There is a point where, like IBM and MySpace and any other market leaders get too far behind the margin curve, it results in a systemic collapse. That happens because the environment changes faster than management can change the company. I haven't figured out entirely what causes some companies to re-invent themselves (Dell, IBM) and others to become someone else's lawn ornament (Yahoo!, AOL).
[1] "they've made a few attempts at search over the years and none of them have really panned out so far." -- which is exactly the symptom of a cultural or organizational impediment.
[2] Bing is helping too of course.
This is not true - Google won by being associated in people's minds with "I want more information about XYZ". Facebook won by being associated with "I want to see what my friends and family have been up to".
> And the desktop browsing experience is fading and fading.
Google has a very strong grip on mobile. They own Android, they own the most popular browser on iOS [1] and their margins are so big that they can outbid competitors to be the default search engine for the second most popular browser.
> One has to consider the question, what would the marginal cost of adding quality search to Facebook's infrastructure be? And what sort of margins would their search product need to return to support that?
It would probably cost Facebook as much as it cost Microsoft, and the return on investment would probably be similar - ie. not great.
[1] http://thenextweb.com/apple/2016/03/18/study-shows-chrome-be...
About the only data I can think of that Google has is behavior on the search results page (which links people choose against a query, bounce rates), which is probably very important, but FB could eventually catch up.
FB actually already has a search engine, they just don't have a separate site for it. But it's there, front and center (well up and center) on their page. They can slowly tinker with it to make it more and more relevant. Until they reach a point where it beats Google and is worthy to promote it to the media (or skip the media, just promote it to their own userbase).
And in my case they have all my search history, all my Gmail messages, all the YouTube videos I watch, all the Android apps I install, all the places I search in Google maps.
And since I leave the 'track location' setting unchanged on my phone, Google also know where I live, when I wake up and go to sleep, where I work, how long I spend at the gym, where I go shopping.
And since my friend also has an Android phone, they likely know that he's my gym buddy and how often we get together. And since my girlfriend uses Google Maps on an iPhone they can probably see that she's my girlfriend and where we like to go out together.
(But there's an important distinction: Google is not free to use that data in gmail they have.)
Wait, are you saying that if I write, "I love coffee" in Gmail, Google cannot use that to show me an advertisement for Starbucks in YouTube?
Working for Google, I do know that we have intense scrutiny and strong internal regulations for what one can do with customer data---and especially so with data that's private like emails or your browsing history.
From where I work in the company, the procedures and regulations are mostly concerned about <when not and when and perhaps how restricted> we can use customer data to reproduce and investigate bugs.
The data Facebook can use is mostly semi-public: posts on your wall that have varying but generally weak privacy expectations in the first place. Friend lists are probably totally fair game. (I don't know what Google does with G+ circles, but nobody is using G+ anyway.)
Anyway, all speculation apart from that there are pretty strong safeguards at Google.
(Google and even Facebook or Amazon etc treat your information much more carefully than probably almost any other place you put them. Eg most banks have incredible weak password protections, and my ISP is probably selling my postal address to spammers left-and-right.
The only reason to be afraid of what those giants do intentionally is that they are actually competent, and will do the best they can in the limits they imposed on them by themselves and regulators. (Break-ins by government-sponsored hackers are a different kettle of fish---but even there, the giants' efforts at fending them off are probably the most competent private sector responses.))
Actually as a Google shareholder I want the Gmail team to share customer data with the YouTube team. I doubt that Google's privacy policy prevents this, and it would certainly offer better targeting of ads and therefore more revenue. Is it considered evil for one branch of a company to share customer data with another branch? Wouldn't most users expect you to do that?
The challenge is that both Bing and Google give adequate results, and slowly over time Google has gotten more and more annoying when they detect I'm looking for something to buy (which really lights up the page with about 95% non-organic content). Bing is bad too but oddly, less bad.
In my opinion Google is sacrificing their own search product[1] on the altar of staying alive looking for an answer that works. The challenge with that strategy is that a company that doesn't need search advertising to stay alive will have the freedom to compete with Google in terms of quality user experience.
One has to consider the question, what would the marginal cost of adding quality search to Facebook's infrastructure be? And what sort of margins would their search product need to return to support that? I can imagine a Facebook search product with the accuracy and reach of Google's but without the crappy pages that nobody really cares about anyway. With 15 - 30% margins instead of 80+% margins.
I remember watching IBM fade in the 1990's. It wasn't pretty and for as long as I could remember up to that point it had been the biggest fish in a very big market. The gorilla as some would say. I watched as an alliance of Microsoft and Intel decimated the retail business, Sun, HP, and later Dell decimated the server business. Nobody who mattered really thought IBM was dying or even threatened.
Google won by making Google a destination in every web browser, and Facebook is winning by making Facebook the destination on everyone's phone. And the desktop browsing experience is fading and fading.
Something will come along and derail Facebook but it won't be another social network. It will be something which changes a fundamental part of people behavior and interaction with their world.
[1] And to be clear it is creating a backlash by attempting to monetize so heavily the user experience is compromised as are the search results.