Facebook Graph Search Winners and Losers (FB) (GOOG) (YELP) (ANGI) (MM)
At a highly anticipated event yesterday, Facebook (Nasdaq: FB) debuted its new "Graph Search" feature. The new feature will allow users to query timeline posts, photos, user interests, demographic info, check-ins, "likes" and other data. Initially Graph Search is expected to be revenue neutral for Facebook, though Zuckerberg may choose to monetize searches at some point. For a few related companies, neutral may not be the best adjective to describe Graph Search's effect.
Analysts at Oppenheimer today commented on how related companies might be hurt or helped by the new technology. In summary, they view the announcement as negative for Yelp (NYSE: YELP), neutral for Google (NASDAQ: GOOG) and Angie's List (NASDAQ: ANGI), and positive for mobile ad specialist Millenial Media (NYSE: MM).
Google:
"While the FB web search engine is powered by Bing, there are no paid links. Therefore, the initial launch would have minimal impact on GOOG's revenues. Our expectation is that FB will hold off on using paid links for the foreseeable future, to drive consumer adoption," said analyst Jason Helfstein.
Angie's List:
Helfstein predicts similar effects on Angie's List.
"Since ANGI provides reviews for niche services (home repair, health care and auto repair), the perception is that casual FB data will be less meaningful, and therefore not a threat."
Yelp:
Since Facebook's announcement, shares of Yelp are noticeably lower, suggesting it more than other companies will be negatively impacted by Facebook Graph. Helfstein explained why.
"As Graph Search allows FB users to see local recommendations directly from friends, this could pressure YELP usage over time. Note that restaurants and shopping make up 60% of YELP reviews."
Millennial Media:
"Several blogs speculated that FB would announce a new mobile ad product," said Helstein. "As this is not the case, we believe MM has a strong runway ahead of the company in 2013, with limited near-term threats, and remains a viable acquisition target."
Analysts at Oppenheimer today commented on how related companies might be hurt or helped by the new technology. In summary, they view the announcement as negative for Yelp (NYSE: YELP), neutral for Google (NASDAQ: GOOG) and Angie's List (NASDAQ: ANGI), and positive for mobile ad specialist Millenial Media (NYSE: MM).
Google:
"While the FB web search engine is powered by Bing, there are no paid links. Therefore, the initial launch would have minimal impact on GOOG's revenues. Our expectation is that FB will hold off on using paid links for the foreseeable future, to drive consumer adoption," said analyst Jason Helfstein.
Angie's List:
Helfstein predicts similar effects on Angie's List.
"Since ANGI provides reviews for niche services (home repair, health care and auto repair), the perception is that casual FB data will be less meaningful, and therefore not a threat."
Yelp:
Since Facebook's announcement, shares of Yelp are noticeably lower, suggesting it more than other companies will be negatively impacted by Facebook Graph. Helfstein explained why.
"As Graph Search allows FB users to see local recommendations directly from friends, this could pressure YELP usage over time. Note that restaurants and shopping make up 60% of YELP reviews."
Millennial Media:
"Several blogs speculated that FB would announce a new mobile ad product," said Helstein. "As this is not the case, we believe MM has a strong runway ahead of the company in 2013, with limited near-term threats, and remains a viable acquisition target."