Facebook Inc (NASDAQ:FB) announced that it is revamping its search product last week, and analysts at Sterne Agee think the decision offers excellent long-term growth potential for the social network. They believe the new efforts could boost engagement on Facebook, resulting in greater monetization for the social network.
Facebook focuses more on search
Last week Facebook Inc (NASDAQ:FB) said it will stop showing Bing results in its Graph Search and is also refreshing its Trending feature. In their report dated Dec. 15, 2014, analysts Arvind Bhatia and Brett Strauser said these efforts demonstrate that Facebook continues to make its Search offering more robust apart from the Search offerings of other companies.
Of course Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) dominates Search, which ZenithOptimedia estimates to be about a $56 billion market this year.
Facebook already sees meaningful search activity
Facebook Inc (NASDAQ:FB) already logs about 1 billion queries each day and approximately a trillion posts. As a result, search is already important on the social network. With the revamp of the social network’s search efforts, it aims to make it more intuitive. For example, Facebook wants to make it easier for users to find old posts, videos and photos.
Over the weekend, the social network already stopped including Bing results in its Graph Search results. The company has also already changed its Trending feature, which is on the right side of users’ News Feeds.
The Sterne Agee team said refreshing the Trending feature is aimed at making it easier to locate information on the day’s most popular news stories and find comments related to those stories. They compared the new Trending feature to Twitter Inc (NYSE:TWTR)’s search efforts and how they’re related to trending topics on the micro-blogging platform.
Positive signs for Facebook
The analysts said Facebook Inc (NASDAQ:FB)’s efforts in search are a positive sign that suggest the social network is starting to feel “strong enough” about its own search product. In the long run, they think Facebook might even develop its own search engine to crawl the entire web rather than just its own social network.
The Sterne Agee analysts have a Buy rating and $85 per share price target on Facebook. Shares of Facebook Inc slipped as much as 1% during regular trading hours today.