Facebook's Big Announcement

Editor's Note: Facebook unveiled a new social search feature called Graph Search Tuesday that will allow users to search their friends' content on the Facebook platform.

The new feature is not a global web search engine like Google, that will allow users to search Facebook's social graph. However, users can only search content that has already been shared with them.

Check out Facebook.com/graphsearch

Below is how the announcement rolled out in real time in this Live Blog. The most recent information is at the top.

2:15 PM/ET Graph Search: the next step in Zuckerberg's plan to make Facebook more valuable to users and make its network the filter for accessing the world.

The biggest problem here is that it's not yet mobile and Facebook's not being aggressive about rolling out ads.

And with that, the event is over.

Source: Facebook.com

Facebook's new Graph Search icon

2:12 PM/ET: Mike Isaac from All Things Digital asks if Facebook is relying on "Likes" or will branch out to use Foursquare checkins for Places search results?

Lookout Yelp!

Zuck says, "We recently started asking people who check in to a place to recommend or rate the place... By doing that we're just enabling a massive number of people to recommend restaurants..."

Zuckerberg adds that for Nearby they realized they were going to need ratings... there are so many people on Facebook you can get a good indication fairly quickly.

2:08 PM/ET: When asked again about Facebook's relationship with Google, Zuckerberg smiled, paused and said, "I'm trying to think whether it's reasonable to get into this...Microsoft was more willing to do things that are specific to FB..."

The biggest stumbling block according to Zuck?

Google and Facebook could not agree on how much flexibility users should have to tweak posts after the fact.

Noah Berger | Bloomberg | Getty Images

Mark Zuckerberg, chief executive officer and founder of Facebook, at its headquarters in Menlo Park, Calif.

2:04 PM/ET: When asked by a reporter if he even CONSIDERED working with Google, Mark Zuckerberg chuckled, as well as the audience, and said, "You know, I would love to work with Google... We want to make search social in general.. We haven't been able to work that out yet."

Source: Facebook.com

Facebook's new Graph Search icon

1:58 PM/ET: Zuckerberg doesn't deny the privacy question, says we know that's "going to be one of the big questions people have." But he adds that nothing will be visible now thta wasn't visible before.

Check out Facebook.com/graphsearch

Don't get too excited, Zuckerberg says this is *really* a beta test-- no word on whether people be able to build this into api.

The ad question!

"This could potentially be a business over time but for now we're focusing on building out the user experience" Zuck says. "We have had sponsored search results for a while and that extends quite nicely but we haven't done anything for this release."

Only a few thousand people will have access at first, unclear how quickly it'll roll out. Next priority is launching for mobile.

1:53 PM/ET: Zuck says tomorrow will be are "Mobile, all languages,"-- that means NO mobile graph search for now. Will start a BETA roll out today.

Here comes a schmaltzy video about graph search, with some music from Sigur Ros and lots of video and photos-- friends who like dancing... Etc.

Raising my hand, dying toask a question about ads!

1:50 PM/ET: Zuckerberg is back and says "this is really neat stuff" and stresses that this is really early days, and the product is still in the works.

He says "any time we roll out a new way to get information, people ask which pieces of content will people be able to see." So the new tools shoe you exactly what you're sharing. But building the privacy tools aren't enough, now Facebook will put "encouragement" on the home page to review what you're sharing to allow people to "bulk untag."

Wait-there's one more thing!

FB has a partnership with BING in case there's nothing that fits queries from graph search. Here's Bing powered web search-- and yes SPONSORED results-- ads, on the right side of the page!

1:45 PM/ET: Here comes another privacy speech.

They get that people will be concerned about what shows up in search results, so now they're returning to privacy results. Facebook recently updated its tools so you can see what info--photos etc-- are public, or available only to friends, or friends-of-friends. Now we're seeing how you can tell friends to take down embarrassing photos and can untag yourself.

1:42 PM/ET: Ok so here's the list of companies Facebook is trying to take on with this news: Google, Yelp (restaurant, doctor search), LinkedIn (search for people with certain career history or skills), Angies List (service search), and even IAC's Match.com (search for single friends-of-friends by city).

1:39 PM/ET: It totally makes sense that Yelp shares are dropping on this news-- now we're seeing how you can search for dentists your friends like.

Harriet Taylor | CNBC

Facebook event on January 15, 2013.

1:41 PM/ET: Now Facebook's Tom Stocky is talking about how you can search TV shows your friends like. The opportunity to show ads for TV shows that your friends like seems obvious.

Search shows that the music liked by fans of Romney and fans of Obama is pretty totally different.

Now you can search for friends who speak different languages. Until now the best place to do that kind of search was LinkedIn.

Hmm.

1:34 PM/ET: Yes, Graph search will impact revenue.

How?

If Facebook can keep people ON Facebook when they're looking for things-- rather than going to Google-- that means more opportunities to show ads.

I don't see any ads featured in the results, but the potential to offer "featured results" or search ads is huge. And with anything Facebook does, its primary goal is to drive engagement, i.e. Use.

Here comes another reminder about privacy-- you can only search results that have been shared with you. So the tighter users privacy settings are, the fewer search results, and the less valuable this new tool is.

This is a great tool for personalized search, but the question of the limiting impact of privacy is an interesting one.

Jason Alden | Bloomberg | Getty Images

1:28 PM/ET: Now Facebook is showing how you can search people based on their career history-- is this a threat to LinkedIn?

