The 9 Things We Learned from Facebook’s ‘Graph Search’ Press Conference

There was a big press conference held by Facebook
(FB) on Tuesday at which they announced “Graph
Search.t’s important.
It was Facebook’s baby step towards getting a big
piece of Google’s (GOOG) lucrative search ad
revenue stream, as well as future search revenue
that doesn’t even exist today.
Confused? Read on. These are the 9 things we
learned from today’s press conference.
1. Lots of people like to hate Facebook and
yet it is still a big and important part of our
tech lives today. If you follow any Facebook
press event on Twitter (irony alert), you’ll notice
quickly that almost everyone loves to be snarky
towards Facebook. I’ve done it lots myself. Yet,
Facebook still has a billion users. Once you cross a
critical threshold in terms of users, it really doesn’t
matter how much snark exists out there. You
matter. Your actions matter. Tuesday was a
reminder that snark doesn’t matter.
2. The fact that people were so disappointed
that Facebook didn’t show off a phone
indicates how much value would be created in
the company if they did launch a phone. The
biggest apparent disappointment of Tuesday’s
announcement was that it wasn’t a Facebook
Phone. The fact that there was such
disappointment makes clear how big a deal it
would be if Facebook in fact had a phone.
Therefore, ignore Mark Zuckerberg’s prior claims
that Facebook would never do that. Facebook can
and will. When they do, it will be a big deal.
3. They just took baby steps to have their
own version of search that will be very
valuable. This is probably the biggest takeaway
from today, which is why I put it up top in the intro
to this. Again, people were disappointed they didn’t
release a full-blown search engine. Guess what?
That’s impossible to do from a standing start. So,
they’re taking the first steps towards search in a
way that plays to their strengths. The real question
is where will this path take them over the next two
years? My best guess? Towards a lot of money.
4. In the mobile world we now live in, a big
part of search is what’s around you (local)
and who’s around you (social). Facebook can
play in both of those spaces. Facebook can’t do
knowledge graph search. But they can tell you stuff
about your friends. And now that they’ve launched
a good mobile app with “Nearby” capabilities, they
can tell you about what your friends are doing in
real-time, as well as indexed by their interests.
This isn’t knowledge of everything about the world.
But it turns out this info is highly relevant to our
mobile world today.
5. Classical search – as practiced by Google –
is hard. Tuesday’s press conference shows that
Facebook couldn’t even come close to launching a
comparable product to Google search right out of
the gate and therefore had to settle for this baby
step. It’s smart not to go toe-to-toe with Google
when Facebook will fail. So they’re taking an
incremental approach which plays to their
6. Foursquare and Yelp (YELP) just got more
valuable. I know Yelp’s stock crashed during and
after the Facebook presentation. However,
Facebook’s move to tell you a lot more about the
world around you and what your friends like doing
in it is a big validation of both Foursquare and Yelp.
Those companies are more valuable now than they
were this morning because there is a scarcity of
companies that know what they know. It seems
like Foursquare is on the verge of a partnership with
Apple (AAPL). Yelp already has one. Either could be
bought by Google, Facebook, Apple, or others.
Eventually – and maybe by year end – both might
be bought.
7. Facebook has a big market cap and can
buy a lot of small interesting companies for
$1 billion each (a la Instagram) or for a lot
less. Right now, Facebook is worth about 3x what
Yahoo (YHOO) is worth. They can do a lot of buying
of interesting companies with that money. A big
part of today’s news dates back to Gowalla’s
acquisition by Facebook over a year ago. It didn’t
cost a lot but, that company’s location info became
worth a lot as part of Facebook. Facebook used its
currency to buy Instagram but they can keep going
and make more interesting acquisitions that will
boost its shares more than what they have to pay
for them.
8. Bing isn’t totally dead. The Microsoft (MSFT) –
Facebook partnership continues. Now, Bing is
featured heavily as part of Facebook. That’s great
for Microsoft. They’re not dead yet in search. Does
it mean we will see Google share drop significantly
in the next few quarters? No. But it’s still a great
move by Microsoft (and smart for Facebook).
9. My guess is that – two years from now –
Facebook will have a very beefed up version
of search tailored to its service, as well as its
own phone.Watch.


9 thoughts on “The 9 Things We Learned from Facebook’s ‘Graph Search’ Press Conference

  1. Oh my goodness! Impressive article dude! Thank you so much, However I am encountering troubles with your RSS. I don’t understand the reason why I cannot subscribe to it. Is there anybody else getting the same RSS issues? Anyone who knows the answer will you kindly respond? Thanx!!

  2. I’m amazed, I must say. Seldom do I encounter a blog that’s equally educative and engaging, and let me tell you, you have hit the nail on the head. The issue is something which not enough folks are speaking intelligently about. Now i’m very happy I stumbled across this during my hunt for something regarding this.

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