Will Facebook's New Search Engine Hit Google's Business? - Analyst Blog

Social networking company, Facebook FB , is reportedly working on an in-app search engine that will appear on users' profile pages. The search engine will help users to feed links in status updates without having to visit Google GOOG .

Currently, the pilot project will be available to U.S.-based Apple AAPL iOS users, who will see an "add a link" option next to the add photos or a location button. While Facebook is currently at the nascent stages with its search engine experiments, it is expected to intensify the competition for Google's search engine.

The addition of the in-app search feature is expected to offer centralization for Facebook users. Reportedly, this will help users save around 8 seconds that is spent on opening links, thereby enhancing user engagement on the site.

However, the primary reason behind the recent incorporation of the search engine app is to attract more advertisers toward the platform. According to news reports, Facebook is hosting a new project to deliver content from major U.S. publishers instead of just circulating links on brand pages. Reportedly, the company has been working on this since at least last fall and could launch the project this month.

However, how much the latest initiative by Facebook, which competes with peers like Twitter TWTR would hurt Google's ad revenues remains to be seen. Though Google search engine is way more pervasive in comparison to Facebook search, which only works on the Facebook platform, the customer count for Facebook is on the rise.

However, the Zacks Rank #3 (Hold) company has certain advantages over Google which can not only help it keep its user within its own ecosystem but also help advertisers figure their target market and offer a better digital marketing platform. One of these is forecasting trends via the number of ad hits or how many times a news has been shared. Reportedly, Facebook had indexed over 1 trillion posts to find out which posts were being shared, and who shared them, offering exclusive data to advertisers.

Further, Google lost mobile ad market share last year, which dropped to 38.2% from 46% in 2013 according to eMarketer. On the other hand, Facebook saw its share increase by a point. The social network is particular strong on the mobile platform and according to market research, users spend about 28% of all Internet time on Facebook.

So if the new in-app search engine becomes a hit, it is likely to help Facebook retain its users within its ecosystem for a longer duration, in return attracting more advertisers and taking more advertising business from Google.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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