Should Google Be Afraid Of Facebook?

In the latest issue of Fortune magazine, Josh Quittner wrote a page length article entitled Look Who's Worried Now (online here), in which he argues that Google is increasingly worried about Facebook. He says that Facebook is taking Google's talent, taking its traffic, and is using its platform to power a new Internet micro-economy.

During the Web 2.0 Summit last week, Jeff Huber, Google's Vice President of Engineering, proclaimed from the stage that the platform wars are over and the web has won. Clearly, Google does not want to have to deal separately with a Facebook silo, since its already has an algorithm for indexing entire web (though Google has recently released their own Facebook applications). The real question is this: Can Facebook really hurt Google? And if the answer is yes, then how and when?

Especially given today's news that Google lost out to Microsoft for the rights to acquire a stake in Facebook, the question of whether Google should be worried is a pertinent one.

Google's Social Ambitions

Google may not be afraid of Facebook, but it sees value in social applications. Google Bookmarks, Google Notebook, Orkut, and recently Social Maps are all among top priorities for the company. Google co-founder Sergey Brin said today that Google has advertising relationships with approximately 20 social networks.

Why? Two important reasons. First, there is hardly anyone left on the web who does not recognize the viral, network-driven power of social applications. Second, Google's strategy across the board is to get into as many hot areas as it can and build free tools to support its core business - advertising.

In truth, Google had a social strategy long before Facebook released its much-hyped platform. And just because Google is focusing on the social web, does not mean that it is a defensive play against Facebook. Surely Google would have liked to have been able to get cozy with Facebook today, but for Google, Facebook's inventory is a drop in the bucket. It is not critical, and as we will argue below, Google is not likely to be terribly worried about Facebook.

Google and Facebook Operate In Different Areas

Google and Facebook are fundamentally in two different types of businesses. Yes, both of them monetize mainly via advertising, but Google is a web wide technology and Facebook is a single web site. In a post earlier this year, we argued that Google is the utlimate money making machine because of its distributed nature. For Facebook to get our attention, we have to explicitely sign in, whereas Google is everywhere.

To argue that with time people will spend more time on Facebook than searching the web is absurd. Facebook is leisure, while searching the web is leisure, and more often, work. Even though Facebook is a platform, it is still built around a vertical. And any vertical is just a subset of the web. Google, on the other hand, has built a mesh that covers the entire web.

Google Still Has Superior Search Technology

Some might argue that Facebook can become the starting point for peolpe to discover the web. At least right now, though, we are quite far from that. Facebook is just a social utility, an entry into the social graph, but not the starting page for discovering the rest of the web. Assuming that Facebook is going to try to go that route (which is unlikely), they would have to build their own search engine or partner with someone.

Meanwhile, Google still has the superior search technology. Its two closest rivals, Yahoo! and Microsoft, are trying very hard to match the search leader, but have not yet had any luck in catching up. The main reasons for Google's massive lead include an early start, a very good algorithm, great infrastructure, and inertia. People are used to Google being their search engine and "googling" has even replaced searching as the verb for finding information online. So until there is a major leap for the better in the search experience at its rivals, Google is not going to be replaced.

Show Me The Money

Facebook has a small handful of options when it comes to monetizing its audience: ads, tax, or products. The second option is out of the question. After touting itself as a great free platform, Facebook can't start charging application developers. The third route, selling products, is iffy at best as a source of real revenue. Facebook is not set up as a store and the platform has no commerce aspect to it. So this leaves advertising.

The only kind of advertising that makes sense for Facebook is contextual, but so far, their efforts have been less than impressive. Most of the ads I've seen invite me to check out lonely college girls and my wife doesn't approve of me doing that. Seriously, what can be successfully advertised on Facebook? Products? Movies? TV shows? There is certainly a range of things that will work, but the question is how to effectively market them?

Some evidence suggests that users of Digg, another social site, are 3 times less likely to click on an ad than Google users. One of the reasons is that when people come to Google they are looking for specific things. When they search, it doesn't matter to them if the top results are ads as long as they're are relevant. So people click.

On the other hand, when people are on a social networking site like Facebook, they want to socialize, they are not explicitly looking for products or information. Over the last year, I've heard several anectodal stories about AdSense being less effective in terms of lead conversion compared to ads placed on the main Google search results. Once again, the reason is likely to be that people are not looking for specific things when they are at non-search sites.

The bottom line is that until Facebook proves that its audience is monetizable, they are not a threat to Google.

