Last week's rollout of Facebook's (FB) "Graph Search" left investors unimpressed.
The stock shed more than 6 percent of its value. The market clearly wanted more out of the leading social networking website operator than a tool that lets users search through friends -- and friends of friends -- for information.
However, Graph Search is bigger than the market thinks. I've been kicking the tires of the Graph Search beta, and believe that it's a game changer. It will revolutionize search and endanger many models that are now thriving.
Let's take a look at four publicly traded companies that should be threatened by the potential of Facebook's new platform.
Nobody can scour the Web as well as Google, and that's why it's the rightful worldwide leader in filling up queries. From where do I know that actress that was in The Following this week? What are the lyrics to the new Vampire Weekend song? Where's the nearest place to get some Korean barbecue?
However, Facebook's Graph Search goes where nobody else can.
Show me my friends who like Katy Perry -- so I can form a group to catch her concert next month. Show me friends of my friends who are dentists -- so I can get to the bottom of this irritating molar. Show me my friends who are libertarians -- because I want to have a political discussion that doesn't boil down to just the two major parties.
There isn't much of a learning curve to Graph Search, but it may take some time for users to appreciate the site's new toy.
One of the more successful sites of the Web 2.0 revolution is Yelp. The site attracts more than 84 million unique visitors a month, and it's been able to amass 33 million local reviews of restaurants and other area establishments.
Yelp shares surrendered 8 percent of their value last week. The market didn't exactly eat up Facebook's media event, but they know that Yelp didn't dodge a bullet. Graph Search lets users scour through their friends list to see restaurants that they checked in at and uploaded snapshots of food.
The one thing that Facebook doesn't offer is actual reviews, but isn't it just a matter of time before the site lets its more than a billion active users begin rating local venues with star ratings and detailed descriptions? It will take a long time to catch up to Yelp -- and some may argue that it's better off merely acquiring Yelp to get up to speed -- but the first course of Facebook's attack is just being served.
Angie's List (ANGI)
The most vulnerable of targets to Graph Search held up surprisingly well, slipping just 3 percent last week.
Angie's List is a fast-growing company that provides paying customers access to vetted reviews of local service providers.
Graph Search has this model in its crosshairs. Instead of a premium website that offers honest ratings of contractors and other service professionals, Facebook users can tap their friends -- and more importantly their friends of friends -- for help.
Show me my friends of friends who are plumbers -- because this plunger isn't cutting it in unclogging my shower drain. Show me my friends of friends who are math teachers -- because my kid will flunk geometry if I don't find a tutor.
Tapping friends of friends as resources makes it easy to ask an original friend for an introduction, and that connection will make it more likely that you get tended to quickly and at a fair price. These may be factors baked into the Angie's List model through the in-depth ratings, but Facebook makes it easy and free.
Shares of the leading work-based website bucked the trend and rose last week, but we can't assume that the site will be immune to Graph Search.
It's too easy now to search through friends -- or more importantly friends of friends -- who work at a particular company or in a particular field. It's not just about the billion active users, but the more than 140 billion connections between them.
If you have a job interview coming up why not see if you have any friends of friends who work there for an introduction and any tips. If you're out of work, leaning on Graph Search to find folks that work in your field could go a long way to secure employment. LinkedIn has disrupted traditional workforce recruitment sites for white-collar jobs, but now Facebook could disrupt the disruptor.
Motley Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google, and LinkedIn. The Motley Fool owns shares of Facebook, Google, and LinkedIn.
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