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Even without a smartphone to compete with Google and Apple, Facebook’s graph search is going to be a headache for Google Search — and has effectively leapfrogged Apple own plans to enter the search market.

If following the news and rumors of mobile gadgets and hardware is your game, then yesterday’s “big announcement” from Facebook probably fell way short of the mark you for in terms of excitement. The unveiling of Facebook’s new Graph Search is a less tangible product to wrap one’s head around. Doesn’t Facebook already have a search feature?

Yes, they do, but Graph Search is actually a big thing for the search market — and for avid Facebook users (all billion of them). In case you were unaware, revenues from online ads are way down — especially for Google AdWords and Facebook. While Google appears to be flailing for solutions to fix this problem, Facebook is circling the wagons: they’ve recently limited the reach of posts on Facebook pages in order to force businesses into using Facebook ads to reach a larger audience, and now Graph Search will leverage Facebook’s deep banks of personal user data to to keep its users from leaving Facebook — thus being exposed to more advertising.

This sort of thing is Google’s dream — and Apple’s nightmare.

Back in October of 2011, I wrote an article about how Siri is a search engine, and is Apple’s own investment into the search market, which they hope to differentiate from Google Search. Voice command aside, Siri’s search engine draws not only on Google and its indexing-style of search, but also vast reserves of stored data as well. This is a different sort of search model — one that has been explored by the Wolfram Alpha search engine. As a result, Siri is now pulling data from lots of different sources — not just Google.

Facebook’s Graph Search, however, trumps what Apple has been doing since the launch of Siri in 2011.

Because Facebook is so massive, it controls perhaps the largest and most valuable set of personal data in the world today. It is already being leveraged through Facebook’s incredibly targetable ad management system, which allows advertisers to target incredibly vertical, granular ads to niche groups of Facebook users. Up until this point, however, access to user data was limited to ad targeting. Graph Search is now going to (eventually) give all users access to Facebook data vis a vis a much more sophisticated search algorithm. And rumor has it that Facebook will continue to leverage Bing for search results that it cannot match. So, Google won’t even get any love from Graph Search.

This is a problem for both Google and Apple, since a more robust, engaging search on Facebook will essentially keep people on Facebook, thus decreasing Google’s search market share (to what degree, we still do not know). But for Google, their search product is still quite different from Graph Search — it indexes all the websites of the world. It’s more of a directory of all sites, whereas Facebook is more of an intranet — a web within the web.

But what does Apple have in the way of search that differentiates from Google or Facebook?

Yeah, there’s Siri’s voice control — but that is a user interface, not a style of search. The problem is that Apple will now need to compete with Google’s index-style of search and Facebook’s draw on stored user data. Initially, it looked like Siri was moving in the direction of local search as a means of giving mobile users real-time information based on their current location. Now, Graph Search is going to do that as well.

In the next year or two, expect to see Apple take some kind of evasive action regarding Siri and its search investments. But I would also not be surprised if Facebook does eventually bring out a smartphone of its own. Together with Graph Search, a Facebook phone would give users a very unique local mobile search experience that neither google or Apple will be able to match.

By Michael Nace