Commentary

Does Facebook Need To Build A Search Engine?

by Laurie Sullivan , Staff Writer, January 4, 2011

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Does Facebook need to build a search engine? The social network has become an important traffic source not only to company Web sites, but search engines like Google and Bing. So important that Goldman Sachs and other investors infused the company with $500 million, according to reports. Maybe the industry needs to widen the definition of the phrase "search engine."

Taking a look at the possibilities, we dip once again into J.P. Morgan's report Nothing But Net: 2010 Internet Sector Outlook. With so many interesting insights I couldn't help do it again. So, here we go:

Google currently generates about 36% of all online ad revenue by being at the center of the ecosystem, according to J.P. Morgan, but Facebook proves to also do its share. Citing comScore, the report notes Facebook traffic to the New York Times rose 66% in October 2010, up from a year-ago month, while traffic from Google fell 2% during the same time period. Traffic from Facebook to Amazon sites rose 328%, compared with traffic from Google fell 2%, and traffic to eBay from Facebook rose 81%, while traffic from Google fell 3%.

Facebook became the top referral Web site for NHL.com late last year. The National Hockey League's official web site has seen an 80% increase in referral traffic from Facebook, as members read and share articles, scores and videos. "Facebook users scored higher in average visits (7 to 3), video starts (12.1 to 5.8), articles read (4.8 to 1.5) and total minutes per visit (41.4 to 12.5)," according to the Sports Business Journal.

During a presentation at the Search Insider Summit last month in Park City, Utah, Wedbush Equity Analyst Lou Kerner called Facebook "the second Internet," with time spent on Facebook and page views surpassing Google search. It's pretty clear from the numbers provided by the NHL and J.P. Morgan this trend has no intension of slowing.

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I agree with Kerner's view that social signals will become more important to search, especially as time spent on Facebook continues to drive more searches. Building engines like Google or Bing takes more than desire and cash. It would be pointless and a waste of time for Faccebook to develop its own search engine. The company has discovered a way to drive ad revenue without creating its own search engine.

Numerous studies indicate Facebook has become the first destination in the morning for many members. They check the status of friends and tend to their gardens in games such as FarmVille, logging in to check the status of farm animals or livestock. Even prison inmates use smuggled phones to play the game. When all is said and done, global digital gaming market should hit $20 billion in 2010, up from just under $16 billion in 2009, according to the J.P. Morgan, which cites Electronic Arts stats.

Don't think it stops at social games. The Home Buying Institute launched a survey Monday to find out who uses Facebook when buying a home.

In an unrelated story that I just couldn't let pass you by: Facebook founder meets with Baidu during China holiday. And don't forget that Bing provides Web search for Facebook. That should give you enough to think about for the rest of the day.

How would you redefine the term "search engine" and do you think Facebook has found the formula to do without?

bing, china, facebook, google, microsoft, search, social media

4 comments about "Does Facebook Need To Build A Search Engine? ".

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Erin Leach-Kemon, January 4, 2011 at 2:21 p.m.
Hi Laurie,
Your article surfaces a lot of interesting points and intriguing questions about the future of search and social. I agree with both you and Kerner that search engines will increasingly focus on social signals.
While many people proposed that the convergence of search and social would consist of search moving into social networks, like Facebook, we're actually seeing the opposite. Social is moving into search engine result pages.
Just as you stated in your post, users are spending more time and generating more page views on Facebook than Google. I believe Google and Bing are looking to win back some of this user engagement by making SERPs more social and actionable. By allowing users to interact directly with their social networks from search engines, such as seeing which of their Facebook friends "Like" an article directly from Bing's result page, search engines are hoping to encourage users to spend some of those 'Facebooking' hours on SERPs.
To read more about this topic, check out our blog post "Search Might Not Be Moving Into Social, But Social's Moving Into SERPs" (http://www.optify.net/social-media/social-moving-into-serps/).
Thanks,
Erin Leach-Kemon
Optify
Reply

Jon-Mikel Bailey from Wood Street, Inc., January 4, 2011 at 3 p.m.

All proving that the end goal is still to drive traffic to your website. Notice how we no longer talk about abandoning your website for a Facebook page anymore? If people are still talking about that they may want to read Facebook's privacy policy and terms of use again. Facebook is social, its marketing, its engagement, but at the end of the day, it ain't yours.

Chris Nielsen from Domain Incubation, January 4, 2011 at 4:06 p.m.

Google is compass, Facebook is a destination. Why people want to talk about the two together is beyond me.

I just saw on TV yesterday that they say FB is worth $50 Billion. Maybe, but I don't think that number would stand if we saw how much has been spent on the site today and if the earnings were disclosed.

MySpace was too open, and Facebook is too closed. The next one that comes along should be juusstt right! It may even last longer than both combined as the top dog in the category. :-)

Fionn Hyndman, January 4, 2011 at 8:55 p.m.

There is so much comparison going on between Facebook and Google at the moment and so much of it misses the point.

Yes, FB provides a huge amount of traffic to many, many online sites, publishers and e-commerce sites, the main question though is how much of that is from friend referrals and how much is from ads.

I'd wager that for the majority of publishers and people receiving the traffic the majority of the traffic would be coming from friend feeds/referrals. The question should be how could FB monetise this? And realistically they couldn't.

If they charged the publisher and the publisher wouldn't pay then they would have to interfere with a members newsfeed, not something Zuckerberg is likely to entertain. If they tried for a rev share or some other form then surely it should be the user who benefits from sending their friends to an online store and not FB. It's fraught with issues that could be game changers for FB.

I think the stats need to reflect a fundamental difference. Google is finding something for a consumer who is using Google to search for an answer. In the main, Facebook is a platform where I can tell my friends what I like as they might like it to. Commercially they have a very different worth and we should probably stop comparing them.

Thanks