Facebook (FB) announced its new Graph Search today in a special event that was not streamed on the internet, but widely tweeted. It allows users to search through their friends likes for recommendations on things like restaurants and dentists. Does that sound like Yelp to anyone else?
Our Tactical Trader, Kevin Cook and I discussed what this really means to the stock and where the potential future revenue stream is. We came up with the idea that this is basically market research that users perform for free. Then when there is a real life results, FB will store that and analyze it. After a few months of use, there should be good recommendations for when a person search for a particular item in a particular setting.
The fictional example would be, Kevin Cook and I (we are not "friends" on Facebook) both like sushi. We also both like Guinness. If our networks on included people from say Dallas... and they wanted to know a good spot to get some Sushi and Guinness on their next visit to Chicago... well they would see our recommendations of places that do that.
Take it to the next step... where you have searched for this, then either "check in" or better yet, post a photo of your visit. Now FB has evidence to show the power of ROI from its ads to advertisers that want to be present when just such a search is done. It can also say that the photo and the status update are other secondary ads that come from trusted sources in someone's feed.
Now you see that you are performing market research for Facebook when you use the Graph Search tool, but don't expect the ads to come anytime soon... it needs to compile to answers first.
Do you think you will use this feature? Let us know in the comments below!
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