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. identicon
    Adam, 31 Oct 2007 @ 12:29pm

    facebook apps -- no value ?

    i have not yet seen an app that really adds any value to facebook that it did not have before

    facebook was MUCH better and more effective/efficient when it was simple

    it is in fact its apps, imo, that will be the downfall of facebook...it has driven many of us to loathe using a once enjoyable website - making it as spam-filled as MySpace

    i think facebook is embracing ads because it knows it cannot survive as a social network forever...zuckerberg should have dumped it when he had the chance

    reply to this | link to this | view in thread ]

  2. identicon
    Anonymous Coward, 31 Oct 2007 @ 12:39pm

    Been done before?

    Is it just me, or is Facebook's idea just a tracking cookie? Which most anti-spyware/virus programs end up removing anyway.

    I don't see how implementing a time-proven privacy concern will help them.

    reply to this | link to this | view in thread ]

  3. identicon
    Rishi, 31 Oct 2007 @ 12:54pm

    Facebook better be careful, anyone who wants to take on google is in for a rough demise.

    reply to this | link to this | view in thread ]

  4. identicon
    niftyswell, 31 Oct 2007 @ 1:06pm

    facebook is going in the right direction

    I would give up my google accounts and use facebook as my primary page for my homepage, checking email, doing documents, and checking up on my friends. It is so much easier and intuitive than google and as long as it stays free and open I will continue to use it. It still has some minor bugs...but it is getting better every time I open it. I think this model is the future especially as it ramps up to being a 'real time' application with IM, video, and other utilities. I imagine someday opening the page and seeing streaming video of my friends and family who are online exchanging conversation, files, vids, pics, music, and stories.

    reply to this | link to this | view in thread ]

  5. identicon
    Danno, 31 Oct 2007 @ 1:44pm

    It seems almost invariable that Facebook is going to have to open the walled Garden in light of this.

    Not that doing so would necessarily hurt them, they're still very large and opening up would mean that their users wouldn't feel compelled to leave just to get access to the other guys' stuff.

    reply to this | link to this | view in thread ]

  6. icon
    Nick Dynice (profile), 31 Oct 2007 @ 5:12pm

    And all of this innovation without patents! This is a great example of companies trying to out innovate each other to compete for customers while not doing it the old, dumb way: more bloated features, more money spent, more patents filed.

    reply to this | link to this | view in thread ]

  7. icon
    Mike (profile), 31 Oct 2007 @ 6:34pm

    Re: Been done before?

    Is it just me, or is Facebook's idea just a tracking cookie? Which most anti-spyware/virus programs end up removing anyway.

    It's a bit more than a standard tracking cookie, because it will also pull in data from your Facebook profile... but yes, it probably won't take long for it to get removed by anti spyware offerings.

    reply to this | link to this | view in thread ]

  8. Odds posted: Google 7-2 favorite

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

    reply to this | link to this | view in thread ]

  9. identicon
    Tom, 1 Nov 2007 @ 1:52am

    They own your thoughts. (Lengthy)

    What creeps me out is the sheer magnitude of information Facebook has on people. Besides the info they require, they can mine all types of keywords from blog posts, bulletins, messages, etc., essentially creating a pretty accurate persona of any (active) user. Yeah, it is just for advertising purposes. But how many have seen the the ToS where it states that Facebook owns everything you post so long as you maintain an account? Facebook could essentially produce a "Book of Poetry" using any poems posted on their site, make millions off it, plop your image next to said poetry, and give you squat for it. (This is extreme, but completely legal when you click Agree).

    "When you post User Content to the Site, you authorize and direct us to make such copies thereof as we deem necessary in order to facilitate the posting and storage of the User Content on the Site. By posting User Content to any part of the Site, you automatically grant, and you represent and warrant that you have the right to grant, to the Company an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose on or in connection with the Site or the promotion thereof, to prepare derivative works of, or incorporate into other works, such User Content, and to grant and authorize sublicenses of the foregoing. You may remove your User Content from the Site at any time. If you choose to remove your User Content, the license granted above will automatically expire, however you acknowledge that the Company may retain archived copies of your User Content."

    reply to this | link to this | view in thread ]

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