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Google vs. Facebook: The New Media Showdown

Google co-founder Larry Page is paranoid—and justifiably so, as his company's losing ground in the social media sphere to Facebook despite its best attempts.
 
 
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 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 cofounder 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?

 
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