Facebook's 'big announcement' - will it be a new search engine?

When Facebook makes an announcement, the online world sits up and takes notice.

Today Mark Zuckerberg, founder and boss of the giant social network, takes the wraps off its latest product - the first big announcement since the networking giant launched the new Timeline profile

If you believe the many rumours, the CEO is due to unveil everything from a Facebook phone to to the site's own rival to Google search.

Invites sent out to this evening's launch in California had said: "Come and see what we're building".

[Related: Apple shares fall after 'weak' demand for iPhone 5]

But according to Stuart Miles, editor-in-chief of tech site Pocket-Lint.com, the addition of a search function, similar to Google's, would make the most sense both for users and shareholders.

He explained: "Our sources say that's what is happening. Facebook has a billion users and people use it already to search for people, places and things on the site.

"If you expand that capability and the social aspect of Facebook database, you might get decent search results curated by people you know.

"For example, if you are searching for a review of the new iPhone and your Facebook friends have already read one and chosen to Like it, that will appear higher up on the results.

"Facebook has a very strong indication already of what I as a user likes so it may come up with results that are far more useful to me and less reliant on keywords and SEO."

Search would also make sense for Facebook's bean counters. The company saw its shares hit a six month high last week after a fair bit of yo-yoing since the social network first launched on the US stock markets.

Whether Facebook has partnered with a big name such as Microsoft's Bing to power the search remains to be seen but Stuart Miles added: "Google makes a lot of money from search, it is their main driver.

"People clearly aren't happy about promoted posts in the Facebook Timeline but as people are now used to sponsored search, this gives Facebook a real chance to make cash without alienating customers further and to make it your homepage instead of Google."

Facebook's 2012 UK trends among its 30 million British users give a good indication as to why a search function would be useful.

Among its top 10 "Most Talked About" in this country during the past 12 months were massively popular search terms such as the London 2012 Olympics, Fifty Shades of Grey and One Direction.

But previous Facebook integrations such as Spotify for music streaming and Skype for video calling show how the online giant likes to embrace partnerships to spread its tentacles and grow its popularity and usage.

[Related: Apple shares fall after 'weak' demand for iPhone 5]

This therefore could point to the launch of a Facebook phone but previous attempts by the likes of INQ failed miserably, despite offering a branded handset with Facebook on the home screen.

There appears to be little noise coming from the mobile world suggesting a handset putting the social network at its heart is incoming to battle Apple and Android.

Geoff Blaber, of analysts CCS Insight, believes: "Despite continued media speculation we would be surprised if Facebook was to announce its intention to enter the smartphone market.

"It's hard to see what a move into hardware would give Facebook in return for substantial and relentless investment. It already has an extraordinary level of usage and engagement on mobile. 

"While full control of the device might offer more scope for advertising and could increase engagement, it is difficult to see sales volumes ever being substantial enough to represent anything more than an insignificant proportion of the more than 600 million users accessing Facebook on a mobile device every month."

He added that even if Facebook matched Apple and Samsung's mobile sales, it would still represent such a small proportion of its existing mobile users.

He explained: "Facebook is a horizontal platform the success of which hinges on widespread adoption. As such, the resource and investment required to enter the mobile phone market would far outweigh any benefit and fail to provide the reach required to deliver the next wave of growth."

However, the money markets appear to remain cool on how important today's announcement will be.

Colin Cieszynski, senior market analyst at CMC Markets, said: "The shares have been recovering over the last few weeks from a horrific post-IPO start last year and have been holding above 30 dollars of late.

"Shares have slipped back a bit in the last few days so there isn't a lot of anticipation built in. Still given the rebound of the last two months, it would likely need to be something big to push the share price further, and the shares could drop back a bit if is only small or incremental news."

Other possibilities for the big announcement include changes to privacy controls to make it easier and simpler to keep your own announcements within a private circle rather than them being seen by friends of friends, simply because someone you know has commented or liked one of your posts.

And with the forthcoming closure of MSN Messenger, in part due to the popularity of Facebook's own instant messaging system, there's also the chance of enhancements to its video chat in a bid to rival Google Hangouts.

Jason Jenkins, editor of CNET UK, said: "There's always a lot of interest in Facebook's announcements because, very simply, so many people use it. The fortunes of the company have come to represent the fortunes of new internet companies generally.

"The crucial question is always whether it has worked out a way to make loads of money from its users."

However, the money markets appear to remain cool on how important today's announcement will be.

Colin Cieszynski, senior market analyst at CMC Markets, said: "The shares have been recovering over the last few weeks from a horrific post-IPO start last year and have been holding above 30 dollars of late.

"Shares have slipped back a bit in the last few days so there isn't a lot of anticipation built in. Still given the rebound of the last two months, it would likely need to be something big to push the share price further, and the shares could drop back a bit if is only small or incremental news."