The Market(ing) Games

So if Google has nothing to really worry about, why might it worry? In a word - buzz. Google was the last cool kid on the block, however, it hasn't enjoyed being the "cool" tech company in awhile. Until Facebook came along, though, there weren't any other hot companies to steal Google's wind. Facebook hasn't taken any money yet, but they have taken a little wind out of Google's sails. 2007 will be remembered as the year of Facebook (just like last year was the year of YouTube - which of course by proxy meant Google).

But it is going to be hard for Facebook to turn that wind into dollars. Google is still at the top of its game, with a stock that it reaching all time highs every day on Wall Street. It plays the simplicity game very well, it does a good job marketing its products, and it is sticking with the free software concept as its bait. Facebook succeeded in generating a lot of buzz and hype around itself this year, but outmarketing Google in the long term is going to be tough.

If Facebook does want to go head to head with Google, it will need serious cash. The $240 million influx of dough and $15 billion valuation it received today will help to allow Facebook to try to organize all that wind into a storm. But to do that, in addition to spending marketing dollars it will need to figure out how to become a web wide company and how to effectively monetize its users. Microsoft's experienced display ad sales team (via their aQuantive acquisition) should be able to help Facebook with the latter.

Conclusion

Google is not worried about Facebook, it is worried about its business, its future and its image. There is no evidence to indicate that Facebook is an actual threat. More likely, this is a PR situation for Google. Of course, Google is going to press on with its social strategy, but simply because it makes sense, not out of fear of any other company. As for Facebook, after the initial excitement is over, the company will need to show that it can make money. Time will tell if Facebook is worth all the hype and its fresh massive valuation.

Google应该害怕Facebook吗？

    在最新一期的《财富》杂志上，Josh Quittner写了一整页的文章，名为《看看现在谁在害怕》（通过这里在线阅读），在这篇文章里，他提出Google正在对Facebook的成长日感恐惧。他说Facebook正在抢夺Google的人才、市场，而且Facebook正在用自己的平台形成一个新型的互联网微观经济学。

    在上周的Web2.0峰会上，Google的工程副总裁Jeff Huber宣称，平台之争已经结束了，而Web平台是胜出者。很明显的，由于已经有了索引整个互联网的优秀算法，Google并不想仅仅着眼于Facebook（尽管Google最近发布了他们的第一个Facebook应用）。所以，问题应该是：Facebook真的能够伤害到Google吗？如果可以的话，是什么时候？以何种方式？

    尤其指出的是，今天的新闻报道Google在试图收购Facebook的股份一事上败给了微软公司，所以，Google是否应该焦虑的问题提出的正是时候。

    Google的社交发展雄心
    Google或许确实不怕Facebook，但是它也已经看到了社交类应用的价值所在。Google书签、Google Notebook、Orkut，以及最近的社交地图都属于该公司的高优先级产品。Google的创始人Sergey Brin今天说，Google大概和将近20个社交类网站有广告业务关系。

    为什么？两个很重要的原因，第一，当今的网络，几乎所有的人都使用过基于互联网的社交类应用，这些应用采取的传播方式类似病毒式传播，影响深远。第二，Google的策略就是尽可能的发布免费工具尽可能的为广大用户所使用，从而为其核心业务——广告，提供支持。

    事实上，Google早在Facebook发布其开放的平台之前，Google就已经有了自己的社交应用的策略，正由于Google对社交类应用的关注， 所以，我们不能说在和Facebook的竞争中，Google就处于被动挨打的境地。Facebook目前所拥有的只是沧海一粟而已，毫不夸张的说，正如 下面我们将要阐述到的，Google看起来并不担心Facebook。

    Google和Facebook的领域不同
Google和Facebook从根本上来说，是两种完全不同的业务模式，不错，他们都是主要靠广告赢利，但是Google所关注的是整个互联网，而Facebook仅仅是一个网站而已。今年的早些时候，我们曾经讨论过，Google是终极无敌的赚钱机器，因为它散布整个互联网的特性。所以，当Facebook吸引了我们的注意力之后，我们到Facebook上，登录进入这个网站成为这个网站的一员，然而Google确实无处不在的。

    那种认为人们将会花更多的时间在Facebook上面而减少搜索引擎的使用的说法是非常可笑的，Facebook仅仅是一个消遣的工具，当然，搜索很多时 候也是消遣，但是更多的情况下，搜索是为了工作。尽管Facebook是一个平台，但是它仍然是垂直、封闭的，任何垂直的网络都只是整个互联网的一部分而 已，而我们再来看Google，它建立了一个遍布整个互联网的大网。

