Is there anything else that this week’s column could have been about? After months & months of rumours, leaks, presentations and high-profile talent grabs, Google finally launched its Facebook competitor™*. After the farce that was Wave, and the let-down that was Buzz, Google+ seems to be Google’s big push to date to get into social.
However, outside the reams of press about how it looks a bit like Facebook, or acts a bit like Friendfeed, or isn’t as good as Twitter, the one question that I haven’t seen asked, is exactly why Google would bother to launch a social network?
Let’s look at some numbers:
- $50 million – estimated Twitter ad revenue for 2010
- $150 million – estimated Twitter ad revenue for 2011
- $644 million – Groupon 2010 revenue, losses – $102 million
- $1.86 billion – estimated Facebook ad revenue for 2010, profits – $355 million
- $2.6 billion – estimated Groupon revenues for 2011, losses – $147 million in Q1
- $4 billion, estimated Facebook ad revenue for 2011, profits – $2 billion
- $29 billion, Google 2010 revenue, profits – $8.5 billion
Yep, Google’s profits for 2010 were more than the combined revenues of, arguably, the three biggest social brands (even without taking into account Groupon’s staggering losses).
So, considering that, why on earth would Google want to go to all the hassle of launching its own social network, when none of the existing ones are making that much money?
Well, because with everything Google, it all comes back to search.
Several reports have shown that things that do well on Facebook tend to do well on Google too. That’s not to say that Facebook impacts Google rankings – they can’t, as Facebook only shares that data with Bing. Rather, it’s proof of the fact that likes are the modern day link; that is, the sort of things that people used to link to (and still do), now tend to get liked.
In many ways, likes are a much better model for directing search results. Linking was always a bit of a niche activity – you had to have a web page, you probably had to know a bit of HTML. In other words, links were for geeks, likes are for everyone.
Therefore, if Google wants to maintain its hold on the search sector, it needs to develop its own social graph, or at least that’s how people at Google have described it to me.
The question of course, is whether they will be able to build their own social graph. After a day of playing with Google+, I like it. But will I like it enough to maintain it alongside, or even instead of, Twitter & Facebook, or will the tyranny of attention prevail? I’m not sure.
Google has hedged its bets with its Twitter deal**, but to put this deal into context, whilst many trumpeted Apple’s decision to integrate Twitter with its new iOS, it is worth highlighting the fact that the combined audience of Twitter users and Apple devices doesn’t match Facebook’s userbase. For once, Google isn’t the Goliath in this battle, and neither is the ally it has found to join it.
What is for sure is that whilst all the hype and attention surrounds Google+, Facebook and all things social, Google will carry on making bucket-loads of cash, at the same time as it continues its assault on the ever-more profitable display market, with its pincer movement of YouTube’s increased investment in professional content, and its own DSP. Of course, if Facebook decided to launch its own ad-network, then all bets will be off.
*™ belongs to the world’s press.
**Since originally writing this post, the Google-Twitter deal has suddenly come to an end, making the creation of its own social graph more important than ever.
Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.