Rumors are swirling about a possible swap of Bing to Facebook by Microsoft in exchange for Facebook Shares. If these rumors are true, Larry Page had better be sweating a bit. For that matter, so had Mark Zuckerberg. Facebook and Microsoft have never struck so close at the heart of Google’s Cash Cow as they could do with this deal, but neither has Facebook taken such a risk as a brand.
The threat to Google isn’t immediate. User habits, browser and mobile device, enterprise resistance, and logged-out searching are among the things they’d have to overcome, all areas where Google has the upper hand. Not to mention that the brand name is synonymous with the act.
But over time, and if it continues to grow, Facebook could make Bing a serious player in search. Many people spend hours a day on Facebook, and if they can cajole or connive or even force their users to use Bing, they could add the missing piece of their social equation: capturing their users at the moment they are looking to buy. Worse yet for Google, Bing’s integration with Twitter will give Facebook a formidable arsenal to wield against Google, tying the two largest social networks tightly together with Microsoft search.
It would be risky for Facebook, too. They would absorb a division of Microsoft that runs at a loss of $2.5 billion per year (that is the loss, not the total cost of operating), in the hopes of making enough market share up to be a competitive force with Google, which has taken down enough rivals at this point to raise serious doubts that even a silver bullet would stop them.
Microsoft, on the other hand, would be dumping a sinking ship onto the shoulders of a rising star, and reaping most of the benefits in the short term. These considerations make me doubt these rumors, but not enough that I think anyone at Google should breathe easy yet.
The complications involved in getting users to choose a new Search Engine, as any Google rival can attest, go beyond having an integrated search feature. Using Yahoo! email does not guarantee that you use Yahoo! Search (which is actually Bing Search).
Searchers are accustomed to Googling things; Google Search is often used by logged out users, for whom social search integration may not matter (and so far it hasn’t mattered to many users in the slightest). Most web browsers use Google Search by default. Google is the default search engine of nearly all mobile devices. Google Search is integrated with many websites, is popular in the media, and is, frankly, the best Search Engine in many ways. These are just a few of the challenges Facebook would inherit.
None of this means Google can rest on its laurels. It does mean that Google may well be facing its most credible threat since they first came to dominate the market. Google Search is still a big Cash Cow, helping to fund their push into other markets.
Google+ and YouTube may not be enough to eliminate this threat. Android may not be enough to eliminate this threat. Chromebooks may not be enough. The Chrome browser and Mozilla Firefox may not be enough. Unless Google wants to risk a battle they might lose, they will need to act quickly and smartly to ensure themselves a strong corner in the social market. They need to add to their existing social arsenal with strategic acquisitions in areas Facebook is lacking.
They’ll still have their chance at attacking Facebook’s social graph of friends and relations, but not if they lose their largest revenue streams. Realistically this would be a long-term investment for Facebook, an anticlimactic struggle against a Titan, rather than the quick-draw media image of a “Google killer”.
And if the investment doesn’t pan out? Maybe Facebook and Nokia could form a club. They could have their own T-Shirts: Microsoft Ruined Me and All I Got was This Lousy T-Shirt