How Facebook Intends to Supplant Google as the Web's No
Facebook appears to have turned a corner in the advertising business and is now moving into the heart of Google's territory: search.
The social network will take $2.19 billion in display advertising this year, according to estimates by eMarketer. Google (GOOG) will only get $1.15 billion, the same study claims:
Those numbers ought to scare Google. If Facebook can replicate its display success in the search arena, then it might supplant Google as the web's No.1 utility.
The claim that Facebook is bigger than Google in display advertising is a shock. Any company overtaking Google at anything is unusual. But display banner ads, etc. is only a small subset of online advertising, which is dominated by search ads. In search, Google remains massively dominant. eMarketer noted separately that Google still represents just under half the entire market for digital advertising:
Google [is] taking nearly 41% of all ad dollars [with] Yahoo! and AOL losing share. Facebook, boosted by display advertising, will get 7% of US online ad spending this year, pushing past Microsoft to become the third largest ad selling company in the country. Last month, it took the first step on that journey via an ad campaign from Microsoft (MSFT)'s search engine, Bing!, which highlights the way Bing's results pandora jewlery are informed by the opinions of your Facebook friends. Microsoft and Facebook have a deal in which Bing serves Facebook's search needs:
The campaign appears to threaten Google because it underlines two theories that people have used to suggest that Google's dominance of the web is vulnerable to the Facebook's momentum:
Search results informed by the opinions of your Facebook friends might be more relevant than Google's more objective approach to search, which is based on the apparent importance of the content.
Facebook has highly distinctive data on its users it can use to inform their search results. because you friended the club.
Facebook gets its act together
Until recently, Facebook appeared to be struggling to reach maturity in the ad business. Its ad offerings mostly display were regarded as unremarkable. It had to reach out to Madison Avenue to explain to agencies the type of things that can be done on Facebook. Clients previously grumbled that Facebook was difficult to deal with. Bizarrely, the company is still not interested in mobile pandora gold bracelet price advertising.
This week, however, Facebook debuted a new ad vehicle designed by Leo Burnett, in which an advertiser sponsors a conversation starting question on its fan page and in a regular display ad. If users answer the question, the debate becomes part of their Facebook news feed. (It is only the eighth ad format available on Facebook, remarkably.) Facebook pandora bracelets and charms also reportedly has ambitions to become a music server, too, that may compete with Apple (AAPL)'s iTunes, Pandora (P) or Spotify (or simply pit them against each other as apps on Facebook).
Until now, Facebook was merely a cool tool for keeping in touch with other people. Facebook's search results were once laughable compared to Google's. But if Facebook can get its search play right it may be able to leverage its pandora charms online shopping intensely used service to provide users with the kinds of things search results and music they would normally experience outside Facebook.
In other words, where once Facebook was merely part of our world, Facebook intends to become the world in which we merely exist. Currently, that "universal utility" role is largely performed by Google. It may not be a permanent state of affairs.
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