With Graph Search, Can Facebook Kill LinkedIn, Yelp–Even Google?

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Facebook CEO Mark Zuckerberg introduces Graph Search (Photo: Robert Hof)

From my Forbes.com blog The New Persuaders:

Facebook took pains today to tell the world that its new social search serviceGraph Search, is only a very limited tool that it will roll out very slowly over a period of months and years.

But CEO Mark Zuckerberg and his search staff couldn’t help but reveal their enthusiasm for the vast possibilities. For all their professed modesty, what struck me at the company’s press event introducing the service was how specific and broad-ranging Zuckerberg and his Graph Search leaders were about what it could provide: just about everything, potentially, that every company from LinkedIn to Yelp to Foursquare to Match.com to … yes, even Google provides today.

That’s an exaggeration, of course, that even Facebook folks surely didn’t intend. All of those companies have distinct, well-developed services with extensive user bases that are unlikely to shrivel up no matter how good Graph Search turns out to be. In most cases, they will probably retain a durable advantage for years to come. And as Zuckerberg said, it’s very, very early for Facebook search, and search is a devilishly complex discipline to do well.

Still, to hear it from Facebook itself, Graph Search will offers ways to provide similar services, sometimes in potentially easier and more effective ways:

* Recruiting: One of the first examples Facebook provided today was that Graph Search could help in finding qualified candidates for jobs. For instance, Lars Rasmussen, the Facebook director of engineering who heads the Graph Search team, mentioned that he could find people from NASA Ames Research Center who are friends of Facebook employees.

As investors, who bid up LinkedIn’s share a fraction today, no doubt recognize, that company has a pretty good if not exclusive hold on recruiters. And given that finding friends who worked somewhere is a rather specific subset of qualified candidates for a position, there’s not much chance recruiters will abandon LinkedIn for Facebook anytime soon. But Facebook, already used in various ways by recruiters, could siphon off activities that might otherwise have gone to LinkedIn. … Read more at The New Persuaders. But to conclude …

So, to answer the question in the headline: No, Facebook won’t kill any of these companies, certainly not anytime soon. They’re too strong, Facebook has too much still to build and then to prove, and rarely does a company kill another healthy company no matter how good its products are.

Investors may be thinking as much, as they sold Facebook shares to the tune of a 2.7% drop in price today. But if anyone doubted Facebook’s ability to keep disrupting the status quo, they surely shouldn’t doubt it anymore. Even with its baby steps into the search business, Facebook has again set new terms of engagement in the battle for the soul, or at least the cash register, of the Internet.

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LIVE: Facebook Unveils Graph Search–Its Long-Awaited Internal Search Engine

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Facebook CEO Mark Zuckerberg at the introduction of Graph Search (Photo: Robert Hof)

Ever since Facebook invited piles of press people to an event this morning to “come see what we are building,” speculation about what it will reveal has reached a fever pitch.

Update: It’s all about search! See below for details. But for what it’s worth, investors are not impressed. Facebook shares are down 2% in midday trading. No doubt that’s a short-sighted view–this socially infused search service is a big deal, if only to show how Facebook will keep engaging people more and more deeply, not to mention provide a foundation for the kind of search ads that made Google king of the Web–but that’s the market for you.

There must be a couple hundred press here, plus a crowd of Facebook employees standing in the back of the room–a sure indication that Facebook considers this a big deal.

And now we are underway, with CEO Mark Zuckerberg introducing us once again to Facebook’s mission and the social graph. First he goes into Facebook’s early history, before the news feed that now dominates the service.

Now he’s introducing the third pillar of Facebook’s service beyond the news feed and Timeline. What’s most interesting is graph search.

So what is graph search? It’s not Web search. We’re not indexing the Web. We’re indexing our map of the graph. There are more than a trillion connections in this graph, with billions more added every day–likes, comments, photos, etc. Indexing this is a really hard problem and we’ve been working on it a long time.

Graph Search is privacy-aware, he says. Every piece of content has its own audience, and most is not public. You can only search for content that has been shared with you–a very tough problem to solve.

Let’s say you do a Web search for hip hop. You get links. Graph Search is different–it’s intended to provide answers: Which of my friends are in San Francisco?

One of the big design problems we had to solve was how to make this natural. We’ve come up with an interface we think works. The answer is filters–not! That’s a joke–he shows a screen full of filters that look ridiculous, of course, because they can’t scale up.

He shows a video of queries that show how they come up with answers as you type in words.

For this first beta version, he says, Facebook focused on four use cases: people, photos, interests, and places. There’s a lot more, but these are especially useful. …

Read about the rest of the event at The New Persuaders.

Will Google Dodge An FTC Antitrust Bullet?

