Facebook’s integration of Microsoft’s Live Search raises two main questions: first, how does Facebook stand to benefit? And second, how does Microsoft? To answer these questions, we must recognize that each company faces its own type of problem and, therefore, stands to benefit uniquely.
Facebook and social networks in general still struggle to prove that they can monetize their vast inventory of pages effectively. When Facebook users browse their friends’ profiles, they tend to pay little or no attention to advertisements - even when those ads reference friends or target the users’ particular interests. In contrast, web searchers are generally more attentive to advertising because they are actually seeking information about the things being advertised. Therefore, adding a dose of search to Facebook should lift overall returns on the site’s advertising efforts.
Live Search has a bigger and more life-threatening problem. Whereas Facebook can continue its gradual accumulation of users without monetizing them effectively, Live Search usage keeps getting smaller and smaller (both in terms of market share and, less consistently, in terms of total queries). So Microsoft needs this integration to deliver it raw users and their queries even more than it needs to monetize the ones it already has but who are slipping away.
As the graph below from September shows, Microsoft’s U.S. search share has dropped from 9.8% to 8.3% since the start of this year. Total monthly search queries stand at nearly 1 billion, compared to Google’s 7.4 billion.
We know from ComScore that Facebook draws about 41 million unique users per month in the US. Assuming each of those users conducted just one web search per month, that would be a boost of 41 million queries to Live Search - just a drop in the bucket. If each user made 10 queries, the boost would be a much more substantial 410 million, almost 50% of Live Search’s current US search volume. Still, you would have to factor in the unknown revenue split that’s made with Facebook for each search ad.
On a worldwide basis, Facebook had 154 million unique visitors in August. As it so happens, ComScore currently places the total number of worldwide search queries on Facebook at 186 million. That comes out to about 1.2 queries per user on average, which would come to 50 million U.S. search queries a month. However, as Sitepoint noticed, Facebook itself pegged search volume at over 600 million a year ago, so the average number of queries per user could be higher.
Given how prominently Facebook has integrated Live Search, and how accustomed most users are to searching elsewhere, it would not be surprising if the number of queries per user stayed closer to 1 than 10, even when lumping new web searches together with old profile searches. Much of this can be attributed to the user interface, since it requires users to be fairly proactive if they want to conduct a web search vs. a regular profile search. The layout of search results also leaves much to be desired, since it doesn’t return advanced results like images and it’s also a bit of an eyesore.
As far as branding for Microsoft goes, there’s only a small “Advanced search on Live.com” label at the top of results that directs Facebook users to the main Live Search site. This, too, can’t be expected to do much for Microsoft given how discreet it is.
Of course, this is just the start of an integration that will probably get more elaborate over time. We can only hope that Facebook make Live Search not only more visible but more useful as well by, perhaps, incorporating social data into the results. While they’re at it, they should enhance the search functionality for querying Facebook’s own data since that too leaves much to be desired.
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how does facebook benefit? - 15B valuation with teh cash infusion from Microsoft !
how does Microsoft benefit? - display ad rights
distribution is as key as the product
This is an example of two companies pooling their weaknesses to try and find a synergy. Having Live search up there doesn’t do anything to make the user experience any more valuable. I already have the Google toolbar, which has the search function built right into it. At this point, I think MSFT is playing defense against Google/Myspace.
God, I hope not.
I agree. Its a coup de grace that’s in order.
I like this. I think it’ll end up being a win win for both of them and it will only get better as they start integrating more and more features.
Peter
http://www.thewebwar.com
Absolutely not. People don’t use Facebook to search the web.
hehe… does anybody use live search at all?
elderly
I’m not elderly and I use Live, Ask etc., basically anything but google. Live results aren’t bad and to be honest I’m sick of google. One company dominating the web isn’t good for anyone, competition is.
Its already hard enough to get a social user to click or even look at an ad. FB users do not go to FB to be productive. They go there to waste time. They would be better off putting egos aside and reopening talks with yahoo. This partnership is not gonna help Ms one bit. It does help FB put more hot air in there bubble in hopes of IPO.
FB, MySpac are fads just like the hula hoop.
Not a place for conducting serious business or consumer search.
Both are in trouble and need to diverisfy there portfolio. Go vertical, Go Strategic, Go custom, Go niche, Go location Based. Go Personal.