    Google仍然拥有最好的搜索技术
    有人或许会说，Facebook会成为人们发现互联网的一个起始点，但是至少到目前为止，Facebook要做到这一点还是遥不可及的。Facebook 仅仅是一个社交类的应用而已，Facebook为你提供了一个社交图，但仅此而已，互联网的其他部分是没有办法通过Facebook来进入的。假设 Facebook想要做到这一点（目前看起来没有这种迹象），他们必须要建立自己的搜索引擎或者和第三方的搜索引擎建立战略同盟关系。

    而与此同时，Google仍然拥有最好的搜索技术，它的两个劲敌，Yahoo和微软，试图在搜索上超越Google这个搜索领域的领导者，但是目前看起来 还不可能发生。Google之所以可以在搜索上大幅度的领先对手，是因为它起步早、有好的的搜索算法、完美的体系架构以及简单（惰性？不知道怎么翻译，可 能是说人们有惰性，所以Google简单）。人们已经习惯于使用Google作为自己的搜索引擎，而“googling”已经取代了 “searching”成为在网络上搜索信息的热门词汇。所以，除非Google的对手在搜索技术有一个大幅度的飞跃，否则Google是不可替代的。

    盈利模式
    Facebook有一些可能赢利的模式：广告、税收和产品。税收这个问题不在我们的讨论之列。而既然Facebook将自己塑造成一个开源、免费平台的角 色，那么它就不能向开发应用的用户收费。第三条路，出售产品，似乎也不太可能成为收入来源。Facebook看起来并不想网上交易的，因此，唯一的收入就 是广告。

    对Facebook来说，唯一合理的广告形式就是上下文相关的广告（广告和当前显示的内容匹配），但是到目前为止，Facebook在语意关联广告上的努 力还是非常不够，我看到的很多广告都是邀请我跟某个寂寞的大学女生去搭讪，不过我的妻子不允许我这么做。产品？电影？电视节目？当然这些看起来都是非常不 错的收入形式，但问题是Facebook需要找到适合它的形式。

    有人证实说， 在另外一个社交网站——Digg网站上，人们点击广告的次数仅仅是Google用户点击广告次数的1/3，其中一个原因就是当人们到Google上的时 候，他们是在找某一个特定的东西，当他们搜索到某一个结果的时候，这个结果是广告还是仅仅是网页结果并不重要，重要的是它正是用户在搜索的，所以他们就会 点击。

    从另外一方面来说，当用户在社交网站比如Facebook上的时候，他们想做的事情就是社交，他们并不希望看到产品或者其他的广告信息。去年，我听说几个 例子，当用户在网站上试图将AdSense广告放到Google搜索框上面的时候，其效果并不好。再说一次就是，如果人们不是在搜索引擎的网站上的时候， 那么他们基本上就不是在找某一样东西，所以他们对广告的兴趣就会大大降低。

    结论就是，Facebook对Google还没办法构成威胁（有一句没翻译好）。

    市场游戏
    所以，如果Google没什么好担心的话，那么为什么它“可能”会担心Facebook呢？一句话：炒作。Google是这个星球上最酷的家伙，不过老实 说，Google已经有一段时间没有很“酷”的技术展现给大家了。直到Facebook出来之后，在此之前，还没有其他的公司能够抢Google的风头。 Facebook到目前为止仍然没有赢利，但是却抢了不少Google的风头，所以2007年将会成为Facebook年而为人们所称道（去年是 Youtube年，当然，也就是Google年，因为Google已经收购了Youtube）。

    Facebook要将抢到的风头转换成钱是一件不容易的事情，Google的股票每天都在华尔街疯狂上涨，而Google是这个游戏的赢家，Google 的产品定位非常好，并且通过免费软件的概念粘滞了大批的用户。Facebook今年成功的制造了舆论，并且围绕它的新闻不断，但是在市场方面， Facebook还远远不及Google。

    如果Facebook确实想和Google一争高下的话，它就会需要大量的现金，今天和微软交易而得到的2.4亿美圆的现金和150亿美圆的市值有可能会 帮助Facebook成功。而如果要达到目的的话，Facebook除了花费巨资之外，还要努力使自己成为一个可以遍布互联网的公司，并且要证明如何从其 大量的用户中赢利。微软公司的经验丰富的网络广告销售团队（通过收购aQuantive）或许在后者上可以帮上Facebook的忙。

    结论
    Google并不担心Facebook，Google应该担心的是它自己的业务和将来的构想。没有证据显示Facebook会对Google是一个真正的 威胁。当然，Google正准备发布它的社交软件策略，但是这是因为Google希望涉足这一块而已，并不是害怕其他的公司。而对Facebook来说， 当最初的兴奋逐渐评析之后，它需要证明自己的赢利能力。时间会告诉我们，Facebook是否值得现在人们给出的市值评估。