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Google's Uphill Battle Against Facebook

Wednesday, 28 Jul 2010 | 3:33 PM ET
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Google

Is Google readying another social networking push?

If so, it’s going to have a hard time unseating Facebook.

Dennis Knealeand I were just on air today with David Garrity of GVA Research, and the subject of Google’s prospects came up.

Garrity made the point that Google has more users than Facebook has members, and cited that as a reason why Facebook should be nervous. (Watch the segment here)

Here’s the problem with that: Converting search users into social networking members is tough, and we’ve already seen Google fail at it several times:

Orkut, the company’s major social networking effort, was modeled after Friendster, and fell flat. It failed to innovate quickly while Facebook came up with big ideas like the Wall and Facebook Platform. And it became something of a cult hit in far-flung locales like Brazil and India but never got traction here at home. That’s a far cry from the success Google has had in search.

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Google wants to face off against Facebook in the social networking space. David Garrity, of GVA Research, and the CNBC news team discuss this and other tech news.

Then came OpenSocial, which was supposed to be Google’s answer to Facebook’s app platform. Facebook founder Mark Zuckerberg had the brilliant insight that by allowing third parties to build games and other apps on top of his network, instead of blocking them as MySpace had done, he could turbocharge his growth. As Facebook gained momentum, Google launched a rival platform, OpenSocial, which would stretch across MySpace, Hi5, Ning, and a bunch of other social sites that have faded into obscurity.

Despite Google’s unquestioned software chops and huge user base, it failed.

Don’t forget about Wave and Buzz, two social utilities that were supposed to reinvent e-mail and disrupt Twitter.

What happened?

Wave is still chugging along, but poses no threat to e-mail – it’s more of a real-time tool for project managers than anything ordinary consumers would care about.

Google Buzz
Google Buzz

And Buzz?

When Google tried to give Buzz a boost at launch by automatically signing up Gmail users and sucking their most frequent Gmail contacts into their Buzz networks, it spurred a privacy uproar.

Turns out that we e-mail all kinds of people – ex spouses, business partners – who we don’t want tracking our social lives.

Another reason it will be hard for Google to sink Facebook’s social battleship: Facebook is absolutely huge at 500 million members. People spend more time there than on any site on the web, and log more pageviews. Google would be starting from practically zero with a new social effort, and as Microsoft or Yahoo could testify, it’s really hard to take share from a dominant online player once it reaches critical mass.

Does this mean Google should give up? No. Social is too important. Facebook probably represents the biggest threat to Google’s model since Google tends to make money when the public Internet grows, and Facebook is largely private. Because much of the data in Facebook’s network isn’t indexable by Google, every additional minute people spend on Facebook is a minute Google captures less information about their search traffic and browsing patterns – and has less potential to make money.

So Google needs to keep making social plays. But if history is any guide, Google will have to do a lot more than build its own version of Facebook – and it won’t be able to count on users of search, Gmail and other services to automatically make the switch.

Questions? Comments? TechCheck@cnbc.com

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