Inside Facebook

Mission statements, simple as they are, sum up the fundamental differences between Facebook and two of its main competitors, Google and Twitter. Google looks “to organize the world’s information and make it universally accessible and useful.” Twitter wants people to “share and discover what’s happening right now, anywhere in the world.” Facebook, for its part, “helps you connect and share with the people in your life.”

Right now, none of these goals is particularly less important than the other. They all matter to the future of the web. But as Facebook seeks to outperform its rivals in the quest for advertising dollars, it needs better search. And with the new real-time search engine Facebook launched this week, that’s exactly what users got.

However, despite the big improvements that were released this week, Facebook still faces tremendous challenges as it seeks to make a dent in the search market. While Google’s search isn’t particularly social, it still dominates overall query volume and continues to print money for the Internet giant. Advertisers across a variety of categories generally see a solid ROI, and Google continues to invest heavily in search innovation, making it a relentless competitor. Microsoft, a Facebook investor who also has a bundling deal with Facebook to include Bing web results on Facebook search results Pages, is also investing heavily in research and recently struck a deal to take over Yahoo’s search infrastructure.

Twitter’s search tool has matured greatly, too. After Twitter’s acquistion (and integration) of Summize last year, users have learned to search the real-time stream in new ways. For example, people can search using hashtags, a symbol (#) Twitter users employ to categorize topics. They can also search for posts on products, and discover “negative” or “positive” tweets about them. Furthermore, Twitter’s robust ecosystem of applications enhance ways in which people can query the service.

With this tough competition, Facebook knows a big key to its future rests in search — which, before the update this week, has been a marginal part of the site. With the new search product, Facebook now offers something that Google can’t: The ability to search for what your friends have said on a certain topic or product. On the Facebook search results page, your friends’ status updates, videos, pictures and other pieces of rich content are shown when you search for big news items or a new movie.

This is a huge advantage for Facebook over its competitors in several search categories. Google can only return results that its algorithm has generated based on inferred link authority and content relevance. As for Twitter, while you can use applications (like TweetDeck) that allow you to wall off your friends from all the strangers and acquaintances you might follow, it needs to find ways to improve identity and filtering in order to show results from people you know and trust most.

In the future, helping users search for what their friends have said on monetizable topics like products will be attractive to marketers looking to serve up advertisements, though the model in which Facebook does it will need to be refined.  As we’ve also noted, Facebook could take some notes from Twitter and expand the capabilities of its real time search by letting developers access APIs and build added functionality on top of the site.

Conclusion

But Facebook still faces some challenges around search, an important technology area for the company’s future. At this point, the introduction of a new, helpful search tool will require some old-fashioned awareness building to let users to know it’s there and learn how to use it well. With any piece of technology people have used for a number of years, they become used to what it does well, and utilize it accordingly.

Facebook has always been a place to communicate with friends. By and large, it hasn’t been a place to actively search for what people are saying around products, much less the web in general. As we’ve seen with Facebook’s robust privacy settings, you can build the nicest tool in the world to help manage a key function, but it won’t matter if they don’t know it’s there or aren’t able to easily use it.

Ultimately, Facebook should stick to its strengths and not be too enticed by Twitter.  Although status update search is the strongest capability the new search service offers users, Facebook wants to expand the usefulness of its search tool beyond just friends by encouraging people to share with “everyone” more – a goal that’s clear if you look at upcoming changes to the site’s privacy settings. We’re not sure that’s why most people come to Facebook – at least just yet.