With all the discussion about Facebook’s worth and potential in the face of Goldman Sachs’ $450 million investment, a lot of data has been tossed about regarding Facebook’s size and growth—particularly in relation to Google.

Last month, before the deal was announced, Hitwise released its annual list of most-searched terms. Facebook made the top of the list for the second year in a row. This data led many media outlets to claim that Facebook has finally beaten Google and taken over the internet. But is search term data really that meaningful in determining who is winning the internet war?

Four different terms for Facebook were in Hitwise’s Top 10 search terms, including “Facebook login” and ”www.facebook.com.” These accounted for 3.48% of all searches in the US among the top 50 terms. Facebook.com also topped Google.com as the most-visited website of the year, and first did so back in March 2010, according to Hitwise.

Some critics of the data said that it was inaccurate because anyone already on Google.com, wouldn’t search for “Google.” Other criticisms include the fact that Googling Facebook just proves that users are not invested in the site enough to bookmark it or remember the URL.

Data for unique visitors and page views provides a more accurate picture of the popularity of a website. And, when looking at the information, Google’s entire portfolio, including YouTube, should be taken into account.

Ad revenues and monetization plans are also determining factors in the success of a site. In August, eMarketer estimated Facebook ad revenue would be $1.3 billion in 2010, below Yahoo and Google. (Our next social network ad spending report—with an updated Facebook forecast—will be out soon and Facebook will not have higher revenues than either portal.)

Hitwise reported that the combined Google properties accounted for 9.85% of all US website visits, while Facebook’s properties accounted for 8.93%. The just-released J.P. Morgan “Nothing But Net” investment guide estimated, based on comScore data, that 70% of US internet users are also Facebook users, compared to 81% who are Google users and 84% who are Yahoo users. And Google sites were still above Facebook in terms of unique visitors in November, comScore reported.

Earlier this week, eMarketer senior analyst Debra Aho Williamson wrote about the benefit for marketers in the recent $500 million investment by Goldman Sachs and Russian firm Digital Sky Technologies in Facebook. Facebook uses its social graph to more effectively target advertisements, and the funding will help improve that targeting and expand it across the web.

“Where Facebook and Google are meeting head to head is in going after advertisers that typically buy search ads,” Williamson told me. “Performance-based advertising is where Facebook is putting major emphasis this year. Secondarily, I predict Facebook will go strongly after the local-ad market. Once it gets Deals up and running it’s got a pretty powerful promotional mechanism for local businesses.”

The bottom line: While Facebook is the dominant site for social networking, with the right innovation, it can use the new investment to expand its footprint online and increase competition with Google and other companies. Google, for its part, is also working to improve its search and trying to succeed in the social realm as well. In the immediate future, these two sites will continue to battle for users and ad dollars, but they will share the internet throne.

Recent research from Pew Internet & American Life Project shows that one out of five US adults now tracks local issues online. As a result, several major media companies, including AOL, are starting to enter the local and hyper-local news market to lure more local online ad dollars.

First there’s Gannett, who recently announced that it would be adding hyper-local blogs in 10 of their 19 television markets. Pacific Northwest-based Fisher Communications is also launching a new hyper-local project, which will rely on a mix of user-generated and professional content to service neighborhood-style news blogs in several of their markets.

At BIA Kelsey’s Digital Strategies for Broadcasting conference, Colleen Brown, president and CEO of Fisher Communications, gave a keynote describing the project. “As an organization, we need to be able to sell everything from a $60,000 television spot to a $35 directory listing. It’s okay to roll up nickels. They’re adding up,” Brown said. “If a website brings in $2,000 per month, that’s not a lot in our business, but if you multiply times 150 sites and 12 months, that’s over $3 million.”

This push for hyper-local online content from major news organizations is no surprise. Much of the country’s floundering daily newspapers and broadcast organizations—except, perhaps, Fisher, which is a regional broadcast organization—have yet to develop or invest in a successful online news strategy. Even big media companies like the Washington Post, whose 2007 venture into the hyper-local market started and ended prematurely, have yet to truly crack the market.

Still, the local market is attractive for big and small media alike. Local advertisers continue to move their money to the Web, and online news will certainly be a prominent recipient of those dollars. By 2014, one-quarter of all local ad spending will go online, according to BIA Kelsey. Note that “local” in this context does not just mean mom-and-pop operations. It also refers to things like advertising from University football programs or graduate degrees, or regional advertising for national retailers, or local auto dealers which are part of manufacturers’ network.

Traditional media advertising, meanwhile, will remain relatively stagnant, growing just 1% this year. BIA Kelsey estimates local online advertising spending will grow 15.1% in 2010, reaching $17.5 billion. By 2014, the research firm expects local online ad spending will reach 36.7 billion.

Enter AOL, who will try to sidestep sinking local organizations by ordering an army of journalists to create and collect content for its own hyper-local sites, along with the many neighborhood-centric news sites it chooses to partner with. The company recently announced that it will be dedicating $10 million to the creation of hundreds of local news sites in areas with populations of 50,000 or less.

Just so we’re clear: We’re talking about a major (hyper) local strategy from a well-established Web company (AOL) determined to provide quality online content to targeted, niche audiences that are increasingly reading their local news online. We’re also talking about local advertisers that are increasingly putting their money online. Those are fairly powerful forces coming together. Do the local dailies even have a chance? Maybe.  AOL’s army of journalists, in reality, is made up of mostly part-time writers, and the content may not be nearly as compelling as promised. It might fail. Or it might not.

Boston-based company uLocate unveiled what looks to be the next logical step in the location-based marketing puzzle today with the debut of WHERE ads, a “hyper-local ad network” that aims to serve consumers with more geographically and contextually relevant ads than those provided by standard third-party ad networks. uLocate will make WHERE Ads available to other publishing platforms as well. (Read more…)