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.
