Google co-founder Larry Page is paranoid -- and justifiably so...
As the Associated Press reported this week, Page "has a Facebook fixation... When he replaced his mentor Eric Schmidt as Google's CEO last April, Page insisted that the company had to be more aggressive about countering the threat posed by Facebook's ever-growing popularity."
Why? As I detail in my new book Friends, Followers and the Future: How Social Media are Changing Politics, Threatening Big Brands and Killing Traditional Media,
... for all its success, by the end of the decade the company faced a host of problems. Google's awesome power and reach proved to be a double-edged sword; competitors and regulators alike assailed it for a series of antitrust and privacy violations and began demanding remedies. At the same time its Web supremacy came under attack by new competitors such as Facebook and Twitter, as Google lagged behind in what was fast becoming the most engaging and potentially lucrative online phenomenon of all -- social media."
"Social" has now begun to replace "search" as a leading focus of online activity, as the new "contextual Web" takes the place of the data-driven Web of the early 21st century. This is bad news for Google, even though the company still sold $36.5 billion in advertising last year, ten times more than Facebook. Despite the revenue gap, Facebook poses an existential threat to the continued hegemony of the Internet search giant by constantly amassing vast new amounts of information valuable in targeting ads more precisely to its 800 million users. With Facebook walling off and withholding that advertiser-friendly information from search engines, Google has been forced to play catch-up in the ever-more competitive social network space.
But as I explain in Friends, Followers and the Future, Google simply may not have the necessary "corporate DNA" to succeed in social. Certainly its track record over the years is not good, although Google's repeated failure in the social networking arena doesn't result from a lack of desire. As far back as 2003, its executives had tried unsuccessfully to purchase the leading social network Friendster; the next year the company launched its own social network called Orkut. Although the service became popular in India and Brazil, where until recently it remained far ahead of Facebook and other competitors, Orkut never caught on in the United States. As a result, savvy investors such as venture capitalist Fred Wilson complained that Google had "... missed the whole social networking thing. Facebook beat them to that."
Alarmed at the rise of social media and the attendant perception that they had missed something important in the evolution of the Web, Google executives tried again in 2010 by adding what they called a "social networking feature" to the popular Gmail service. Called "Buzz," this new tool for sharing personal information allowed users to post status updates, share content and read and comment on posts in much the same way they could on Facebook or Twitter. The decision to piggyback the new network onto Gmail, which already had more than 150 million active users, was meant to vault Buzz immediately into the top ranks of social networking sites.
This long-anticipated "Google approach to sharing," as company flacks phrased it, was clearly an attempt to restore Google's reputation as an innovative and important force in the digital information space. But would Buzz actually "change the way businesses communicate around the world," as Google's director of product management Bradley Horowitz crowed? Was company co-founder Sergey Brin correct in his claim that Google would reinvent social networking in much the same way the company had reinvented search a decade earlier?
The answer soon became obvious, as privacy and trust concerns caused Buzz to flop almost immediately. The hasty decision to use Gmail as the launch pad for building a social network meant that everyone in its user base was instantly enrolled -- like it or not. Although Google executives moved swiftly to contain their self-created crisis, rolling out a "privacy reset" that dropped the automatic sign-up and offered clearer instructions on how to opt out and keep messages private, the damage was already done, and Buzz was widely derided as an "antisocial social network." Nearly a dozen members of Congress expressed concern over claims that Google Buzz "breaches online consumer privacy and trust," and asked the FTC to investigate. The Electronic Privacy Information Centre alleged that Buzz violated consumer protection law and was "deceptive," as the service became the subject of a class action lawsuit. Meanwhile, the leading technology blog Mashable called Buzz the "biggest tech flop of the year," and noted, "With Google's biggest attempt at social now a mere afterthought, nothing stands in Facebook's way."
At the end of June 2011, Google surprised the tech world again by making yet another attempt to compete with social media leaders like Facebook and Twitter: the Google Plus project, heralded as "Real-life-sharing, rethought for the web." Now, although Google Plus has attracted more than 100 million users since its debut -- a number far greater than Facebook's tally at that stage in its history -- the site resembles a cyber-ghost town, where visitors spend an average of just a few minutes per month. Set against the six to seven hours on Facebook, the numbers pale by comparison. Part of the problem is the fabled network effect: with Facebook and Twitter already commanding huge attention, many questioned the need for another entry in the social space. Nevertheless, Google Plus and other social networking features introduced recently will provide Google with a means of learning more about its users' lives, a la Facebook -- and to try to employ that newfound knowledge to sell more ads.
Leading industry analyst Om Malik of GigaOM is among those convinced that we are moving from the "sell-search-and-consume methodology that has become part of our basic Internet behavior and turned Google into a gazillion dollar company" to a new world of social search -- which will shift power to individuals using social tools to express their opinions. In other words, it will democratize and humanize the search process by using "friends and followers" instead of algorithms to provide context to and filters for our ever-expanding amount of information.
"The company that is most impacted by these developments is Google, the shining example of the Data Web," Malik has noted. "By deploying its awesome infrastructure and massive computer resources, Google has enjoyed an advantage over all its search competitors." But that advantage is now disappearing, as the manner in which we find and use information on the Web is being rapidly transformed. Despite its endless efforts to succeed at being social, Google simply may be incapable of doing so. The company "lacks the DNA that would mark it as a social entity," says Malik, and it has never "been comfortable dealing with the 'social or 'people' web. Look at any of their offerings -- they have the warmth of a Soviet bunker."
Facebook's threat will only mount following its impending initial public offering of stock, likely to be completed next month. The IPO, which is expected to raise $5 billion, will surpass Google's 2004 stock market debut as the biggest ever for a U.S. Internet company. "Larry is driven by his paranoia about Facebook," said Ken Auletta, author of the definitive book Googled: The End of the World As We Know It. "Clearly, these are two companies at war with each other."
It's a war Google -- the 21st century equivalent of the still-powerful but increasingly irrelevant Microsoft -- may be destined to lose.
Rory O'Connor's new book Friends, Followers and the Future: How Social Media are Changing Politics, Threatening Big Brands, and Killing Traditional Media, will be published this month by City Lights.