Facebook challenges Google in search

Facebook (FB) just made the search engine market much more interesting with Wednesday's unveiling of its Graph Search offering.

The feature, which starts beta testing this week, enables users to do extremely targeted searches such as "restaurants my friends like" or "people who like the movies I like," "people who worked at Google and Facebook "or "books read by CEOs."  

If Facebook can pull this off, the implications are huge for a host of companies ranging from Google (GOOG) to Yelp (YELP) and LinkedIn (LNKD) who rely on search. That's still an "if." Facebook didn't provide any information when the service will make money, which concerned investors who pushed down the shares Wednesday. A company spokesperson couldn't immediately be reached.

Facebook's offering underscores the growth in the volume of data about consumer behavior that is stored on the social network and other sites, which worries privacy advocates and some government officials.

"Not just bigger data, but better data," says Kip Cassino, a vice president with Borrell Associates, in an interview, who predicted that this trend will "revolutionize how folks market on the Web."

For advertisers, targeting isn't everything, it's the only thing. Marketers like to direct the marketing messages to as specific of a group as possible because it's a more cost effective way to generate sales than traditional advertisements that are seen by loads of people who have no interest in the product. People are also more apt to follow the recommendations of friends.

Experts who have seen Graph Search say they are impressed.

"It remains very early days, but I already find it fascinating the types of searches this is allowing me to do, searches I hadn't contemplated before," writes Danny Sullivan, the founding editor of the respected Search Engine Land site, in a post. "Facebook is a great repository of data, and it finally has a search catching up to all it knows."

Whether it will live up to its potential remains to be seen.

--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

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