Facebook And Google Compete By Flipping Each Other's Models Inside Out

from the it's-about-time dept

For years, we've been disappointed with the fact that none of the big web companies seemed to recognize the importance of establishing themselves as core to the web platform. In fact, Google has quite often done things to move away from being such a platform -- which seemed like a dangerous strategic move leaving things open to other providers. Early on, it had seemed so obvious that Google should set itself up as a "web operating system" on which others could build applications -- but the company has been slow to embrace that kind of vision, preferring to remain somewhat closed off. So far, surprisingly, Amazon had seemed like the most eager to embrace enabling the web platform with its S3 and EC2 services. However, in the last few months, Facebook has received much of the attention for its platform play. To be honest, we initially had high hopes for Facebook's platform play, but despite the hype and attention it has generated, it's actually gone in the wrong direction. It seems like Facebook's attempt at being the platform is more about bringing apps into Facebook, rather than allowing outside apps to make use of Facebook as a component. In fact, it's a little bit like Google's misguided strategy -- focused less on enabling things outside of its system, and more on bringing things inside.

However, both Google and Facebook are getting ready to launch new offerings that look like they hit directly at the other company -- but which really demonstrate some of the tactics both companies are hoping to use in branching out from their core areas of business to become more of a web platform. And both involve hitting the other provider by doing what it won't do in terms of opening up certain data to outside uses.

First up is Facebook, which is rumored to be launching a major ad network initiative designed to compete with Google's ad platform. The key is using Facebook profile information tied to an ad cookie to make the ads that someone sees as they surf around the net a lot more relevant (or creepy, depending on your point of view). It's this vision that Microsoft is buying into (as the supplier of the ads). This is a clever move. It's something that Google can't do as directly or efficiently, as Facebook in many cases will have a lot more data about the user's specific interests and profile. But, it's also an example of Facebook finally doing something that involves pulling data out of Facebook to do something useful elsewhere.

Then, there's Google. The company is launching a new set of standards designed to make it easier to build apps that run across any willing social network. The company has built up an interesting alliance of networks, including (no surprise) its own Orkut, but also LinkedIn and Salesforce.com. The idea here is that developers can now have their apps easily work with a variety of social networks. Facebook hasn't signed on to the deal, and may resist it for some time -- but if it really starts to get some traction, the company may feel it necessary to join in. In effect, this is Google's way of forcing social networks to open up more and be a part of the larger web platform -- rather than being stuck in their own little silos. If it works well, Google could conceivably then build a similar ad offering on top of multiple networks of information, and it would also serve to protect Google somewhat from the faddish nature of social networks, as it wouldn't matter if one particular network declined as another gained prominence -- as long as they're all using these standards.

Comparing the two strategies is interesting -- as both revolve around doing the sorts of things the other company doesn't want or cannot easily do, yet which will directly impact the other's business. But, both also involve a somewhat tricky cat and mouse game of determining which parts of a business are really open and which are closed, with both seemingly hitting at each other's key weakness within their core offerings. In other words, it's about to get a lot more fun to observe how these strategies play themselves out. As for who wins? Despite thinking that Google should have opened up years ago, I think Google has the stronger position here. On top of simply having a lot more money available, it's strategy is much more about enabling others to do much more online. Facebook's strategy, on the other hand, risks consumer backlash over having private info spread outside of Facebook, and also leaves the company reliant on everyone staying within Facebook just as Google is about to make other social networks potentially more interesting.
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Filed Under: advertising, social networks, web platform
Companies: facebook, google

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  1. Odds posted: Google 7-2 favorite

    I'm putting my money on Google, not on an emotional basis, just on the odds.

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