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In the world of search engine optimization, 2012 has been full of talk about the blurring line between search and social. With Big Brother Google unleashing Panda and Penguin to keep black hats in check, the industry has been forced to take a more holistic approach to SEO. Google’s acolytes are now paying attention to other players in the space, and Facebook is suddenly alone in the spotlight.

A Facebook social search engine, which is becoming more of a reality every day, would completely change the way we approach search. As an SEO specialist at The Search Agency, I’ve been closely monitoring this paradigm shift away from indexing billions of pages.

Search and social are merging, and it is clear that Google and Facebook both hope to claim this new territory. Google is actively attempting to take more of the social market with Google+, most recently adding Google+ Local Pages, which forces businesses to create a Google+ business page in order to have control of the Google reviews landing page. It remains to be seen if Google will be able to eat into the social space and win over businesses that have concentrated their social efforts on Facebook.

For its part, Facebook has been very quiet about its foray into search. Rightfully so, because users may not be receptive to the idea of a Facebook search engine. But Facebook isn’t trying to replicate Google’s search engine indexing. Since the company can’t compete with the sheer volume of Google’s more than 8.6 billion indexed pages, it needs to change the paradigm and use its existing social network to approach search with a leaner, smarter eye. If Facebook can develop a social search product that curates good results based on users’ profiles and social graphs, it might be able to compete in the search business.

The following are some of Facebook’s potential advantages in building search functionality.

1. Facebook crawls may be more efficient than Google

Facebook doesn’t actually need to crawl the Web like Google. Instead, it can crawl just the pages that are liked or linked to. Facebook doesn’t have to scan lines and lines of code either. It can crawl just enough to create a snippet and thumbnail, or skip directly to the Open Graph tags.

2. The breadth of Facebook user profiles

Facebook could implement a weighted algorithm that returns curated search results based on a user’s interests, likes, event attendance, in-app activities and social graph interactions. This is all self-identified data given to Facebook willingly by users and is perhaps the most accurate and in-depth user data available.

Meanwhile, Google has to guess almost everything about a user based on a comparatively meager amount of information, including IP location, previous searches, and maybe a Google+ profile. Google is very good at figuring out user data and sometimes user intent, but not always. However, in Googlelandia all searches are weighted nearly equally, because they mostly rely on the actual search term.

3. The Facebook “like”

As Facebook looks to curate search results, a Facebook like can be treated as a vote for a page. By prioritizing all the liked pages connected to a user’s social graph, page load time can be minimized and the most popular pages can be cached to load quicker through selecting which pages are most likely to be clicked. This is very similar to the Google +1 feature, but a Facebook like is a more trustworthy vote and potentially drives a higher click-through rate, because your Google contacts are more removed than your Facebook friends.

4. In-app activities and “Action Links” within the Open Graph

When a Facebook user listens to a song on Spotify or reads an article on the Washington Post’s social reader, this is a strong signal of intent that can affect how Facebook curates its search results. Publishing in-app actions to a user’s friends becomes a valuable vote for that app, song, article, product page and brand timeline. All in-app activity collects valuable user data that can help curate search results.

On Facebook, users generally identify the type of content they share, and this will be even more prominent with the newly introduced Action Links which allows businesses to add additional “action verbs” into the Open Graph structure. The objective is to allow businesses to personalize company pages and product pages. It can drive engagement with this customization and allow for purchases directly from Facebook, such as with an “add to bag” Action Link.

We’re deep in the age of the social Web, and Facebook has been extremely careful to avoid questions about developing a search product and it has tried to drop the word “engine” to avoid any direct competition with Google. Facebook is not trying to replicate search engine indexing, and it has no desire to compete directly with Google’s search engine — only Bing has stepped up to that challenge, and a partnership already exists between Bing and Facebook to power a social complement to Bing’s search results. This partnership further proves that Facebook has no interest in developing an actual search engine, but rather wants to leverage its existing resources and social network to develop a new social search paradigm. It still remains to be seen who will dominate the intersection of social and search. But Facebook is extremely well positioned to edge out Google — if they can figure out how to move users away from the existing indexed search paradigm.

Jessica Lee is a SEO specialist with The Search Agency, the largest independent U.S. search marketing agency with expertise in search, display and social media. 

Image courtesy of Flickr user FindYourSearch.

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Berlin’s Moviepilot.com, which is making its big push into the U.S., hopes to kill both birds with one stone. And, judging from the $7 million Series B round it revealed on Thursday, it’s armed with a boulder.

