Watch Out Foursquare And Yelp: ‘Places’ Really Shines On Facebook Graph Search

Facebook this morning unveiled a massive new product called “Graph Search” at a press event at its Menlo Park, California headquarters. While the impact of this debut will be settling in for a while, one thing seems clear from an early demo of the product: Thanks to Graph Search, Facebook is about to be much, much better for finding places such as restaurants, cafes, bars and the like.

During the press event Lars Rasmussen, one of the Facebook engineering directors who headed up the development of Graph Search, showed off how its technology deals with “places,” one of the four topics Graph Search is meant to shine (along with people, photos, and interests.)

At first look, the interface seems like it could be very competitive with products like Yelp and Foursquare that have been the top dogs in the local search space for the past several years. According to Rasmussen, Graph Search uniquely ranks the placement of places such as restaurants by using a special algorithm that incorporates things including distance, five-star ratings, likes, and check-ins from friends. This ranking algorithm, Rasmussen said, is “something we’ll be improving for a long time.”

During a Q&A session following the main presser, Facebook CEO Mark Zuckerberg said that much of the places search is powered by data received from the relatively new “Facebook Nearby” which was launched just last month. “We recently started asking people who have checked into a place to recommend it or give it a five-star [based] rating after the fact… by doing that we’re just enabling a massive number of people to rate restaurants,” he said. Because this effort has only just begun, Zuckerberg said that places search is something that only stands to get better with time. “This is a relatively recent effort for Facebook… Nearby is the first mobile interface powered by the [Graph Search] backend.”

When Nearby launched last month it had a noticeable effect on Yelp’s stock price; in the minutes since Graph Search was launched today, it looks like Yelp’s stock is once again taking a mild hit (Foursquare is a private company so it’s harder to gauge the public’s reaction there.)

Of course, this is not the first time that companies like Yelp and Foursquare are facing big competition — indeed, from almost day one, big firms such as Yahoo, Google, Microsoft and Facebook have all aimed to be the go-to service helping people figure out what exactly they should do and where they should do it. Despite it all, niche players such as Yelp and Foursquare have still remained massively popular (and, personally, are among the first places I continue to visit when looking for a place like a restaurant or a service provider such as a dentist.)

Facebook’s places search can only be as good as the data it has access to, and people have been using Yelp and Foursquare as dedicated repositories for their reviews and check-ins for years — so a big challenge here is convincing people to change their habits. But it seems clear with the launch of Graph Search that Facebook is not ready to give up the fight just yet.

Check out more of TechCrunch’s coverage of Facebook Graph Search:

Facebook Announces Its Third Pillar “Graph Search” That Gives You Answers, Not Links Like Google

How Facebook’s Graph Search Just Replaced A Major Chunk Of Google

Here Is The Ex-Googler Dream Team That Built Facebook’s New Graph Search Tool

If It’s Not In Graph Search, Facebook Hands Your Query Off To Bing

Zuckerberg Says “I Would Love To Work With Google”, But Bing Was More Flexible On Privacy

Facebook Shares Dip Below $30 Again, As Graph Search Fails To Convince Investors

Facebook Takes On Google, But Private, Personalized, Social Search Has No Clear Winner Yet

Graph Search Ads Could Be A Goldmine For Facebook

With News Feed Unable To Handle All Of Our Content, Graph Search Will Lift Facebook Engagement

What Can You Search For On Facebook Graph Search?