Big Deal: A spotlight on search and surveys

In a week where the battle to provide the most useful online searches – and the advertising dollars that go with it – heated up with the launch of social network Facebook’s Graph Search the Big Deal analysis is looking at how corporate venturing can help firms maintain an edge.

While a book’s index was a useful tool offline, online it is invaluable to have the ability to search more, and more effectively to draw out the answers people want in a world of increasing amounts of content and ways it can be shown.

Search engine Google controls about 70% of the western world’s search traffic of websites and built a successful video showcase after its purchase of YouTube and powered open-source mobile phone technologies through the creation of Android phones.

However, its market capitalization and cashflows at least in part depends on the ability to look behind companies to see their information. This is a challenge if its relations with the largest US social network, Facebook, sours and access becomes harder.

In turn, Facebook sees a way to monetize its users’ traffic by allowing searches of people’s recommendations and activities and has built a relationship with software provider Microsoft’s Bing search tool (helped by Microsfot’s shareholding in Facebook).

Both Facebook and Google, therefore, are interested in the way people respond to questionnaires as indicators of their tastes, which is why Google’s development division, rather than independent corporate venturing Google Ventures unit, has bought into SurveyMonkey’s private equity recapitalization.

Facebook’s strategy into SurveyMonkey’s $444m shareholder sale is perhaps more oblique as it might be relying on its co-founder’s family office, Iconiq Capital, and relations with venture capital firm Social+Capital set up by a former vice-president (and which has corporations as its limited partners) to provide some insights.

And at least one lesson might have already crossed over. David Goldberg, chief executive of SurveyMonkey, said: “This transaction affords us all of the capital benefits of a public offering without the costs and distractions of an IPO and the demands of operating as a public company.”

It follows the public hype and travails in Facebook’s stock before and after its flotation last year – Facebook’s share price nearly halved after its IPO but is now only down by about half on the back of rising sentiment about its money-making potential through search.