Microsoft-Facebook alliance could spell trouble for Google

Teaming up with the social network could be the key differentiator Microsoft's Bing needs to challenge Google's search dominance

Microsoft advanced its partnership with Facebook this week, a move that could be the biggest threat to Google's search standing yet.

Microsoft and Facebook announced that they're teaming up to make Internet searching more social. Now when someone uses Bing's search engine to look for a new car or a book, she can see which ones her friends liked. Searchers now are able to more easily get their friends' take before they make their own decisions.

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While industry watchers said this was an interesting move for search, it also holds big implications for Google. What's notable is that Facebook turned to Microsoft for this deal and not to the market leader, Google.

Facebook CEO Mark Zuckerberg, speaking at the press conference on the Microsoft campus Wednesday, said there was a specific reason he wanted to go with Bing.

"They really are the underdog here," Zuckerberg said. "They're incentivized to go out and innovate. They have all these smart people and are trying to do all these new things."

Google, not surprisingly, threw off any far-reaching implications and said it likes the challenge.

"We welcome competition that helps deliver useful information to users and expands user choice," said Gabriel Stricker, a Google spokesman, in an email to Computerworld. "Having great competitors is a huge benefit to us and everyone in the search space. It makes us all work harder, and at the end of the day our users benefit from that."

But industry analysts said this Microsoft-Facebook partnership could spell trouble for Google, despite the fact that the search giant accounted for 72.15 percent of all U.S. searches last month. Both Microsoft and Yahoo have thrown stones at Google, but nothing has yet chipped its hefty search lead.

So, if Microsoft's teaming with Yahoo, which is in second place to Google in search share, couldn't rattle Google, why might this new partnership have Google executives looking nervously over their shoulder?

"Let's face it, Bing has been a big disappointment, but this could act as a differentiator," said Zeus Kerravala, an analyst at Yankee Group Research. "People prefer Google to Microsoft, but they prefer Facebook to Google. If the partnership makes Facebooking better, then it could pull users away from Google."

In other words, a major social network, like Facebook, could end up being Google's Achilles' heel.

Ray Valdes, an analyst with Gartner, said the partnership announcement was less about Facebook and Microsoft than it was about Facebook versus Google.

"The real importance of [this week's] announcement is that it highlights the growing strategic conflict between Facebook and Google," Valdes said. "There is a battle for the future of the Web, and it is not about search engines, but about the social Web. The competition is between the new and the old -- between Facebook as the early leader in the social Web, and Google as the dominant player in the content Web. Everyone else, such as Microsoft, Yahoo and Twitter, will play a secondary role, and will start lining up on one side or the other."

And what could make this situation more interesting is that Google is reportedly working on launching its own social network. Rumored to be dubbed, Google Me, the social network is considered to be Google's shot at creating a Facebook killer.

Google hasn't had a lot of luck in the social networking arena. Its Google Wave social networking service was shut down in August and reviews of its Google Buzz were lackluster. But the company has learned from its failures and may be ready to try to snare some of those advertising dollars away from Facebook.

Ezra Gottheil, an analyst with Technology Business Research, said there's a big battle brewing between Google and Facebook, and Microsoft may have found a way to use that conflict to chip away at Google's massive market lead.

"[The new partnership] moves some searches from Google to Bing," he added. "For major Facebook users, I believe 'social search' is attractive, and many are likely to switch to Bing for all searches.... Not only does [Google] lose users, but they lose young users."

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin or subscribe to Sharon's RSS feed. Her email address is sgaudin@computerworld.com. Read more about web 2.0 and web apps in Computerworld's Web 2.0 and Web Apps Topic Center.

This story, "Microsoft-Facebook alliance could spell trouble for Google" was originally published by Computerworld.

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