Wednesday, July 29, 2009

Facebook versus Google?

Greg Sterling has some good thoughts on why Facebook and Google are not in competition:
Currently the use cases for Facebook and for search are quite different.

Facebook is entertaining, Facebook is fun, Facebook kills time, Facebook enables me to keep in touch with people. But Facebook, generally speaking, is not "useful" in the sense that Google is.

For its part, Google delivers information efficiently but is generally not "entertaining" or "fun."

It's very likely that the two sites will simply co-exist fulfilling different types of needs and interests ... Neither can be expected to fundamentally undermine the core business of the other.
But what are Facebook and Google's core businesses?

It is true that the uses of Facebook and Google differ. People mostly seem to go to Facebook because they find it entertaining. People mostly go to Google because it is useful.

But, the core business of both, where they get their revenue, is from advertising. And, while Google's search advertising does quite well, they have struggled much more in non-search advertising. And non-search advertising is the problem Facebok needs to solve.

Toward the end of the Fred Vogelstein's Wired article (which Greg Sterling references), Fred pinpoints the critical area of conflict:
Facebook [is] confronted with a difficult challenge: turning [their] massive user base into a sustainable business.

[Google] inked a disastrous $900 million partnership with MySpace in 2006, a failure that taught them how hard it is to make money from social networking. And privately, [Googlers] don't think Facebook's staff has the brainpower to succeed where they have failed.

"If [Facebook] found a way to monetize all of a sudden, sure, that would be a problem," says one highly placed Google executive. "But they're not going to."


Anonymous said...

Is he aware of Google Reader, Google Friend Connect or other Google products that are *directly* targeting "social activities" online? It seems that he is only considering Google Search.

walrusoflove said...

the next big step in organizing the world's information is organizing your personal/social information. therefore i would say its the same space.

no idea if FB figures out their secret sauce....but the opportunity is so large that if they don't someone else will soon enough.

my big question is will people actually trust any single, centralized entity to own their comprehensive 'identity' under the terms and models we are currently offered? there are major pros and cons. personally, i think revolutionary new models (business, legal, db, etc) will have to emerge in order to realize the visions many have for this space.

Dave said...

I don't know if I'd agree that Facebook is primarily about being 'entertaining'. Keeping in touch with friends is something that's more 'useful' than 'entertaining'.

I suppose it varies with individuals though - while some people spend a lot of time using FB's quizzes, poker apps etc., I use it to keep in touch, network, find and inform others of events.

I wonder if I'm in the minority?

On another note, YouTube is an area Google have been finally having some success at monetizing! :)

Neal said...

I'm not sure the lack of FB brain power argument carries much water. If Google's brain-power was able to properly monetize social networking sites then they would have a 'AdSenseSocial' product.

It's easy to critique when you solved an easier problem.. people explicitly signal Google search about their interests and the keyword marketplace helps make it easier to match the right ads to that interest.

To monetize social network and other UGC one must build a system that separates the signal from a massive amount of noise. If Google had the central novel idea on how to do that wouldn't they have applied that to MySpace? We're not seeing all the quiet failures within Google.

Greg Linden said...

Hi, Neal. I agree the Googler's comment is pretty snide.

But, there is a point there that Google, with their horde of PhDs, has been unable to solve the problem that Facebook needs to solve, and not for lack of trying.

One interesting tidbit to watch is that Facebook has managed to poach some particularly strong Googlers recently, including Greg Badros, who was a key person at Google working on AdSense.