The round was led by new investor DFJ Esprit, along with Deutsche Telekom’s T-Venture, Grazia Equity and Creative Industries Berlin — all of which have already been backing the site’s German incarnation, moviepilot.de.

That German version is quite a different beast, however. It’s a Google-driven rumor and recommendation site that in turn powers Telekom’s T-Entertain IPTV package, and it’s very successful, with two million monthly uniques and 1.4 million Facebook fans. In fact, that makes it Germany’s most popular Facebook page, bar that for soccer team Bayern Munich.

But, as CEO and co-founder Tobi Bauckhage told me, it was only a first step:

“Based on the recommendations and based on this Facebook understanding, we said we had a chance from Berlin to create a new generation movie site that is concentrating on early fans, using the Social Graph and the Open Graph to learn about the fans, and kickstart recommendations based on that.”

So in October last year the startup opened Moviepilot.com, an English-language second iteration that’s plugged into a separate Facebook page that’s already amassed four million fans. Combined, the two services constitute the social network’s largest movie fan community.

Fans can use the service to discover new projects and follow them — one of Moviepilot’s many facets is that of a curated, personalised news site. And for the studios, the community can provide some sorely-needed marketing insight.

“We’ve always thought the real power of tech is not the distribution but discovery, not even of films, but discovery of audiences,” Bauckhage, a film-maker himself, said. “Discovery and recommendation is still supply-driven, but we’re moving to a model where you have to learn about your audience and build audiences.”

Audience insights

The problem, Bauckhage explained, is that the whole industry revolves around the opening weekend.

“It’s a supply-driven industry with a very limited shelfspace, with only a limited number of cinemas and screening rooms,” he said. “The anomaly of this industry is that you have a market entry phase of only 48 hours – this predetermines the money you’ll make in the whole lifecycle of the movie.”

So what do studios do? Generally, they launch a barrage of poorly-targeted advertising just before the all-important weekend. Moviepilot.com is in a position to tell them who’s following their projects, right from the first rumour to the release.

“For example, we had 15,000 fans for the Avengers before the film came out,” Bauckhage explained. “They use Facebook Connect to follow a project, and we get information back from the fans and understand what the fanbase is made of. We can see that, hypothetically speaking, they are 15 times more likely to be Buffy fans – we believe that the real dimension of how you understand audiences is not demographics, but taste.”

And the industry already seems to be lapping it up. Twentieth Century Fox is currently paying Moviepilot to promote the upcoming Abraham Lincoln: Vampire Hunter to early fans, and the studio knows it will get very granular data in return. Universal, Disney and Paramount are also clients.

So there you have it: Moviepilot is a pretty unique combination of fansite, rumour and news aggregator, and social marketing agency. Its new funding will allow it to open an office in Los Angeles this year, with a dedicated sales team in tow.

The likes of IMDB and Flixster should be watching this development with a concerned eye.

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A screenshot of Facebook's Timeline interface (click to enlarge)

Facebook released some metricsaround early partners for its app platform, showing how the apps affect their traffic. The results? Partners like Pinterest, Fab.com, Artfinder, Foodspotting and Foodily are seeing large increases in the number of users connecting to their sites.

The Timeline apps platform was first announced at Facebook’s f8 developer conference last September, with 60 apps going live just a few weeks ago. But despite the newness of the apps, many partners are already seeing a significant uptick in traffic.

In the fashion vertical, virtual pinboard site Pinterest, for instance, has seen the number of Facebook users visiting the increase by more than 60 percent. Fab.com has also seen a 50 percent increase in traffic from Facebook, with fashion and style discovery mobile app Pose touting a 5x increase in signups since implementing the app.

Food sharing app Foodspotting reported a 3x increase in the number of visits and activities, while recipe site Foodily touted a 4x increase in new users since its Timeline sharing app was released. Art discovery platform Artfinder has seen a 60 percent increase in new visitors from Facebook, while Rockmelt has seen users add 14 new articles on average, driving 20 percent more traffic.

Of course, it’ll be interesting to see how this evolves as more apps and app makers appear on the Facebook platform and users have to distinguish between the signal and noise. In the meantime, however, a relatively small number of apps seem to be benefitting from tying into the social platform.

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My company, Wetpaint, was fortunate to participate in a beta phase with Facebook and be a launch partner with The Washington Post (NYSE: WPO) social reader project; in the process, we have gotten a glimpse of how to build media for a fully social web, and it’s had a dramatic impact on our business.

We have learned that without question, there is a ton to be gained in audience acquisition, branding, and retention by integrating into the Open Graph. And, based on the few months’ head start we’ve had, I wanted to provide a brief guide to what has worked, and explain how to take full advantage of the Open Graph.

