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Facebook Inc (FB) & Threats to Google Inc (GOOG)’s Search Engine Dominance

Facebook Presents the Biggest Threat

Facebook Inc (NASDAQ:FB) poses the biggest threat to Google’s search engine market share.  The company receives a huge amount of monthly traffic, and it has a search engine integrated into its search results.

For the quarter ending in March of 2013, Facebook has $1.25 billion in ad revenue, which made up 85% of total revenue.  More importantly, this represented a 43% increase from the quarter ending in March of 2012.

In comparison, Google Inc (NASDAQ:GOOG)’s advertising-specific revenue for the quarter ending in March of 2013 was $11.9 billion.  This represented an approximate 15%  increase compared to the quarter ending in March of 2013.  This shows us that Facebook Inc (NASDAQ:FB) is growing ad revenue faster, and it still is perfecting its evolving methods.

Facebook offers its users the ability to search for things and find web results, but also to find groups of users to interact with on its groups with shared interests.  For example, if a customer wants to buy a new computer, it can join an Apple group on Facebook Inc (NASDAQ:FB) and find thousands of users to bounce ideas off of in addition to products on search results.

Facebook has many of these groups created, but detailed groups for specific types of products and services are still in an evolving stage.  Companies have begun to use Facebook Inc (NASDAQ:FB) to advertise, and Facebook also benefits from the user interaction in groups, which is something an ordinary search engine does not have.

There is a vast opportunity for Facebook Inc (NASDAQ:FB) if user group interaction grows, and there remains large potential for users to shift their search habits to going on Facebook to search for something and finding groups, web results, and friends with ideas on products.  In doing my own research, there remains a large amount of untapped product details on there as far as group ideas go, and it is a market waiting to be explored.  Groups are free for users to create and interact in, and many have thousands of users that log in frequently.  If the user base follows to that untapped growth, Facebook Inc (NASDAQ:FB) could be a sleeping giant in the search engine market industry.

Another new feature that Facebook has introduced is Graph Seach.  This allows users to look up anything they have shared, in addition to anything their friends have shared.  This is another feature that makes search more personable, and potentially more profitable as a targeted way to reach customeers with similar interests.

Conclusion

For a strong, not so traditional play in search engine marketing, I view Facebook Inc (NASDAQ:FB) as a great choice.

I feel that if there is a shift in the search engine market Facebook stands to gain the most from it.

Anthony Parsons has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook Inc (NASDAQ:FB), Google Inc (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT).

The article Threats to Google’s Search Engine Dominance originally appeared on Fool.com.

Anthony is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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