Why Google+ is a Threat to Facebook
Lee is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
I think many investors are missing the potential for Google (NASDAQ: GOOG) to hit a home run with its social network Google Plus (also written Google+ or just G+) in the future. The problem in understanding usually stems from people expecting it to be a Facebook (NASDAQ: FB) replica and a failure to appreciate its integrated role within the range of Google platforms. It’s time to look deeper into the subject because there is an awful lot of potential in Google+.
Facebook vs. Google+
Although they are different in many ways, they do compete with each other for internet hours. Facebook’s modus operandi should be well known by now. It is a walled garden of content which is generating huge amounts of data that can be used by marketers in terms of social profiling. Zuckerberg and company make money out of you chatting with your friends. Facebook's big 'value add' is that it is tapping into the pre-existing relationships that people have or form while they are active on the site.
Whilst this is fine it does tend to encourage ‘lean back’ type of content. The endless updates on who is where, pictures of babies at every incremental stage of their development, the ‘hilarious’ video clips, and the never ending stream of self validating remarks that users send to each other about their new hairstyles, clothing or whatever. In other words, it tends to be entertainment first and the content within it is wholly different to that gleaned from say, a newspaper.
Google+ is different. Connections and circles tend to be based on subject matter rather than purely on interpersonal relationships. This means you could find yourself discussing interested subjects with a far more diverse set of people. The content is much more ‘lean forward’ and engaging on Google+. As such it may turn out to be a more focused stream of data then on Facebook. Circles organized by particular interest are much more likely to discuss matters in more depth. In addition its Google hangout feature plus messaging system threatens to take popularity from Microsoft's (NASDAQ: MSFT) Skype.To go back to the newspaper analogy, if you set your circles up correctly you could de-facto use the site as a newspaper.
Why Advertisers Will Like Google+
By advertisers I don’t just mean potential advertisers on the site itself (it doesn’t currently take ads) but rather how it benefits marketing attempts via its seamless integration with the rest of Google’s platforms. With a universal log in, users quickly notice that Google+ is integrated into things like search and YouTube. Moreover, the content is not a walled garden so it is very easy to interact and join with via broad based search.
This has obvious benefits to anyone generating revenues using Google Adsense on their websites. It also has huge benefits to Google in terms of generating data for analytics that will help advertisers with their marketing attempts. In a sense, Google+ profiles are a bit like your personal online presence and since it is integrated with search it is related to what you are actively looking for online. This holds huge benefits because it interacts with the many other ways that you are using the web, not just for your social networking usage.
Don’t Forget Mobile
The market seems to be finally waking up to the fact that Facebook’s doesn’t have a particularly appealing or coherent strategy towards mobile. The idea of putting ads in the middle of a Facebook session on the mobile app can’t be particularly appealing. However, Google+ has an edge here. Since it is intended to as the ‘social spine’ to Google’s activities it does not necessarily need to run ads.
Moreover Google has the majority share on video usage on mobile via YouTube and I doubt that Apple’s (NASDAQ: AAPL) decision to not preload YouTube or Google Maps on future iPhones is going to change that. Apple is risking unpopularity with these moves because I happen to think those two apps are extremely popular. In fact they are the two that I use on my android phone the most. In addition to YouTube, Google has an overwhelmingly dominant position in mobile search.
Putting these facts together means that Google already has market leading revenue generating platforms on mobile and Google+ is intended to support them. Throw in Google’s Android operating system and it’s clear that Google does have a very well defined strategy for mobile. Can the same be said for Facebook?
The Bottom Line
In conclusion, it’s a mistake to directly compare Google+ with Facebook. The former is part of an overall strategic development with a clear plan. Google is a highly successful company that has demonstrated it can generate meaningful revenues from advertising across many platforms and I think Google+ is slowly becoming an integral part of this development.
It is about much more than looking at Google+ in isolation. I think Google is slowly getting things right with Google+ and mobile and it is a much more attractive company than Facebook.
SaintGermain has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Facebook, and Google. Motley Fool newsletter services recommend Apple, Facebook, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.