VerticalLocator.com
Hendrickson, you small time hack: haven’t you been fired yet for slander?
i think microsoft is right , they need some time.
http://it.liuhuafang.com
I actually like “Live Search.” It has improved in the last six months or so. I am also not elderly;).
Hendrickson lives above Arrington’s Garage.
Hendrickson: Is your confirmation name Steven Glass?
are the sponsored sites on the right advertisers from Live Search?
I tried a couple of searches on both and the sponsored sites were not exactly the same
How does it benfit? It doesn’t. This is just a way to say to help their $250m investor make back some money. No one cares to search through Facebook. Their concept of having the web develop ‘within them’ by launching their developer platform is proof enough that people don’t like walled gardens. This falls right into that genre.
I wonder if this is the culprit for Live Search to issue the following message and force me to enter a CAPTCHA phrase?
“Your search has triggered our robot detector. This happened because your search was similar to searches used by some automated computer programs. The robot detector helps keep our site quick, accurate, and reliable.
To continue your search, please enter the letters and numbers you see in the following picture into the text box, then click Continue.”
I just realized that if Yahoo-AOL deal and the Yahoo-Google ad deal go through, Google ads may eventually have access to 88% of all US search. Wow.
When people want to search they go to a search engine, when they want to over-share their personal life, they go on facebook. I don’t see over-sharers using this weak-sauce to search for anything.
Targeter ad-supported sites are well entrenched to overcome economic-driven challenges while producing a respectable income infusion.
What in all Heavens was that crap I just poured out of my fingers????
I open my Facebook, and they’re “looking for 40+ years old gamers” (I don’t fit any of the two parameters) , they are desperate to hook me up with singles in my area ( even though I’m not looking for any kind of relation other than my iPod), They want me to buy Insurance from Ohio Insurance (even though I do not live in Ohio), and they want me to rent “The Notebook” from NetFlix (I HATE chick flicks - I’m more of a “Smoking Aces” kind of guy)
Is that “intelligent, profile-based advertising”?
No, that is Screw-The-Advertiser-With-Fake-Demographics-And-Illegaly-High-Prices-So-I-Can-Afford-A-New-Tesla ad strategy.
On the other hand, Online advertising, is WAY better than getting a call at 8:45 at night from Hyderabad, India, asking you to subscribe to Blockbuster
impossible!
I love headlines where you can switch the subject and the object.
What are those 1.2 searches on Facebook for? I would assume names of people who they want to be friends with on the site? I don’t see how that monetizes with accompanying advertisements like general searches on the Web.
This reminds me that I was at a conference in San Francisco and I distinctly remember a woman telling me that search on Facebook was going to be one of the next big things. I need further explanation, because I don’t see it.
so microsoft paid that much money for this? ahah!
“Whereas Facebook can continue its gradual accumulation of users without monetizing them effectively”
Wait, what? Companies can keep growing and never monetize their business effectively? What is this, 1999?
For what it’s worth, I am DEFINITELY not elderly and I am a very happy customer of Live Search. Most days, the live.com homepage is quite picturesue (great UX) and in my limited experience, I’ve never had noticibly different search results from either site. For image and video search, I actually prefer Live.com by far. In addition, with http://www.searchperks.com, I also earn a free mp3 every four days by using live.com. Now THAT is an incentive! I’ve also gotten cash back on one occasion (and a great deal) from Live Search cashback.
dude, are you for real?
You sound like a sales person from MS
Here is a general question about search-advertising on Google, Live or Yahoo.
How many of the clicks actually convert to sales? Meaning, are the advertisers actually making off the search-ads or is it just a gamble?
Does it seem more like investing in stock markets. First it was the big players like asset management companies and hedge funds running the show, and when online trading happened, retail investors thought they too could make money like the big guys and they started throwing money at stocks. Day after day, the retail/ individual investor burns his fingers but continues to play the “game” in the hope of a silver lining.
Do you see the same happen with the search-ads or is there is a real ROI ?
which is earning more money from ads ———>
orkut or facebook?
Facebook’s web search results seem to be somehow censored: try and search for “porn”…well, just as a test
Live Search isn’t itself very popular so what would be the advantage for facebook. I guess live search is trying to take the advantage from facebook popularity but people don’t use social network for searching purposes. I guess, that won’t work
Mudassir
http://www.richappsconsulting.com