Here, then, are the four most important elements:

1. Determine what’s inherently social in what you do for your audience – This is the most important part, and it’s not easy, because people don’t want to share everything they read online. Rather, they share the things that are helpful to others, or contribute to their public identity.

Don’t fight it. Work with it, instead. Provide content your audiences will use to define themselves and enhance their reputations as a curator. With your content, what specifically can they share, and what can it say about them?

I especially like this item from a cousin who recently posted this recipe for fried Coke (what? oh yes!). If you think it means she’s a southern gourmet, you’d be right: she makes the best fried chicken I’ve ever had. And posting recipes like this makes sure we all know about her decadent down-home style.

People also respond to things that make them smile. Who wouldn’t like a picture of a cat laughing with a dinosaur? Sharing it makes a statement about what gems you can find, what loops you’re in, what makes you chuckle, and that you like brightening your friends’ day.

We are thumbs-up with things that back our opinions, or show we are in the know about things that are important to how we want to be perceived. For a news site, this means interests and causes that we want to support; and, for a sports site, it’s our tribal badging and admiration of teams and players.

And for games, movies, and events, it’s more about sharing something special together. Whether a concert or a conference, convening with others turns content into an experience. The phenomenon of Social TV that we see at Wetpaint, and throughout all TV programming, is proof positive that media events are made to be shared.

2. Start thinking in verbs – other than “Like” – To date, publishers have been focused on the page. Now it’s time to think about the interaction – not just with the page, but with the content. Think in verbs. Facebook has suggested a handful of obvious ones. Your audience should “watch” videos; “listen to” songs; and “read” articles. But beyond that, you can also add your own creative alternatives: “view” photo galleries, “lust for” celebrities, “OMG” scenes on TV, “vote for” reality TV contestants. All of these help define a relationship between your audience and what they love. And as a publisher, you get to take credit for that introduction and its viral distribution among a user’s circle.

3. Own objects, not just content – In the now-more-open Open Graph world, the objects of our affections are no longer just dumb pages. Rather, you can define objects in the real-world – with the promise of improving Facebook’s and your audience’s connections to them, and to you. As with the examples above, the limit of what you can define is constrained only by your creativity; however, the focus should be on objects that are natural social extensions of your consumer experience. Don’t try to socialize objects that no one wants to share – I don’t want to circulate that I “zero balanced” my “bank account.”

4. Live in Facebook’s world – It’s not really just Zuckerberg’s world … it’s your users’ world, too. 500 million Facebook users are logging in every day, and spend seven hours per month (on average) on Facebook. That’s why it’s important to create an experience that blends with the social world; and that experience needs to be connected, and in real-time. The more you integrate into Facebook’s clearing house, the more you can benefit from seamless transitions, access to connected user data, and user expectations of implicit sharing. Facebook Connect is critical; as is earning the Likes to be in a relationship with your audience. When you do that, you can program your users’ news feeds. At Wetpaint, we average 30 impressions per fan per month. I’ve never had that much communication in any of my relationships with friends or family (much to my mother’s dismay, which she reminds me of all the time), yet our consumers have it with us all year long. And, beyond the news feed, creating a Facebook canvas app (we’re working on a new one now) means you can truly be everywhere your audience wants you to be – both in Facebook and on the Web.

With the new Open Graph features, a short-term way of thinking about the opportunity is that you are integrating into Facebook’s technical architecture. But a far more meaningful – and, ultimately, more beneficial – way of thinking about it for both your users and your business is that you are integrating into your users’ lives.

I overheard someone at last year’s F8 event say that Facebook is no longer “Face”-book, it’s really becoming “Life”-book. It’s that level of integration with real life that can create the most powerful opportunities for the next era of the Web.

Ben Elowitz (@elowitz) is co-founder and CEO of Wetpaint, a web publisher, and author of the Digital Quarters blog. Prior to Wetpaint, Elowitz co-founded Blue Nile, the online retailer of luxury goods. He is also an angel investor in various media and e-commerce companies.

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Recall that Facebook let Hulu and a handful of others unroll an app-based news feature that tells users what media their friends are consuming. The feature amounts to a powerful testimonial and has produced impressive popularity spikes for the Guardian, the Washington Post (NYSE: WPO) and music-service Spotify.

Facebook has so far made this sharing feature available to only 20 or so strategic partners but, starting in January, it plans to open the gate to a crush of other companies that are clamoring to offer sharing apps of their own.

Hulu, one of the chosen early-birds, in September announced that it was offering:

a fully integrated experience that enables you to watch Hulu videos without leaving Facebook. And because you are watching through Facebook, the videos you watch will be instantly shared with your friends if you choose to do so.

