Does Facebook Have Google Shaking In Its Boots?
First, there was the News Feed: a seemingly ancient addition to Facebook (NASDAQ:FB) that streamlines the most important news directly to a user’s homepage. Then came Timeline, a tool that allows users, “to share whatever they want with whomever they want,” according to Mark Zuckerburg, Facebook’s CEO and founder. Now, Facebook has unveiled its most innovative tool since the “Like” button—Graph Search.
What’s more, Graph Search has Google (NASDAQ:GOOG) shaking in its boots.
What is Graph Search?
Graph Search’s initial function is to be more accommodating to users that want to, say, find all the photos they’ve “Liked” over their Facebook career, or want to see which of their friends live in a particular city and share similar interests. “Who lives in San Francisco and enjoys kite-flying,” would be an adequate request. Right now, finding the answers to this type of question requires sifting through pages of Facebook searches trying to match the right information. So Graph Search helps users connect to friends, but that is just its initial function.
New Kid on the Block
The more advanced search — the tool that helped drop both Google and Yelp’s (NYSE:YELP) stocks Tuesday afternoon — allows users to essentially do a web search through Facebook with such nuanced requests as, “Find me a Chinese restaurant that my friends love,” or “Who is a popular dentist among my friends?”
An advanced algorithm that uses input from five-star scale ratings, in addition to the number of friend “Check Ins” and “Likes,” produces more personalized results than a typical Google search, Facebook believes.
“In web search, it’s very often the case that if you do a search for Apple and I do a search for Apple, we’re basically going to get the same results,” says, Kari Lee, an Engineering Manager at Facebook. “Whereas on Facebook when you do the same searches, we get completely different sets of results because of the depth of personalization that we do.”
CHEAT SHEET Analysis: Is Graph Search a Catalyst for Facebook’s Stock?
One of the core components of our CHEAT SHEET Investing Framework focuses on catalysts for a company’s stock and Graph Search has already proven to be just that.
Says Zuckerburg, “We just view this as a project that we’re going to be working on for years and years to come. But, as it gets more complete, it’s just going to be this amazing resource for a lot of people around the world to use.”
It is logical to think that the more feedback Graph Search gets, the more accurate its search results will be. If there ever comes a tipping point where the average consumer “Facebooks” the best golf course in town rather than Googling it, the ceiling will be sky high for this stock.
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