His talk about how the Google strayed from their roots to battle Facebook left me thinking about how disruption can cause a dominant player to completely change track and lose sight of their vision. More on that below.
I found the following bit interesting:
I couldn’t even get my own teenage daughter to look at Google+ twice, “social isn’t a product,” she told me after I gave her a demo, “social is people and the people are on Facebook.” Google was the rich kid who, after having discovered he wasn’t invited to the party, built his own party in retaliation. The fact that no one came to Google’s party became the elephant in the room.
Google went beyond building their own party, they tried to change their entire purpose in life.
Consider the following:
- What was Google’s original mandate? To sort & organize the web.
- What is their core technology? Matching ads based on the website content and user’s search/browsing history.
- What’s the point of all the innovative, yet diverse, Google products? They keep users on Google-owned properties, reducing the cost of the displayed ads
- What is Google’s supply chain? The websites that its spiders index and sort through.
- What is Facebook’s mandate? To understand the people who use the web.
- What is their core technology? Matching targeted ads with much higher accuracy. For example, a concert organizer for a Mos Def concert in Japan can create ads that reach out to rap fans (incl. specific rap fans who may like Mos Def based on their musical taste) living in Japan.
- What is Facebook’s supply chain? The users’ interaction on the website.
Google is scared for the following reasons:
- Facebook ad’s are more valuable because they can be targeted to a very specific individual and they can incorporate rich ad campaigns. Google cannot match that level of accuracy nor the richness with their dominant textual-based ads.
- Facebook ad’s have a significantly lower cost as they don’t have to pay a 3rd party website for ad placement as Google would with AdSense.
- Facebook has greater user engagement. People spend more time on Facebook, so the ad impressions increase, resulting in greater revenue. Google, on the other hand, is used as a tool to find what they are looking for.
Part 2 continues the conversation.