Ferreting out treasure from junk is its biggest challenge - and potentially its most lucrative opportunity, a chance to topple Google from the throne as the king of search.
If you're looking for, say, a movie to watch next weekend, Google can provide long lists of movie reviews from strangers. Facebook, though, could theoretically tell you what movies your friends liked - and what, by extension, you may be predisposed to like. That kind of service would delight advertisers - and, by extension, Wall Street.
"If Facebook would decide to become serious about search, it would be in a position to give Google a run for its money," said Karsten Weide, an analyst with IDC, a financial research company.
Facebook has had a tumultuous run on Wall Street. It made its public debut last May at $38 a share, the most highly valued technology stock in history, but plummeted almost immediately. But the stock has been climbing for the last month, benefiting from a coy invitation the company sent to reporters about a product announcement scheduled for Tuesday.
"Come see what we're building," the invitation read. It promptly set off speculation and sent the stock flying. Shares opened Monday at $32, the highest in six months, and closed at $30.95. Facebook declined to comment for this article.
The stock rally has occurred as Facebook has zeroed in on new ways to make money for a skeptical Wall Street. It is showing many more ads on its mobile news feed. It has expanded a lucrative form of advertising known as retargeting, which tracks what users search for outside the Facebook platform and tailors advertisements accordingly when users return to Facebook. It has encouraged users to buy gifts for their friends and it has charged users to make sure a post or message is seen by more of their friends.
The next frontier that Facebook needs to conquer, analysts say, is search. That would help it significantly expand revenues and, in turn, its market value.
"Search, I would say, is a very high priority for Facebook," Colin Sebastian, an analyst for Robert W. Baird & Co. said. "Facebook has this incredible treasure trove of unstructured data on the site."
Even a tease about search from Facebook's chief executive, Mark Zuckerberg, last September sent the stock up.
Speaking at a conference sponsored by the industry blog, TechCrunch, Zuckerberg dropped hints about how Facebook search might look. "I think search engines are really evolving to give you a set of answers, not just 'type in something and show me some relevant stuff', but I have this specific question, answer this question for me,"' he said. "When you think about it from that perspective, Facebook is pretty uniquely positioned to answer the questions people have."
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