As 2012 begins there is much anticipation about the Facebook IPO (initial public offering) that is scheduled to take place this year. Some estimates value the company as high as $80 billion. One good thing with the coming IPO is that veil of secrecy around the rumored “Facebook Search Engine” will finally come off. Here are 7 reasons why you can expect a Facebook search engine within the next 12 months…finally.
1. Everyone Wants It - If we take a look at the most searched for phrases with the term “search” in them that have growing interest with low a results, you will see “search engines to find people” as one of the fastest growing conversations online without any product or solution to that query. The Internet Time Machine project finds growing trends and niches with high demand and low supply. Since Facebook has over 700 million people on its service, this is the most logical place to start an engine to find people.
Now take a look at Google search volume for the terms “facebook search”. Google volume acts as very nice metaphor for “demand” in our supply and demand equation. So, just on the demand side, look at the volume of people looking for a Facebook specific engine.
2. The Facebook IPO - When Facebook finally goes public, there will be tremendous pressure on them show growth. Not only to show growth of subscribers and users, but to show growth in how Facebook makes money, which is advertising. I would estimate a Facebook based search engine that allows you to stay within the iFrame of Facebook while seeing results (i.e. You never leave the Facebook URL) would generate over a billion new pages views per day for Facebook. These page views could host very targeted ads based on Bing’s search algorithm blended with social factors like “shares”, “likes”, and “comments”. Once a company goes public, the need to show growth is intense, as most of the stock price will be priced at “future earnings”, not current numbers. In order to have your stock price go up, you need to constantly higher earnings and projections.
3. The Bing Partnership – Facebook and Bing have already partnered up to improve and experiment with Bing’s results. The two companies have been working together for over two years now to see how social media integration into search results could improve a users experience and overall happiness with their results query. Facebook has down played this testing so far and said they have not seen major changes to search results based on integration with social media signals like a “like” or “share”. I think this is just a smoke screen and Facebook is very anxious, and just waiting for after the lockup period of the IPO to release its own engine. After and IPO, there is a period of time that owners of shares can’t sell them. This period can be anywhere from 30 days to as much as 180. Once a company goes public with massive fanfare, it needs a big boost or announcement once the lockup period is over because millions of shares will be sold by early investors, employees, and others, hence driving the stock price down. This is when Facebook will need a game changing announcement to get their shares to continue higher.
4. It Would Kill Google – It is no secret that there is no love lost between Google and Facebook. Facebook has the potential to literally devastate Google in one day. Can you image what happens to Google’s stock price if the lost even 1% of overall search volume in one day, let alone the damage Facebook/Bing could do if people love the new Facebook search engine? You could easily see Google’s total search volume drop by 10% in a month and stock price crater. This is by far the #1 fear of Google and the only threat they have to their search dominance. If it wasn’t for the Android operating system, Google could be as vulnerable as, say game maker Zynga, to the whims of Facebook.
Splinter search engines that go after specific niches are already eating into Google’s dominance. Examples like Wolfram Alpha, a search engine for mathematics, and NowRelevant.com, a search engine for information about your subject for the past two weeks only, are prime examples of niche engines that have found footing on the Internet. To say Facebook wants no part of this market or eating away at Google’s margins is ridiculous.
5. Facebook Won’t Talk About It – This is great sign that there is something big going on. The fact that Facebook doesn’t talk about it and even throws out a few stories about how they really aren’t interested in search and how the Bing results were not a story, tells me where there is denial, there is fire. That would be like Facebook saying they aren’t interested in creating a billion new page views per day for advertisers campaigns. Or that, even though they are now a public company and need to increase revenue and earnings, they aren’t interested in having ultra target ad pages that cost advertisers big bucks on their network. Or better yet, they are fine that people stay on Facebook to do everything except search, and the fact they go to Google to do that is okay with them.
None of those reasons make any sense and the fact that Facebook will face so much more scrutiny over their numbers and growth, almost guarantees a new Facebook based search engine this year.
6. They Already Have The Spot Ready- If you check your Facebook page, you will see a search box already there. The results have been limited to fan pages and friends until this point, but the fact that it is already integrated into the standard Facebook platform means there will be minimal user complaints on a user interface change.
7. Google Is Rushing To Beat Them To It! Starting In January of 2012, Google + members will be able to search Google on a broad base or against their own social network recommendations. Basically, Google had the search engine but not the social network, so they had to build one. Facebook has the social network and not the search engine, hence they teamed up with Bing. Now Google, with its search engine and Google+ network is incorporating the “+1″ likes into their results, and given users the change to change their results based on recommendations from their social network. This will have dramatic effects on areas like internet marketing and search based advertising.