Oct 13, 2010

Deal between Facebook and Microsoft

Today's deal between Facebook and Microsoft, which allows Microsoft's Bing search engine to incorporate your Facebook "like" data into its relevance rankings, illustrates how the balance of power on the Internet is shifting from search to social networking.

Microsoft got interested in search in 2003 for a lot of reasons, not least because it saw how Google was shaping the behavior of Internet users.

In user testing and from various data collection systems like the MSN toolbar, Microsoft noticed that a lot of users started each Web surfing session by entering a search term into Google, and returned to the site throughout the day. Google's blank white page was becoming the de facto start page for the Internet.

For a lot of people, that's changed.

For instance, a reporter at a major daily paper recently told me that her company no longer spends a lot of time on search engine optimization – that is, trying to get stories to show up high in Google's search results. Instead, they've found that a ton of traffic is now coming from Facebook (and to a lesser degree, Twitter).

So now they're focused on trying to write the kinds of stories that will get lots of people to post them on their Facebook pages. (Which is what they should have been doing anyway – writing interesting stories that appeal to lots of people. Imagine that.)

Today's deal brings the power of that anecdote home. Google's algorithm will continue to be great when searching for pure information with no particular agenda. But what about figuring out what movie to see this weekend? Or finding out when Neil Young has a cool new video and accompanying album? Or getting instant recommendations on a plumber to fix your suddenly broken water heater? In each of those cases, I got the answer from my Facebook friends.

These are the kinds of commerce-related questions that power Google's revenue today, as they're most likely to get users to click on related advertisements. But as more users turn to Facebook to answer these kinds of questions, advertisers will follow. Microsoft gets this transition, and is more than happy to speed it along.

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