it continues building out the service.

But it’s clear that businesses and brands on Facebook may already be able to benefit from an improved search tool by making it easier for users to find them. Search results are based on factors including the information businesses share as well as the connections of the person searching. And results can include Facebook brand pages, apps, and places.

Facebook said Pages and apps can still use Sponsored Results, which will appear at or near the top of search results, whether or not people have Graph Search yet.

Agency executives said Facebook’s overhauled search system could eventually make it more of a competitor to Google, but cited the limitation of staying within the social network. “Theoretically, some advertising budgets currently dedicated to Google AdWords would shift to advertising via Facebook Graph Search," noted Hussein Fazal, CEO of AdParlor, a Facebook strategic marketing development partner.

Jason Hartley, associate media director at 360i, agreed, but wondered whether people will really shift much of their search activity to Facebook now. “The question remains, is the social graph really going to be more useful than the search results I get from Google and Bing, that represent a much larger set of opinions about a wider set of options and are the result of a much more mature algorithm?” he said.

Through its partnership with Bing last year, Facebook may make query suggestions in its search bar that can trigger Web searches that will display Bing results and Bing ads. That won’t change with Graph Search.

Another question is about privacy in relation to the new search product. Zuckerberg emphasized Tuesday that Graph Search would allow users to sort only through content already shared with them. It makes finding new things much easier, but you can only see what you could already view elsewhere on Facebook," stated the Facebook press release.

The company also suggested people review who can see information about them in their privacy settings, given fresh concerns about what shows in search. But given Facebook’s checkered history in safeguarding users’ privacy on the site, those worries are likely to increase when Facebook begins to ramp up search advertising.

After a run-up in its stock price leading up to today’s announcement, Facebook shares fell slightly to $30.10 Tuesday. The company’s shares cracked $30 last week for the first time on optimism about the new product release and expectations for strong fourth-quarter financial results.

Local review and recommendations site Yelp saw its stock price fall 6% to $20.61 in the wake of Facebook’s new search tool.