But the response to Hulu’s initiative has so far been decidedly overwhelming. Based on my own news stream, no-one is using Hulu’s sharing app (although Facebook tells me three friends have downloaded it). And on the company’s blog post announcing the feature, commentators have complained that it stinks and that it doesn’t actually facilitate sharing. Meanwhile, the tech media have ignored Hulu’s Facebook play altogether and instead focused on whether the sharing feature will save its competitor, Netflix.

What is going on? Why did Hulu decide to unroll a feature that could have given it an important first-mover advantage in social media but then fail to execute?

The most likely explanation is the Video Privacy Protection Act, a 1988 law that forbids video rental services from sharing customers’ rental history without their permission. The law is currently preventing Netflix (NSDQ: NFLX) from hopping onto Facebook’s platform. In Hulu’s case, however, media outlets reported that the company had found a way to work around the law.

The company declined at the time to explain just how it was complying with the VPPA. Hulu did not respond to an email today requesting details about its legal strategy.

It’s also possible that Hulu’s efforts to comply with the law are responsible for the complaints that its sharing feature is not frictionless. The Hulu feature as it’s now designed requires users to leave Facebook and watch content in a separate window — perhaps this additional step is actually a form of legal compliance. I’m at a loss to explain how this would work but I also feel Hulu must have done something to shield itself from the very large lawsuit that would arise if it violated the VPPA.

Whatever the explanation, the upshot is that Hulu may have blown an opportunity to use an early entry on social media to gain ground on Netflix and other video-streaming rivals like Amazon (NSDQ: AMZN) and Veoh.

As for Netflix, the company yesterday told TechCrunch, “Unfortunately US members can not currently connect their Netflix accounts to Facebook because of the ambiguous Video Privacy Protection Act.”

Netflix is trying to amend the law so that video rental companies no longer have to obtain customer consent on each separate occasion they wish to share information.

The House passed a law to this effect this month but the bill still awaits approval from the Senate and the President, meaning it could be months before Facebook users can automatically share their movie choices with friends.

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As best-selling author Barbara Ehrenreich wrote in her recent book Bright-Sided, that positive thinking is “a water carrier for the business world, excusing its excesses and masking its follies.” I am a cynical optimist and that is why I often wonder, what are likes really good for? In a recent piece, Danny Sullivan, the editor of Search Engine Land, pointed out that Facebook Likes tend to boost traffic to various websites. He cites Facebook data as saying that by implementing Facebook Likes, denim maker Levi’s say they received a 40-times increase in traffic.

But did those likes increase Levi’s sales or their market share? No. The San Francisco-based denim maker is still sucking wind when it comes to growing denim sales, likes notwithstanding. Confounded, I started looking for answers, partly by reaching out to my virtual Twitter friends. And that led me to Scot Wingo, CEO of Channel Advisor, a web commerce services provider based in Research Park, North Carolina.

Money and Likes

When I asked Scot if there was a direct correlation between Facebook Likes and actual sales, he candidly admitted that at present there isn’t much correlation. But he, like Facebook itself, is betting that the Facebook Likes will become an increasingly powerful signal in transactions on the web.

“In 12 months it (Facebook) could become a legitimate monetization option,” Wingo predicts, and in the process it could end up becoming the disruptor of web commerce. It would then become a big thorn in the side of Google, which currently derives nearly 40 percent of its revenues from e-commerce-related activities. He is predicting that we are going to see “like” influenced web commerce during the holiday season this year.

Wingo says that, today, merchants big and small are interested first in Facebook, then in mobile and then in local when it comes to their e-commerce strategies. With nearly 700 million members, Facebook has the momentum to become a big driver of sales for these merchants. And the Like button is at the heart of it.

Not all likes are created equal

On Facebook, there are likes that allow you to become fans of a brand or like a photo or an article. Of course, when you like a brand, you also open yourself to becoming the “sponsored ad” that is sent to your friends on Facebook. A lot of retailers are doing that. There is another aspect to that: when you like a brand (aka you become its fan), you are essentially giving the brand permission to message you. Think of it as a way for retailers to use Facebook to send you coupons and deals based on what you like.  While these deals are not personalized, they are personal since you are a fan of that brand.

And then there are the off -Facebook Like buttons — about two million of them spread across the web. There are two kinds of off-Facebook Like buttons (though they look the same) – ones thatfolks like GigaOM use on their website and the special Open Graph protocol-based Like buttons that are for brands, retail outlets, musicians, anyone who wants to create a direct relationship with an actual person. A Facebook spokesperson described these Like buttons as Facebook away from Facebook.

