Thursday, July 8, 2010

What if Facebook is the new Google?

Facebook already known by over 500 Million people as a social network is going to be much more than a social network. I have to admit I saw facebook and other social networks as hype and not more. But for hype it is now long on the market and too big. It surpassed all other social networks and is number 2 webpage.

Facebook is trying to have more than a billion members and it is already half way there (500 Million today, 200Million only 15 months ago). IT is so big and powerful that it is threat to google. More and more people are searching in facebook to find important information. They almost trust facebook more than google results. Google’s main business is search and advertising. If people don’t search ad google, google can’t sell advertisement. Of course we are far away from this scenario, but honestly, google did miss the social train. Google tried with Orkut but lost against facebook. Then goggle started Buzz an open social network, which mixes, twitter, facebook and gmail but so far not so much success.

The rapid rise of Facebook has no company more worried than Google, which sees the social networking giant as a threat on multiple fronts. Much of the activity on Facebook is invisible to Google’s search engine, which makes it less useful over time. What’s more, the billions of links posted by users on Facebook have turned the social network into an important driver of users to sites across the Web. That has been Google’s role in the past.

And then there is the advertising part, which Facebook poses a challenge as well.

Facebook does know more about their subscribers than google ever could know about the people who are searching with google. There are 500 million subscribers and facebook knows almost everything about them. Facebook is able to place the best-targeted advertisement.

Luckywise there is not yet any IAB ads running on facebook, besides on application pages. But a friend of mine (who has good connection to facebook), told me that they hired over 200 sales people and working on an ad program. Advertising will be a mix of google and yahoo system.

Internet Users are already spending 3 times more on facebook than on google. This is a big number. And each minute we spend more on facebook, is less for google. Even if we combine google and youtube hour spend, it is still less than on facebook.

It should be not hard for facebook to sell successful advertisment.

Oh yes and there is the money

Google is of course much bigger (financial) than facebook, but Mark Zuckerberg’s company does enough revenue to grow rapidly and to offer new products.

Industry insiders are saying that Facebook is benefiting from a cycle where success breeds more success. The bigger you are the bigger you get – Facebook could outrun other established social networks outside of the US, because of the success here in the States.

Through this success the growing revenue, estimated at $1 billion annually, allows the company to invest in improving its product and keep competitors at bay.

With Facebook’s social networking lead growing, it is not clear whether Google, or any other company, will succeed in derailing its march forward.

Says Danny Sullivan, the editor of Search Engine Land, an industry blog, “Google can’t even get to the first base of social networks, which is people interacting with each other, much less to second or third base, which is people interacting with each other through games and applications.”

Google is concentrating maybe too much on Apple.

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