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From my Forbes.com blog The New Persuaders:

The Federal Trade Commission‘s antitrust investigation of Google is about to come to a head, by most accounts. But it’s a complex case touching on several aspects of antitrust law and whether Google’s search and other activities violate any of them, and the implications for Google, its investors, and Internet users could be huge.

Two attorneys intimately aware of the case provided contrasting views at a webinar this morning conducted by the investment firm International Strategy & Investment and its senior managing director Bill WhymanGary Reback is an antitrust lawyer most famous for representing Netscape in its antitrust case against Microsoft in the 1990s. He now represents several vertical-search companies, such as NexTag, that have complained about Google practices. Geoffrey Manne is a lecturer in law at Lewis & Clark Law School and executive director of the International Center for Law & Economics,which receives financial support from Google and other companies. He has written extensively about his belief that there is no strong antitrust case against Google.

The main takeaway: Despite a Bloomberg story last week that said the FTC was wavering and unlikely to attack Google’s core search business–and another today that repeats that assertion–there’s no agreement by the two sides on what the FTC will end up doing. Reback seemed to acknowledge that Google might find a way to maneuver politically around the FTC to avoid a full-scale assault on the way it conducts its search business. But he also noted that the European Union is closely watching the outcome and may act on its own if the FTC does nothing more than a settlement on the more minor issues.

One key point on timing: Press reports say there’s a Dec. 3 meeting between FTC Chairman Jon Leibowitz & EU Competition Commissioner Joaquin Almunia. What’s more, Leibowitz is expected to leave for private practice around the end of the year, so that could affect the case one way or another. And if it means anything, Bloomberg says Google CEO Larry Page met with the FTC today. …

Read the complete post at The New Persuaders.

Google CEO Larry Page Speaks! Big Reveal: $8 Billion In Mobile Revenues

From my Forbes.com blog The New Persuaders:

Investors have had a chance to digest Google’s third-quarter earnings longer than they expected, but they still have indigestion over the disappointing results. Can CEO Larry Page (yes, he will speak!) and his executives provide a Maalox moment on their earnings analyst call?

We’ll find out shortly, starting at 1:30 p.m. Pacific. You can watch it here as well. Keep refreshing for updates through about 2:30 p.m.

Update: It looks like Motorola was the chief culprit. Yes, less lucrative mobile ads seem to be a factor, but not one Google seems overly concerned about–it’s at least the third time I’ve heard executives say that mobile eventually could be better than desktop ads. Indeed, I was struck by the mention that one reason for the rise in costs that led to lower profits was sales of the probably near-zero-margin Nexus 7 tablet–which was striking for a single, non-advertising product. For better or worse, Google’s betting big on mobile, from ads to devices, and expects whatever shakes out to be positive. Investors clearly aren’t so sure.

And we’re underway. Page still has a strange froggy voice–seriously, really strange like he inhaled too much helium, so I can understand why he hasn’t spoken much in public. Anyway, he’s keeping his remarks short. You can read the prepared remarks on Google+. We had a strong quarter, he says, and I’m really happy with our business. Revenue was up 45% from a year ago.

Today, we leave in a world of abundance–abundant information and abundant computing. Many of us feel naked without our smartphone. Google is super-well-placed to take advantage of these opportunities. We’re seeing tremendous innovation in mobile advertising. Eventually, he adds, it will work even better than desktop ads.

We took a big bet on Android back in 2005. Most people thought we were nuts. Today, there are over half a billion Android devices, with 1.3 million more being activated every day. He suggests everyone go out and buy a Nexus 7 tablet.

Our run rate a year ago for mobile advertising was $2.5 billion. Along with apps and Google Play, it’s now over $8 billion. That’s quite a business, he says mildly–though based on the new way it’s calculated (see below), it may not be as amazing as it seems.

We had spread ourselves too thin. We sunsetted 17 more products last month. It’s more important than ever we converge our services.

We want to make advertising super-simple for our customers. Today, separate campaigns for desktop and mobile makes it more difficult and mobile opportunities often get missed. Advertisers should be free to think about their audience while we do the hard work optimizing across channels.

That’s the gist of his first widely public remarks (he spoke the other day at Google’s Zeitgeist event to the media elite).

Now CFO Patrick Pichette goes into some detail….

Read the complete post at The New Persuaders.

Advertising Experts: Ignore Google’s Earnings, It’s Doing Just Fine

From my Forbes.com blog The New Persuaders:

After reporting disappointing third-quarter earnings, and giving investors a few extra hours to sell their shares to boot, Google saw its shares hammered before trading was halted. But while Motorola Mobility, which Google acquired for $12.5 billion in May, clearly is a big drag on the company, ad folks say its core business is just fine.

