There was a report in the Sunday Telegraph online that caught my eye, it was about Facebook and Yahoo being in serious talks about linking up with regards to search. A very interesting proposition that I thought I would scribble down some thoughts on as the more I thought about it the more it made sense for customers, the companies themselves and online digital marketing generally.

For customers if, and it is a very big “if”, the two companies could combine the Yahoo search expertise with the detailed data gained from the information investment  the Facebook space has  gained from its 1 billion users it could create a level of smart search that could be a game changer. A simple example; that you have”liked” news articles previously from The Guardian, your next news search could automatically promote the Guardian search results, the consumer wins by getting the article they would prefer without the trawling, the Guardian would be more willing to advertise to those they know are interested in their material and the value proposition of the search offered by the companies would be greatly improved. (In essence, this was the reason Google+ was created to supplement Google search.)

From the companies prospective, Yahoo’s woes and need to change are well documented and Facebook for all its vastness still only gets 7% of the advertising revenue of Google . Facebook site ads are well known in the industry for their generally low conversion scores whilst “Sponsored Stories” have been offering better success for online advertisers, they require far more work in creating relevant, interesting material and can only be seen  in the more vague brand awareness bracket rather then sharp ROI statistics that are so compelling for Google Adwords.

The bottom line is that the Google Adwords model of advertising still is the one real very successful model of monetising web activity without appearing too intrusive or causing user to leave. If Facebook could layer their social information on to the Yahoo search they could replicate this revenue model, with Yahoo gaining traction from the Facebook traffic juggernaut.

The size of the Facebook user base is well known, with the latest findings showing 66% of Americans use Facebook, however, Yahoo still has in its favor massive online real estates; still being a major player not to mention the likes of Flickr, Monster etc. Together they could command a huge chunk of the online world to funnel the searches. What Yahoo must learn from its last deals with Microsoft is that Google has become such a “go-to” guy for search this will only work if they could provide a “better then” or at least a “good as” Google search service meaning the users would not need to remove themselves to Google to search, then they have a powerful proposition,with the online marketing dollars following.

Finally,  for Online Marketers online search advertising is for all purposes a monopoly. Comparative research is  made between online search and online display advertising that is not Google run and of course with offline, but this cross platform comparison has its obvious limitations. What the market is screaming out for is a viable search competitor so that they are able to drill down to the keywords per segment and compare the ROI. This is needed I would argue to keep Google honest, (I must not be the only one noticing the cost of Adwords has ben going up drastically over last few years!), but also would be a healthy stimulus to give consumers better products and online advertisers value for money.

All in all, this is one tie up I think the online search market needs and therfore should be wishing to see ?

The flip side: 

Our concern is that using Facebook Ad service, for a company lauded for its data gathering is incredibly bad. The ability to segment data, drill to a date for paritcular dimensions, is not great at all , so it would require a sea change in how its advertising is positioned now for it to work, Yahoo, also is way behind to Google Adwords as providing a comparative service.

The Privacy issue could raise its head through personlised seach, but can see if the search is done within the Facebook Page that no privacy issue could rise.


Ranjit Sidhu @rssidhu