Facebook is planning to take on the mighty Google in online search, in response to Google+ challenging Facebook in the social networking arena.
The world's largest social network is running neck and neck with Google in attracting online shoppers, the key to generating online advertising. But advertisers value search users more highly than social networkers.
According to the international research firm Forrester, retailers rank Facebook below paid search, email and affiliate marketing. The majority of retailers polled by Forrester feel that, while Facebook delivers better on brand building and listening to customers, it excels neither at acquiring new customers nor at retaining existing ones.
"It would be more surprising if Facebook did not try and take a share of Google's search market," says Adrian Drury, a principal analyst at the research company Ovum. "Just as Google is pushing itself into the social space to increase relevance of targeted ads and its share of Web 'dwell time', so Facebook competitively must move itself into an adjacent market to expand its share of Web audiences and ad spend."
But Facebook has a high mountain to climb before it can begin to rival Google in internet search. Even were it to develop sufficiently powerful mathematical algorithms and a wide enough database to challenge Google's search engine, it would still have to beat the Google brand.
"Getting users to change their usage habits would be tough … The term, 'to Google something' has entered the consciousness of a generation of internet users and it will take a truly strong and value led competitive proposition to dislodge it in any meaningful way," says Tim Shepherd, an analyst at the research company Canalys.
To take on Google with any real chance of success, Facebook will have to provide a search engine that goes one better than Google, offering internet surfers something new.
"A Facebook search engine would be unlikely to work solely in a conventional way," says Mr Shepherd. "To succeed in capturing any real share from Google and to prove differentiated utility, Facebook would need to leverage its unquestionable strength in 'social', helping users answer 'who' questions in addition to Google's 'what' questions."
Forrester reports that 43 per cent of the world's internet traffic visits Facebook daily and that 47 per cent does the same on Google. But the two companies are far from neck and neck in the minds of advertisers and marketeers. The big difference between them is that users regard Google as the gateway to any number of other websites, where Facebook users stay on the site.
This makes Facebook far less attractive to retailers and marketing firms.
There is a big question mark over whether Facebook will be able to leverage its social networking appeal to tempt users to venture outside its website."Can it drive a behaviour where a meaningful number of users are looking for socially relevant search results beyond content on Facebook via the Facebook search bar? That's the execution challenge," says Mr Drury.
Should Facebook succeed only in creating a search engine that is technically excellent but that poses no real long-term threat to Google, it could be playing into Google's hand. A challenge from Facebook would be useful for Google as it is facing mounting pressure from antitrust authorities for controlling more than 60 per cent of the search market.
Facebook's reported plans for a new search engine are seen by many as a response to last year's launch of Google+, the search engine's own social networking site.
"Google is throwing enough resources at Google+ to ensure it will take a share, but the question is whether this share will be sufficient to represent critical mass," says Mr Drury.
"Neither party is likely to completely dominate the other in their respective markets."