Bryan Wiener, CEO of the digital marketing agency 360i, a specialist in search advertising in particular, says Google’s core business still appears healthy. The only hitch, he says, is that mobile ad prices per click are still 30% to 50% lower than desktop clicks, but he says that gap is narrowing as mobile cost-per-click continues to rise.

The main issue is not so much that advertisers view mobile ads as less effective. There are actually two other issues.

First, there’s still less competition for mobile ad space. And since Google ads are sold by auction, less competition means lower prices.

Why is competition less? That brings up the second issue: It’s not yet clear precisely what impact mobile ads have. They don’t work exactly the same as desktop ads, where people customarily conduct a search, click on an ad, and then a certain percentage buy the product. That’s easy to track.

On their mobile phones, however, people are more often searching for a store, rather than looking to complete a transaction online. They may well end up buying in that store–some companies are starting to provide ways to track that connection, and marketers anecdotally know it’s happening–but separate databases for online and store activity still means it’s tough to close the measurement loop.

Wiener thinks that will get solved eventually. Even in the short term, mobile search ads that are still Google’s bread and butter are better positioned to show their value than mobile display ads, which may appear in hard-to-track apps and still aren’t standardized enough for marketers to spend big bucks to reach broad scale. That means Google for now is likely to fare better in consumers’ rush to mobile than, say, Facebook and Yahoo. “Everybody is still bullish on mobile search,” says Wiener. “But it’s still very early in the game.”

Looking ahead to the fourth quarter and beyond, says Wiener, “our clients are cautiously optimistic” about search ads in particular despite the uncertainty of the economy and the election. …

Read the complete post at The New Persuaders.

Wait, So Apple’s Siri Won’t Kill Google Search After All?

From my Forbes.com blog The New Persuaders:

Just a few months ago, some folks were suggesting that Apple’s voice assistant Siri would kill Google’s search by offering a more natural way for people to find what they want online–without annoying ads, either.

Honestly, the notion sounded at best rather ahead of itself at the time. But now, it seems Google’s search service–specifically aided by its just-announced Google Now, the voice-enabled personal search assistant that’s part of the new version of the company’s Android mobile operating system–has actually turned the tables on Siri. According to several people who have pitted the two services against each other, Google search smokes Siri. …

Read the complete post at The New Persuaders.

LIVE Inside Google Search Event: Search by Image and Voice, and Faster Too

Google will shortly provide an “under the hood look at Google Search” for a group of reporters and bloggers in San Francisco. According to the invitation, Google Fellow Amit Singhal, who for a decade has headed the core search ranking team, and others will “share our vision and demo some of our newest technology and features.”

It’s uncertain what Google will talk about, but events like this often are a forum for introducing new features. The last time Google did a similar event, the company introduced Google Instant, which shows search results as you type–a very significant change in its iconic search engine. Given how much competition Google’s facing not only in search but from social services from Facebook to Quora, it seems likely the search giant will have some notable new features or services to talk about. I’ll be liveblogging the highlights (as will many others). You can also watch it here. And you can submit questions to insidesearch 2011@google.com.

UPDATE: Google announces three key new features:

1) Voice search on desktops and notebooks, not just mobile.

2) Search by image, not just words.

3) Instant Pages, which eliminates load times when clicking on pages in top search results.

Bottom line for us: Easier and faster search no matter where you are.

Bottom line for Google and its competitors: It has no intention of getting one-upped on mobile devices.

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Do@ Aims to Disrupt Mobile Search–Including Google

It’s ironic, or maybe apropos, that you can’t find anything about the new mobile search application Do@ by Googling it. Google doesn’t track the @ symbol at all. But the Israeli company (pronounced “do-at”), which launched its free iPhone app today at TechCrunch Disrupt in New York, is looking to do a number on Google. It aims to provide a new way to find stuff specifically when you’re on your phone and the iconic list of site links becomes cumbersome. Instead, a search using Do@ helps you zero in quickly what category of information you want and then sends you directly to the app that’s most likely to have just what you’re looking for.

Here’s how it works: Search for, say, “Bob Marley” using Do@, and you’re presented with a drop-down list with the query followed by categories designated with the @ sign, such as @music (where you’ll see results inside apps such as Pandora or iTunes or SoundCloud) or @movies (where the likes of Flixster or IMBD.com provide results).

These categories are relevant to the particular query, so a search on “sushi,” and you see “sushi @restaurants,” “sushi @food,” and so on. Then when you click on one of those, you’re whisked to an app or service such as Foodspotting or Flixster, which then shows its own mobile-optimized results for that query. You can swipe through multiple apps for a query to get more quickly to just what information you want.

You’re seeing only a selected subset of Web sites and services this way, of course, but for common queries made from a mobile phone, that may be better in most cases than a huge list of links. Do@ ranks the lists of apps and services itself at first, but you can choose your favorites or, if you’re signed into Facebook, get your friends’ amalgamated choices. Essentially, says cofounder Ami Ben David, publishers answer users’ queries themselves, using their own apps or services, their own brands, and their own business models.