Search within Facebook was pretty terrible until now, so the ability to search people based on professional background details is a big leap.

The ability to search photos is now being featured, the cool thing is that they're ranked by the popularity of the photos. You can also search based on where the photos are taken, who they're featuring, etc.

(Read More Coverage: Facebook Rolls Out Social Search Feature)

1:25 PM/ET: Zuck has left the stage, the developers have replaced him and are Demming the search.

The auto complete seems like a huge part of this demo. They're showing how you can search for "Friends who like Star Wars and Harry Potter."

Results will be entirely unique to each user, and that all comes down to which information has been shared with you, and the results are sorted by how close you are to these individuals.

The big question I think is how the privacy piece will play out. The more private your friends are, the less stuff you'll be able to search.

Facebook search benefits from less privacy- if it pushes people in that direction it'll just frustrate people.

Now Facebook is demoing a search for single men in San Francisco. Facebook as a dating service-- it was only a matter of time.

Harriet Taylor | CNBC

Mark Zuckerberg at the Facebook launch of Graph Search event on January 15, 2013

1:18 PM/ET: OK, here's where Zuckerberg says the best is yet to come.

Right now Graph search just focuses on people, photos, interests and places -- more down the line.

Bottom line- instead of having to search the Internet, people can search THEIR internet.

Who does this compete with? Google. No question.

Why search for a restaurant or hotel on Google if you can see where your Facebook friends have gone.

1:15 PM/ET: Zuckerberg is showing a photo of his two main developers, and is showing a video of what it looks like...

"My friends who live in Palo Alto.".... "Photos of my friends."

This is moving awfully fast-- a video showing how Facebook will try to anticipate what you're asking --like Google auto-complete, and give answers.

Harriet Taylor | CNBC

Mark Zuckerberg presents at the Facebook event on January 15, 2012

1:13 PM/ET: Zuckerberg is explaining how this announcement is different than web search. Instead of delivering links with answers, this is just delivering ANSWERS... Like which of my friends live in San Francisco?

Zuckerberg says we spent a long time working on this.

He gets a big laugh from saying that what distinguishes Graph Search is filters.

1:11 PM/ET: This is truly social search. Zuckerberg says they don't want to let people search the web, they want to help people search the social graph... And that graph is huge.

Here comes the PRIVACY piece. The challenge of graph search is that every piece of info has different privacy controls.

The screen behind Zuck says "You can only search content that has been shared with you."

Facebook is trying to address how its content is different from the broad web and make that unique content searchable.

1:09 PM/ET: Zuck says three pillars- one is News Feed, what's going on, second is timeline, who is this person. Third pillar -- what is that? Things my friends like? Places my friends like?

GRAPH Search!

Check out Facebook.com/graphsearch

Zuckerberg says what's most interesting are tools to allow people to search their friends.

This is NOT web search.

1:07 PM/ET: Zuckerberg says "our mission is to make the world more open" and "if we give people tools" they'll be able to connect more.

People think about Facebook for staying connected, Zuck says. But originally people used Facebook for "Making new connections"

1:05 PM/ET: Sheryl Sandberg just showed up and is making her way to the front. Here comes Zuckerberg!

Harriet Taylor | CNBC

The media area at the Facebook Press Event on January 15, 2013.

1:03 PM/ET: The music turned off. It's standing room only.

There is still ZERO indication of what the news is, but there are a ton of reporters here, particularly those who cover mobile news. No doubt this announcement involves mobile.

But then again, anything Facebook does involves mobile.

Will the news live up to the hype? Why did the stock just suddenly drop? Where's Zuckerberg?

(Read More: Is Facebook's Ride Over?)

12:45 PM/ET: We're eagerly awaiting Facebook's mystery announcement. The social network sent out an invitation for the press to "come and see what we're building" and about 120 bloggers and reporters have turned out.

Now we're all in the "King of Ping and Pong" room in building 15, and there's still no indication of what the announcement is about. The signs on the walls say "Move Fast and Break Things," "Fortune Favours the Bold," "Focus," and "What Would You Do if You Weren't Afraid."

(Read More: Facebook Charging $100 to Message Mark Zuckerberg )

Here's what I know: It's not a physical building. It's not a phone hand set. It doesn't involve a big partner-- there's no sign of any other company here. It's some sort of product for users, not something for advertisers.

Read More: Facebook Mystery Announcement: What to Expect

And it surely is all about MOBILE and will have implications for Facebook's bottom line. My bet: some sort of mobile video chat app, a change for Instagram, or some sort of app store/game platform.

(Read More: One Thing We Know Facebook Is Working On .)

Harriet Taylor | CNBC

Facebook sign in Menlo Park, California.

Unlike many previous announcements, Facebook is not live streaming this event, nor is the company letting broadcast crews in. Why the high security? The company reminded me that back before the IPO it held a number of no-camera event like this. But things have certainly changed since Facebook went public, and the attempt to keep things quiet inevitable leads to more speculation.

(Read More: Where Facebook Is Looking to Grow: COO Sheryl Sandberg.)

And with the stock's run-up in recent months the stakes are higher than ever for the event to live up to expectations.

(Read More: Video Ads May Be Coming to Your Facebook Feed.)

—By CNBC's Julia Boorstin; Follow her on Twitter: @JBoorstin and with reporting by CNBC producer Harriet Taylor