Are Facebook and Google on a collision course? Facebook’s Graph Search announced Tuesday puts them squarely in Google’s space, as the 2 companies vie to become the primary gateway to the Internet. As noted in today’s Heard On The Street column in the WSJ, Google has long served as a destination to find websites and information; Facebook, to share gossip and photos with friends. But those distinctions are increasingly blurring, and billions in advertising dollars are at stake.
With Graph Search, Facebook unveiled a search tool that will enable members to conduct complex queries related to their friends’ profiles. For example, members could search for sites visited by their friends during European vacations. In essence, Facebook is looking to mine a massive database derived from their billion-plus members in an effort to convince members to use the service for search.
Here’s what you need to know, per the Journal’s piece:
- What’s at stake? Google generates the majority of its $40 billion in annual revenue world-wide from selling ads on its search engine. In the U.S., Google was projected to make more than $13 billion in search-ad revenue, or 75% of the entire market, in 2012, according to research firm eMarketer Inc.
- Google’s repository of information remains unmatched. It said it has indexed 30 trillion unique Web pages across 230 million sites. Last year, Google changed its search engine to make it easier for people to quickly get detailed information about people, places and real-world things by displaying photos, facts and other “direct answers” to search queries at the top of the search-results page, rather than just links.
- Having witnessed Facebook’s rise and anticipating its move into search, Google built its own social-networking service, Google+, in 2011 to obtain data about specific individuals by name, their personal interests and the identities of their friends. It then integrated Google+ with its Web-search service, so that people searching for a particular website, local restaurant or real-world product will be alerted if any of their Google+ contacts previously rated it positively or negatively.
- But Facebook has a far larger social network and a sizable head-start after spending years encouraging its members to add photos and all sorts of personal information to their profiles, from basic data like location, employer name and interests to more sensitive details such as age, religion and romantic status.
Much of that data is now searchable using Facebook’s new “Graph Search” feature after more than a year in development. Facebook began rolling it out Tuesday as a test to a limited number of users. For Web searches that Facebook can’t deliver, the queries are served by Bing, the search engine from Facebook partner Microsoft Corp.
Let’s look at Facebook and Google from a technical perspective:
Facebook (FB) – Daily Chart
As seen in the chart below FB appears to have bottomed and recently broke out of a base and above resistance in the $ 27-$28 range (red shaded band) after scoring an early IQ trading BUY near $ 22.50 (green arrow) then a IQ Trading Neutral near $27.00 (orange arrow) then back to a new IQ trading BUY near $ 28.50 (second green arrow). Shares subsequently rose to $ 32.00 and are now pulling back towards $ 29.00, which should act as support (red shaded band in chart below). Shares look like they will try to rally to their next upside resistance area near $ 34.00 (black line). So generally speaking FB shares are looking up.
Google Inc. (GOOG) – Daily Chart
As seen in the chart below GOOG shares are stalling near resistance (red shaded band and arrows) and are now testing the lower end of its up channel (green lines). While this picture can change, generally speaking GOOG shares are on the defensive at the moment.
To read the entire WSJ piece, please click the following: