Since Facebook was launched in 2004, and driven by the fact that it has continued to grow ever since, there has been a lot of rivalry between them and the other dominant sites on the Internet, most of all Google.
Since the launch, there has been a lot of speculation and coverage about a possible take over by Google, but it seems that Facebook were not interested and just used Google’s high bids for a part of the company, to help increase the bids from the other candidates.
In the end, Facebook sold a 1.6% share in the company to Microsoft, to Google’s horror, for a staggering $240 million, meaning that the entire company is alleged to be worth a massive $15 billion.
Before Facebook was introduced, the Internet was a very anonymous service, where people could effectively hide their identities and their personal details and users seemed to like this and did not want to share their personal information over the web.
However, since Facebook was introduced this has all changed, as people using the social networking platform are behaving very differently, now using real names and email addresses, connecting with real friends and sharing real thoughts, ideas and news.
Due to the nature of Google, it remains an anonymous place, meaning that Google cannot access personal details about it’s users unless they are signed in and can only use information such as search history and browsing habits to find out information about them.
At present the Facebook-Google battle seems to be stronger than ever. In the past the Internet has been dominated by Google’s arduous and accomplished algorithm, but the CEO of Facebook wants to change this and introduce the concept of a “social graph” and make the web a more sociable and personal platform.
Due to it’s recent behaviour it would seem that Google do feel threatened by this new technology, which seems ridiculous as Google are a highly profitable organisation and Facebook are yet to make a dollar in actual profit.
At present, Google is an extremely successful business with Adwords generating around 90% of it’s net revenue, which was $15.8 billion last year, but they are aiming for bigger and better profits. It would appear that Google had intended to reach these new heights with the help of Facebook, but now looks like they will be competing for the top spot.
Due to the nature of Facebook it’s data remains hidden from the Google spiders, meaning that it is not only holding back information and damaging Google in that way, but it is also competing directly with the search engine giant, as it is now actively promoting Microsoft’s new search platform Bing, which is currently doing well in the search traffic battle against Google.
There are also plans in the pipeline for Facebook to create it’s own search app to allow members to search for particular topics and see what other members have to say on the subject.
Google and Facebook are also completing for advertisers to use their platforms and they both have their advantages from an advertisers point of view. For example Google Adwords is a great way to show ads to people that are actively searching for a product / service, but Facebook allows advertisers to show an advert to a targeted demographic and create demand.
Due to the levels of personal information Facebook has about its users it has the ability to only show the ad to the people that it is targeted at and hopefully create a need for the product and create brand awareness with the target audience. Whereas Google does not have this level of information about their users and can only show the ads to the people that are actively searching for that product / service.
However Facebook are yet to get the personal ad balance right, between “targeted and useful” and “creepy and stalkerish”, as the product ‘Beacon’ proved, and this is something they are going to have to get right in order to use the vast amounts of information they have, to monetise the company.
In December of last year Google showed that the battle is definitely on and that they are not going down without a fight, as they launched their feature ‘Friend Connect’ on the same day that Facebook launched their product ‘Connect’.
Also in March it was reported that both companies were bidding for the increasingly popular micro-blogging service, Twitter. Twitter is now actually growing at a faster rate than Facebook and would give Google that all important personal data that Facebook has.
Both companies have both shown evidence of trying to become more like Twitter in order to compete with it and each other, such as the new ‘What’s on your mind?’ app found on Facebook, which is very similar to Twitter’s ‘What are you doing?’ concept.
Similarly Google recently launched it’s feature called ‘Wave’, a web app that encourages Facebook and Twitter like sharing. Also in April Google announced the concept of it’s ‘detailed profiles’, in an attempt to encourage users to submit the personal information that Twitter and Facebook have in abundance.
Previously, Google has assured users that it would not use their personal information to target ads and insisted that they would only use search history. However in March, it introduced the concept of behavioural targeting, which tracked users browsing behaviour to deliver more customised ads. This is a subject that needs to be handled with care, after the outrage Facebook users expressed after they introduced their ‘Beacon’ feature.
Google knows more than most about the huge challenge that Facebook faces: turning their enormous user database into a profitable business. Google itself invested 5 years and $900 million into trying to monetize MySpace. This is a failure that taught them that hard about the difficulties in monetising social media.
We’ll have to wait and see if Facebook can pull it off and beat Google in the advertising race.
