Why Facebook Is a Threat to Google’s Earnings


If you were an advertiser, who would you rather place your ads with?

On the one hand, you have a company that will attempt to gear ads to things like the search history of its users. On the other hand, you have a company that knows where its users went to college, where they work, who they are friends with, what they're reading and sharing, and their favorite bands, books, foods, and colors.

Advertisers want to target their ads to the people most likely to be receptive to them, and information is the key to targeting. The more information available, the better the targeting.

This is why worries Google so much. It's why Google is trying so hard to get a firm foothold in social networking through its Google+ — if Google cannot compete with Facebook when it comes to information about its users, it will lose ad-market share.

Google's big challenge, however, is that while people seem very comfortable with letting Facebook know everything about them, there seems to be some resistance to letting Google learn more.

In general, people are willing to sacrifice privacy for a feeling of connectedness. But Google has yet to prove that it provides that feeling of connectedness that earns it the right to learn more about its users. It's still playing catch up with Facebook in this regard.

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