The judges at the TechCrunch Disrupt startup competition who viewed the demo questioned how Do@ knows the results it’s presenting–that is, the results inside other apps and services–are actually relevant for users. “We try to stay away from making these decisions for users,” Ben David said. The judges, including Bing’s Barney Pell and Google’s Bradley Horowitz, weren’t really buying this, noting that Do@ needs to objectively determine whether its partner apps and services are actually delivering the goods.

When Ben David first demonstrated the service to me in early March, he said Do@, which has $8.6 million in venture funding including a recent $7 million round led by Draper Fisher Jurvetson, is “trying to be completely different.” That’s commendable, but it’s also the company’s key challenge. Google’s list of links may not be perfect for many mobile searches, but it’s still not bad, and Google’s Instant Search solves some of the hassle of doing multiple search queries on a phone keyboard. Persuading users to change their behavior, even for something that may work better in many cases, is a huge hurdle that virtually no Google rival has yet jumped.

And given that Do@ isn’t doing the heavy lifting to index the Web’s huge collection of sites, or vetting the actual search results its partners offer, its key offering amounts to a new user interface for mobile search. Which sounds like a set of features–albeit a very nicely designed set of features, one likely to be copied if it proves effective–more than a company.

Bing-Yahoo May Challenge Google. Just Not Yet.

Two days ahead of reporting its third-quarter earnings, Google continues to gain on the combined search engines of Yahoo and Microsoft’s Bing–at least in the amount advertisers are spending on search ads. That’s the conclusion of the latest surveys from two search marketing companies, Efficient Frontier and SearchIgnite.

According to Efficient Frontier, Google’s share of paid search spending rose to 77.9% in the third quarter, up from 75.8% in the second quarter. The reason, according to the company: Even though Bing has consistently provided a better return on spending than Google, the addition of Yahoo’s less effective search ads dragged the combined entity down.

Likewise, SearchIgnite said Google’s share of search spend rose to 80.2%, the highest since first-quarter 2009 and the highest since SearchIgnite began tracking spending in 2007. Even though Bing led the growth in spending among the major search engines, up 21% from a year ago, Yahoo fell 10%.

And things aren’t likely to change anytime soon, adds Efficient Frontier:

Google will likely see relatively significant gains in the fourth quarter as both seasonality and the Bing- Yahoo! integration skew spend in their favor.   The seasonal retail focus of Q4 typically favors Google in spend as they over-index in retail at over 80% share.  The changing efficiency of the Bing-Yahoo! integration will likely see some additional, although likely temporary, spend shift in Google’s favor.

Still, it’s hardly game over for Binghoo. SearchIgnite says click-throughs on the combined service have risen because Bing’s ad-serving formula is delivering better results, so advertisers are ready to spend relatively more–especially since they really want an alternative to challenge Google’s dominance.

What’s more, search advertising looks to be continuing its rebound (as does overall online advertising), the company says:

Paid search spend in Q3 increased 5.8% year-over-year compared with flat growth a year ago and exhibited positive momentum month-over-month, with July growing 4.9%, August 5.8% and September 6.7%. The growth throughout the quarter bodes well for a strong Q4.

Efficient Frontier saw a similar trend and also anticipates a strong fourth quarter:

In Q3 2010, the SEM sector extended its 2010 growth streak. Year on Year (YoY) spend was up 19% with a solid 6% sequential Quarter on Quarter (QoQ) growth. The important metrics of CPC, clicks, and impressions all rose indicating both strong advertiser and consumer demand. Overall return on investment (ROI) in search is up 8% YoY, a critical factor driving the rising CPCs and overall advertiser demand.

Efficient Frontier believes search will grow in the range of 15-20% in Q4. Efficient Frontier’s reason for Q4 search optimism is built on the following three reasons. First, retail has led the way for search in 2010 with consistent growth. Next, Q3’s 19% YoY growth in spend on more difficult comps and slight sequential rise is a positive signal. Finally, strengthening ROI numbers with increasing CPCs bode well for overall advertiser demand.

There’s one wild card this holiday season in online advertising: Facebook. Efficient Frontier anticipates that a lot of advertisers will up their test budgets for ads on Facebook.

Google’s Marissa Mayer Live at TechCrunch Disrupt

Marissa Mayer, Google’s vice-president of search products & user experience, is holding a fireside chat at the TechCrunch Disrupt conference this afternoon. One of the best-known faces of the search giant, she often provides clues to where the look and feel of Google’s signature service is heading. She’s talking with TechCrunch editor and newly minted millionaire Mike Arrington.

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