Search, Social and Swag

Lots of people have been talking about the notion of social sites cannibalizing search. A friend mentioned this to me just today in the context of this article about Facebook’s dominance over the competition and the fact that Facebook last week topped Google as the most visited site in the US. Since the search vs. social topic seems to be coming up more and more, I thought it might be worth doing a little digging on the topic. I came across a fairly recent eMarketer report on the topic that, at least for me, cast a new light on this topic. And, while it still seems to support the notion that Google , Bing and Yahoo have little to worry about in terms of search market share [they still represent nearly all – like 97.8% – of the search traffic out there] those who “search” via social networks are often more loyal customers to the sites that are referred by them by these social groups. Now, that I think, is an interesting insight, since it suggests that social may not simply cannibalize search, it may deliver the sort of relevant and important context that takes it to a whole new level.

When you think about it, it makes perfect sense. We all know that recommendations from friends, and research supports even friends of friends, carry a ton more weight than random searches done on the Web. Sure, lots of sites have product ratings and that helps instill confidence in that product, but unless there are many, many ratings for a particular product, it’s still a real crap shoot about whether what you are about to buy will meet the expectations set by the advertising hype or web site product description and photo. Now, compare that to a search query put out via a social network, within a trusted network of friends, and voila, you have instantly lowered the barriers to purchase and simultaneously increased the degrees of confidence in that product or service. Research consistently shows that trust among friends for product decisions trumps company advertising and even celebrity advertising by big margins. eMarketer’s report shows that while still infinitesimal searchers on social networks tend to repeat visit sites that come out of those referrals more frequently than those done on the Web.

So, the big question is whether people will, over time, be more likely to use the social networks as a starting point for doing random searches for products or services than the Web. The answer is, probably not anytime soon. But, there is still every reason to think that these networks will be used increasingly in a more informal basis to ask friends for referrals in much the same way that people have been doing offline forever. The fact is that it’s happening already. We’ve all seen the post asking for the best restaurant in Denver, hotel in San Antonio or whether the new box office smash is really worth seeing. I polled my own network when I needed advice on birthday gifts for my niece and nephew and got about 7 replies in about a day. But more often than not, searching the web (or , frankly) is more efficient since I don’t have to wait for people to check in and reply, nor risk having no one post anything at all. Plus, there are more search results to choose from.

The more interesting question, though, is if or how social networks will monetize what will likely be a growing use of these trusted networks. The (ad) model which has rung the cash register for Google and Yahoo hasn’t really for Facebook . MySpace and LinkedIn have done a better job of monetizing their traffic via advertising (MySpace) and charging for access to the network (LinkedIn). Cracking this code will have as much to do with understanding what drives people to these networks in the first instance, and then how or if a search-based feature is something that can complement both the member experience as well as the bottom line. Or whether search becomes more of a push than a pull on these networks. I see that my friend just purchased the latest Prada bag and now I want that too – and there is a mechanism for me to quickly and easily buy that same bag. I have a funny feeling that we’ll be seeing more and more experiments in this area very, very soon.

Karen Webster is the President of Market Platform Dynamics (MPD), a management consulting firm that helps companies profit from industry disruption. She serves as an advisor and member of the board for a number of companies operating in the payment, technology and digital media industries. More info here.