Google's Social Hype
David is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Social networks, namely Facebook, are the hottest sites on the web and with good reason. Facebook is set to go public this month at a valuation flirting with one hundred billion dollars. Google (NASDAQ: GOOG) sees the competition Facebook poses and last year they launched Google+. Not only did Google launch Google+ but they have since been pushing it down Google users throats; this recent Google obsession with ‘social’ (starting with the failed Google Buzz & Orkut) has not been a runaway success.
This is not to say that Google shouldn’t be worried about competitors like Facebook. Facebook has over eight hundred million active users and Google is not getting a slice of the Facebook pie, but Microsoft (NASDAQ: MSFT) is. In 2007 Microsoft invested two hundred and forty million dollars into Facebook (for a 1.5% stake in Facebook, back when the company was valued at a paltry fifteen billion). That's not all, for a time Microsoft provided the ads on Facebook, searches on Facebook are powered by Bing and Microsoft recently sold Facebook hundreds of web related patents. Users of Facebook spend more time on Facebook than users of Google do and they willingly enter far more personal information, what they like, who they like, where they are, what they are doing, what they want, if they’re an organ donor, the list goes on and on. This allows Facebook to target ads very well to its users. All of this is what spurred Google to launch Google+.
Google splashed a promotion for Google+ on their homepage and every new Google account that gets created also automatically creates a Google+ account even if you were intending to only use Gmail or Youtube. Yet Google+ only has one hundred and seventy million users and from my personal experience Google+ is a ghost town compared to Facebook.
Google is not a social company, they are an engineering one, built on a search and advertising algorithm and they have at times bragged that they employee more Phd’s than any other single company.
Google+ launched with some good features, Circles, Hangouts, and an excellent Photo platform. However those are the only good things I have to say about Google+. Even after a major site revision that has made Google+ look more like Facebook, Google+ remains less engaging and social than Facebook, heck I find Pinterest more engaging. Maybe I am alone but I think Google has now repeatedly failed to show they can build a social service, with Orkut and then Buzz and now Google+. Huge promotion across their other services and automatically adding a Google+ account are the only reasons I believe Google+ has achieved one hundred and seventy million users.
As Google continues to push Google+ down the throats of its users they will only alienate their users and hurt their corporate image. This strategy also creates artificial growth for Google+ as every new Google account created includes a Google+ account. Google is now attempting to brute force social success as their organic social services have failed twice. Google CEO Larry Paige took the social hype to new heights when he announced that in 2011, 25% of all Google employees’ bonuses will be based on the companies success or failure in social.
Google needs to rethink their social strategy and realize they do not need a social network to stay relevant and they definitely do not need to push Google+ like they are. Other moves that Google has taken such as combining their privacy policy for all of their products will allow Google to acquire a lot of the information that they can use to target ads as they monitor Google users across all Google services. Google should focus on local ad targeting using their mobile services such as Latitude combined with recent acquisitions like Zagat which could provide quality recommendations to local businesses through numerous Google services. Social will no doubt play a role in Google’s future but it is not the end all, be all.
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