How Facebook Thinks Its New Graph Search Will Help Advertisers

Facebook expects its new "Graph Search" product — which allows users to search their friends' information for common interests and recommendations — to bolster its Pages offering for businesses.

Pages for businesses are Facebook's most essential building block for advertisers. They're free, any business can have one, and they're a place for advertisers to make offers to their fans, provide photos, and interact with customers.

Facebook said today that as Graph Search allows people to find out which restaurants or movies (or anything else) their friends like, it places added importance on businesses keeping a relevant, up-to-date Page.

Graph Search has two obvious consequences for businesses:

1. Advertisers with good reputations among users' friends will get more business than those with bad ones. This suggests that Graph Search is a threat to Yelp and Google's Zagat listings.
2. If Graph Search drives more traffic to Pages, it will go some way to mollifying advertisers who were dismayed by changes to Facebook's News Feed algorithm change last year (sometimes called Edgerank) that reduced the number of fans that automatically see any given post on an advertiser's page.

Here's the crucial part of the company's statement:

Every day people use Facebook and discover things from their friends and the businesses and brands they’re connected to. Whether it’s seeing a movie recommendation from a friend in their News Feed, finding out about a great sale from their favorite store’s Page, or checking out a new game a friend just played, people are getting relevant information through the social graph.

But beyond discovering things in News Feed, people on Facebook are also seeking out information via Facebook Pages: in fact, every day over 150 million people visit Pages, not just via their News Feeds.

Today we’re starting a limited beta release of Graph Search, enabling people to find information through the filter of their friends. The limited beta of Graph Search is available only to people who use Facebook in US English. The rollout will be gradual, starting with a very small number of users.

With Graph Search, people can search the social graph by looking for things like “sushi restaurants that my friends have been to in Los Angeles,” “hotels near the Eiffel Tower,” or “TV shows my friends like.”

If you have a Page on Facebook, Graph Search can make it easier for people to discover and learn more about your business.

Disclosure: The author owns Facebook stock.