First Mover’s Advantage
When I first used Facebook Graph search I was disappointed by the limitations of the Beta version. Releasing a product that is not ready is a risk, as some users may not give it a second try (remember Apple maps?). Nonetheless, Facebook has a competitive advantage expressed in the quantity of users and volume of data it possesses which keeps competitors away.
Impact
Graph Search is a new way of finding information on Facebook, apart from Timeline and News feed. Unlike other functions, it does not provide ready mix of data but allows a meaningful search for information (first order change).
Second order effect is changing user’s focus from “socializing and communication” to “search for information”. This is a significant shift as it can improve company’s advertising revenues, by providing ads better suited to customer’s current focus; as a result, they are more likely to click on them and purchase advertised goods (boosting Facebook’s revenues).
The Graph search will also make the “likes” more meaningful for the companies that heavily invested in them.
Strategy
From a perspective of Porter’s 5 forces framework, Graph search addresses principally threat of new entrants and substitutes: it creates a new user experience that is not provided by anyone else. The competition is unlikely to develop similar product as it does not have a necessary input of data and thus may have more difficulty in attracting Facebook users (e.g. Google+).
Concerns
Privacy is a concern that comes to mind first. Graph search can access only information that is marked as public by the users; however, it seems that many users are not aware of how to manage their privacy settings.
Quality of data, especially “likes” is another issue that the company will have to address along the way. Do the likes really represent what we like?
I’m therefore looking forward to Facebooks’ next step, which hopefully will include rolling out a fully-baked product that will provide a tangible value for users.
Sources:
http://www.forbes.com/sites/tomiogeron/2013/01/15/live-facebook-announces-graph-search/
http://www.bbc.co.uk/news/technology-21032506