Will Facebook dominate Google As a Referral Source?

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If Google had managed to acquire Facebook back when Yahoo failed to do so, Google would truly dominate the online referral business. But it appears that Google and Yahoo really missed the boat on the social end of the spectrum.

As MySpace crumbles, the decision of Google executives not to purchase the social network incredibly cheap in 2005 is looking better than it once did—though that $900 million search deal didn’t work out so well, either; Google spent three times as much money to deliver ads to MySpace than it would have cost to buy it earlier.

But Facebook is a different animal. Yahoo saw its potential early, offering a cool billion to a young CEO reluctant to sell (or attend early morning negotiations for that matter, according to some reports). It’s hard to know what price would have pushed Mark Zuckerberg over the mattress edge, but two years or so ago it would have been exponentially cheaper than now, with 200 million users to leverage.

But it’s not so much audience size that makes Facebook valuable (though that’s a huge part of it), and it’s certainly not the ease of monetization. It’s the social network’s innate ability to refer traffic, which is essentially at the heart of Google’s own power.

Perhaps few paid much attention when metrics firms reported Facebook drove more traffic to Perez Hilton’s celebrity website than Google, but what about a site like the Huffington Post? Ryan Spoon, web entrepreneur and former eBayer, reports Facebook directs 18.6 percent of HuffPo’s 13 million visitors. Google refers just 11.6 percent.

ryanspoon.com

Aside from one, the other top referrers are either search or social: Yahoo (5.16%), Digg (4.43%), and NyTimes.com (2.5%). Collectively, social sites drive almost a quarter of HuffPo’s traffic, compared to 16 percent for search engines. Obviously, search and social together approach half. If Google had ponied up early to get Facebook, Google would be sending close to a third of that traffic over, as Spoon points out, part algorithmically and part socially.

Perhaps it was the constant threat of antitrust action that kept Google at bay, perhaps it was simply a missed opportunity. Regardless, it gives webmasters a lot to think about, specifically, now that SEO is rather standard, how to leverage Facebook’s power as a traffic generator.

Spoon notes HuffPo creates viral content that encourages Facebookers to share. Creating something people want to share is an art in itself, and certainly HuffPo benefits from its newsy, political nature. But how could a different kind of business target this group that spans several demographics?

Obviously, the information Facebook has on its users is a goldmine the social network isn’t expressly permitted to mine for privacy reasons, though they can feasibly offer general demographic information. But we’re not talking advertising so much as we are content people appreciate enough to spread around.

There’s no one answer to this, but just as a general direction, people like quirky trivia. A blog post, or better maybe, a well-wrought press release to a news organization or popular blogger, could be just the ticket.

Say, for example, a shoe seller issues ten interesting facts about the history of shoes. Even better: Conduct a small experiment with a sample of people who agree to have their movements tracked and publish walking maps of where those shoes go, how many miles are walked, etc. That may be just the kind of thing people find interesting.

For marketers, the possibilities for social marketing are nearly limitless. For Google and what are now traditional search engines, the possibilities may be surprisingly full of limits.