So for example, if you like a band it will publish that information to your newsfeed. So far only entertainment sites and a handful of news outlets are using these special kind of like buttons. However, they are the ones that can create a new dynamic for commerce. Facebook’s Open Graph API has had some enhancements and in theory it allows retailers to have richer metadata such as product types and SKUs attached to their Likes.

In theory, if you liked a pair of jeans on the web, a retailer can target you on Facebook with a discount to get your business. Remember the “personal data” resides with Facebook and not with the retailers, so these interactions can only happen on Facebook – for now. Similarly, the metadata attached to “likes” can help deliver search results that are optimized around one’s preferences, as long as you are logged in using Facebook Connect.

Google doesn’t like the Likes

And that is one of the things spooking Google, which launched the “+1” feature almost as a defensive countermeasure, though it’s not clear if that is going to have any impact anytime soon. Google’s latest revision of the +1 button will allow publishers to embed the button into their web properties.

In a blog post, Google writes, “Today, we’re releasing +1 buttons to the whole web. As a result, you might start seeing +1 appear on sites large and small across the Internet.”

To the naked eye, it seems all about bringing more traffic to web publishers, but in reality it is all about business, as Frank Watson had pointed out on Search Engine Watch earlier this year. As Google itself notes, “With a single click you can recommend that raincoat, news article or favorite sci-fi movie to friends, contacts and the rest of the world. The next time your connections search, they could see your +1’s directly in their search results, helping them find your recommendations when they’re most useful.”

The Like button, when put in the context of web-commerce, is as powerful an indicator of intent as search is, Wingo said. “I would say because it is more personal and social, it is one step closer to the end customer, and as a retailer, that is something that is very appealing.” No wonder Google’s chairman Eric Schmidt is kicking himself for blowing it when it comes to social!

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But every crisis brings an opportunity. Facebook can emerge from the privacy brouhaha it started a lot stronger than it was before it began. Of course, it won’t be easy and if Facebook fumbles, it will almost surely emerge a lot weaker.

A lack of nuance

The controversy is pushing Facebook into the middle of an unpleasant and messy conversation that has needed to take place ever since the social web began to mature nearly a decade ago. Right now, the debate is about privacy protection but at its heart it’s also about discretion and the freedom to exercise that discretion whenever we choose.

In the world beyond the web we habitually show different sides of ourselves in different situations. But the current structure of the web doesn’t allow for any nuance. Offhand comments can be preserved for decades, to be repeated again and again. Random actions can be tracked by advertisers, and shape how they respond to you. Managing your online persona involves forethought, perseverance and sometimes hard lessons. Right now, the social web is designed as if you have only one identity, when in fact we all have complex and sometimes contradictory aspects to ourselves. Some people thrive in this environment, but for most there’s a learning curve ahead.

Facebook, with its Open Graph, ignored this learning curve, just as it did with Beacon a few years ago. And so it has stumbled right into the thick of this thorny debate of how we manage ourselves online. But precisely because of the company’s central position, it’s ideally positioned to find a way to solve it, and ultimately to profit from it. It has a chance to lead a long-term effort to clarify the privacy issue, and design a broadly accepted social network that can accommodate some of the complexities of human nature.

A broader challenge

But will Facebook seize that opportunity? It’s not looking good. The company held an all-hands meeting last week to discuss privacy protections, but it wants to keep the details of that discussion private. Its insistence that users love the new changes also rings false. Most users are divided between tolerating the changes or being uneasy about features that benefit Facebook and its partners while offering little value to users themselves. There are already plenty of people who have chosen to remain absent from Facebook and social networks in general. Open Graph threatens to add more people to that publicity-shy camp. Instead of becoming ubiquitous on the web, Facebook risks becoming useful to an increasingly smaller portion of the web’s population.

Emerging from its current crisis will be painful. Facebook needs to capitulate, if not to its loudest critics, than to the concerns of its everyday users. For most people, 50 different privacy settings is 49 too many. To appeal to the widest audience as possible, default settings need to keep all user data restricted to users’ friends. The challenge to engineers is then to make customizing privacy controls as intuitive and welcoming as possible. The broader challenge for Facebook’s leadership is to entice us into voluntarily offering more personal information to the web at large.

Some of us are already sharing our lives to the web at large, while many of us never will. But what we all have in common is that the decision of where to draw the line between our public and our private selves belongs to us, and no one else. Honoring that principle will mean Facebook forgoes short-term revenue. But over the long term it’s the surest way for Facebook to reach its potential.

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