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Facebook’s New Search Feature Could Threaten Google

Facebook Launches New "Instant Articles" and "Add a Link" Features

(Continued from Prior Part)

Search engines receive 1 billion search queries daily relating to Facebook

In the previous part of this series, we discussed how Facebook (FB) has introduced a new search feature to leverage the huge trove of data on its platform. Facebook reported that users make more than 1 billion search queries on search engines daily relating to its platform. If users start searching for Facebook information directly on Facebook, the move could threaten Google (GOOG)(GOOGL), which is the dominant player in the search advertising market.

This kind of initiative from Facebook will likely hurt Google in the mobile search market even more since Facebook now generates 73% of its revenues from mobile devices . Google is already hurting from the growing trend of users using mobile apps directly to search for information.

Mobile apps provide a convenient way for users to look for information. They involve minimal clicks. This is especially true of e-commerce platforms. Mobile apps provide users with a faster checkout process because they can stay logged in to the apps.

According to an April 10 report from the Wall Street Journal citing Livemint, Indian (EPI) e-commerce players Flipkart and Myntra shut down their mobile sites in favor of mobile apps. These e-commerce players are setting a dangerous precedent for Google. Google gets most of its revenue from mobile devices when users click on ads from mobile websites.

Google continues to lose mobile search market share to mobile apps

According to a report from eMarketer and as the above chart shows, Google’s share of mobile search ad spending is estimated to have declined from 82.8% in 2012 to 65.7% in 2014 as mobile apps become an increasingly important way to search for information.

The report also mentioned that other mobile apps, like Amazon (AMZN), KAYAK, Indeed, and Shazam—reflected in the “Others” category in the above chart—are increasingly popular search options. This is why Google is losing share in the mobile search market. Yelp (YELP) was another notable inclusion in the list. It gained share rapidly from 0.5% in 2012 to 1.3% in 2014.

Browse this series on Market Realist: